Theoretical Basis of Marketing and Marketing in Banking Industry.

industry / Banking in general and for Standard Chartered Bank Vietnam in particular.

According to author Luu Van Nghiem (2008), Marketing for the service industry includes 7 basic elements as shown in the following figure:

Price

Product Services

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Distribution Network (Place)

Promotion

7P Service

People

Service processes (Processes)

Customer service

(Provision for customer services)

The research in this thesis was conducted through two main steps: (1) preliminary research using qualitative research methods, and (2) formal research using quantitative research methods.

(1) Qualitative research was conducted through discussion with experts to preliminarily evaluate and adjust the questionnaire for the next stage of quantitative research. This preliminary research was used to evaluate the use of terms in the questionnaire to adjust some terms appropriately before conducting the official quantitative research. Qualitative research was conducted through surveys of experts working at banks such as: Citi Bank, BIDV, ACB, VCB Sumitomo Bank, Chinatrust Bank, ANZ Bank Vietnam, Hong Leong Bank Vietnam, Dai Tin Bank and Standard Chartered Bank Vietnam.

(2) Quantitative research is conducted through survey methods to collect data using questionnaires to quantify relationships. Then the author uses

statistical methods, comparative analysis methods, systematic analysis, synthesis analysis, induction to process the collected data, and this is also the basis for concluding the research problem. The survey subjects in this quantitative research section are (1) small and medium enterprise customers at Standard Chartered Bank Vietnam and other competing banks, and (2) employees working at Standard Chartered Bank Vietnam.

In addition, the author also used secondary data in this thesis research: documents from Standard Chartered Bank Vietnam, HSBC Bank Vietnam, ANZ Bank Vietnam, ACB Bank and VCB Bank.

6. Structure of the thesis:

The thesis consists of 3 chapters as follows:

Chapter 1 : Theoretical basis of Marketing and Marketing in banking industry.

Chapter 2 : Current status of Marketing activities in lending to small and medium enterprises at Standard Chartered Bank Vietnam.

Chapter 3 : Marketing solutions in lending activities for small and medium enterprises at Standard Chartered Bank Vietnam.

Chapter 1: THEORETICAL BASIS OF MARKETING AND MARKETING IN THE BANKING INDUSTRY

1.1. Overview of Marketing and Bank Marketing

1.1.1. Basic concepts of Marketing and Bank Marketing

The term marketing translated into Vietnamese means marketing or market approach. However, the term in Vietnamese does not fully express the meaning, so the use of the original word "marketing" has become relatively popular. Currently, there are many different concepts of marketing depending on the research perspective.

Some concepts about marketing:

According to Peter Drucker : “The aim of marketing is to sell a lot. It is the aim to know and understand the customer thoroughly, as well as the products and services that are suitable for them, including the selling itself.”

According to Philip Kotler : "Marketing is human activity aimed at satisfying needs and desires through exchange processes".

According to the author Luu Van Nghiem and colleagues (2008, page 16): "Marketing is a method of organizing management by the process of adapting the content of system theory to the laws of the economic, social, natural fields... to satisfy the needs and desires of participating members while simultaneously achieving the determined goals in accordance with the development process of objective reality within the scope of the organization's resources".

Through the above concepts of Marketing, business people need to research the market to discover products that meet the latent needs of end consumers while still ensuring stable business and high efficiency as the slogan "sell what the market needs, not what you have".

Emphasizing the importance of always taking the customer as the center and considering it as the driving force of all marketing activities of the business, this is the concept of Marketing. Bringing satisfaction to customers is the key to success.

In essence, banks are just like other businesses on the planet.

market, banking activities also need capital, buying and selling, and profit,

…but the main activities of banks are currency trading and providing banking services.

Therefore, “Bank Marketing” is a process in which the bank directs all efforts to actively satisfy the needs and desires of customers, thereby satisfying the needs and desires of the bank”.

Marketing is a business philosophy, taking the idea of ​​satisfying customers' needs and desires as the motto for a business effort. Bank marketing does not consider profit as the top and only goal, but considers profit as the ultimate goal and a measure of each bank's marketing level.

1.1.2. The role and characteristics of bank marketing

1.1.2.1 The role of bank marketing

Marketing is involved in solving the basic economic problems of banking business.

Banking activities are closely linked to the development of the economy and become an important part of the economic operating mechanism of each country. Like businesses, banks must also choose and solve the basic economic problems of business activities with the effective support of Marketing.

Firstly , it is necessary to determine the type of products and services that the bank needs to provide to the market. The Marketing department will help the bank solve this problem well through activities such as collecting market information, researching consumer behavior, customers' choice of banks, etc. The results of Marketing will help the bank decide on the method, competitiveness and position of each bank in the market.

Second , well organize the process of providing products and services. The process of providing banking products and services involves the simultaneous participation of three factors: technical and technological facilities, direct staff and customers. The bank's Marketing Department will have many measures to closely combine these factors together, contributing to improving the quality of products and services, creating the reputation and image of the bank.

Third , harmoniously resolve the beneficial relationships between customers, employees and the bank's board of directors. The Marketing Department helps the bank's board of directors resolve the above relationships well through the construction and operation of interest, fee policies, etc. suitable for each type of customer, encouraging employees to invent and innovate, improve operations and business procedures to provide customers with many conveniences in using banking products and services.

Solving the above problems well is not only a strong driving force for banking activities, but also becomes a tool to maintain and develop the relationship between banks and customers.

Marketing becomes the bridge connecting bank operations with the market.

