JOURNAL

of
INTERNATIONAL MARKETING
and MARKETING RESEARCH

EUROPEAN MARKETING ASSOCIATION Vol. 21 No. 3 October 1996

CONTENTS
COMMISSION INTERNATIONALE DE MARKETING
Marketing in Islamic Countries:
Iran's Case Study
by Ali Sanaie & B. Ranjbarian ........................ 1 15
Unveiling the Marketing Scene i n Saudi Arabia
From Sellers' to Buyers' Conditions
Dr. L. C. Leonidou ................................. 123
Marketing Research i n Vietnam
by Tran Dang V u & Dr. M . Speece ..................... 145
Journal of International Selling & Sales Management
Editorial Office:
Contents: Vols 1 & 2 ................................. 122
European College of Marketing & Marketing Research ......... 162
18 St. Peters Steps
Brixham
Foundation Course i n Industrial Marketing Research ............ 164
Devon
England Book Reviews:
The Marketing Planning Workbook ........................ 166
The Export Pocketbook ..... ......................... 166

Index to Volumes 1 - 21 .............................. 167

Published: February, June & October

Annual Subscription: Sfr. 135 (£65) (USS110)
@ Copyright European M a r k e t i n g A s s o c i a t i o n 1996

; ?

JlMMR Vol. 21 No. 3

Electronic copy available at: http://ssrn.com/abstract=2575541

 M A R K E T I N G RESEARCH I N V I E T N A M

Tran Dang V u & Dr. Mark Speece

Abstract
Vietnam has attracted a large amount of foreign investment in recent years,
and even more foreign products are imported. Foreign companies operating i n
this rapidly developing market have a huge need for reliable marketing
information, and the marketing research industry has taken off