The market is both the service object and the operating environment of the bank. The activities of the bank and the market have a direct relationship and influence each other. Therefore, understanding the market demand to closely link the bank's activities with the market will make the bank's activities highly effective.

This will be done well through the Marketing bridge. Because Marketing helps the bank's board of directors to recognize market factors, customer needs, products and services and their fluctuations. Thanks to Marketing, the bank's board of directors can coordinate and orient the activities of all departments and all bank employees to increasingly better meet customer needs.

Marketing contributes to creating a competitive position for banks.

One of the important tasks of Bank Marketing is to create a competitive position in the market. The process of creating a competitive position of the bank is closely related to creating products and services in the target market. Specifically, Bank Marketing needs to:

First , create uniqueness of products and services. Uniqueness must bring the advantage of difference in reality or in the perception of customers.

Second , clarify the importance of differentiation to customers. Product differentiation alone is not enough to create a competitive advantage for the bank.

The important thing is that the difference must be important to customers, have real value to them, and be genuinely valued by them.

Third , create the ability to maintain the bank's differentiation advantage. The differentiation must be maintained by the bank, and at the same time, there must be a system of measures to prevent copying by competitors.

By identifying and maintaining the advantage of differentiation, Marketing helps banks develop and increasingly enhance their competitive position in the market.

1.1.2.2 Characteristics of Bank Marketing

Bank marketing is a type of financial services marketing.

According to Philip Kotler (2005), service is an activity or benefit provided for exchange, which is mainly intangible and does not result in the transfer of ownership. Therefore, studying the characteristics of services will be the basis for organizing well the banking marketing process.

The intangibility of banking products and services has led to customers being unable to see or hear them before they buy them. To reduce uncertainty when using banking products and services, customers are forced to look for signs that demonstrate the quality of the product and service such as transaction locations, workforce, facilities, level of technology equipment, service prices, etc.

The inseparability of banking products and services is reflected in the process of providing banking products. In reality, the process of providing banking products and services often takes place simultaneously with the consumption process. This requires banks to have a system and a method of fast service with many counters and transaction locations.

Bank marketing is a type of inbound marketing.

In fact, compared to marketing in other fields, banking marketing is much more complicated due to the diversity and sensitivity of banking activities, especially the process of providing banking products and services with the simultaneous participation of facilities, customers and bank employees. If a bank cannot retain good employees, does not encourage and motivate them as well as create conditions for them to contribute

For itself, the bank can hardly survive in the long term. Therefore, internal marketing is carried out in the direction of investing in developing the bank's human resources, influencing the beliefs, attitudes and behaviors of employees through attractive salary and benefits policies, reasonable job arrangements, encouraging them to develop their abilities,... (Trinh Quoc Trung et al., 2009).

Bank marketing is a type of relationship marketing.

According to Trinh Quoc Trung et al. (2009), Relationship Marketing includes activities to attract, maintain and enhance the relationship between customers and service providers. Accordingly, it requires the marketing department to focus all resources on perfecting the exchange relationship between customers and banks, especially maintaining current customers, and at the same time having many measures to attract future customers through creating value for customers. The greatest result of relationship marketing is to ensure that the bank's operations are built on the basis of good business relationships. That is understanding, trust, mutual dependence and mutual support for sustainable development.

1.2. Basic characteristics in banking business

1.2.1 Concept of commercial banking business

“Commercial bank” is a type of bank that transacts directly with companies, enterprises, economic organizations and individuals by receiving deposits and savings, then using that capital to lend, discount, provide means of payment and provide banking services to the above subjects.

According to Article 4 of Law No. 47/2010/QH12 on Vietnamese Credit Institutions, it is affirmed that: “A bank is a type of credit institution that is allowed to carry out all banking activities and other related business activities”.

It can be said that commercial banks are the most important intermediary financial institutions in the market economy. Thanks to this system of intermediary financial institutions, idle money sources scattered in society will be mobilized, concentrated, and at the same time, that capital will be used to provide credit to economic organizations and individuals to develop the socio-economy.

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1.2.2 Nature of commercial banks

Commercial banks are a type of enterprise and an economic unit, because commercial banks operate in an economic sector, have an organizational structure like an enterprise, are equal in economic relations with other enterprises, must be economically autonomous and must have the obligation to pay taxes to the state like other economic units.

The activities of commercial banks are business activities. To conduct business, commercial banks must have capital and be financially independent; especially, business activities must achieve the ultimate financial goal of profit, and the business activities of commercial banks are no exception to that trend.

The business activities of commercial banks are monetary and banking services. This is a "special" field because first of all, it is directly related to all sectors, related to all aspects of economic and social life, and on the other hand, the monetary and banking sector is a "sensitive" field, it requires caution and dexterity in managing banking activities to avoid damage to society. In short, commercial banks are a type of intermediary financial institution operating in the monetary and banking services business, contributing to creating and supplying capital for the economy, creating conditions and promoting the development of the socio-economy.

1.2.3 Main business operations of commercial banks

Capital source business is the business to create the operating capital of commercial banks. Capital sources of commercial banks include the following types of capital sources: Owner's capital, mobilized capital, borrowed capital, received capital and other capital.

Credit and investment operations: The most basic task of any commercial bank is to transform mobilized monetary capital to meet the needs of the socio-economy in different forms - that is credit and investment operations.

Banking services business: Banking services business is considered an intermediary business, it does not directly affect capital sources and does not directly affect credit and investment business. Banking services business does not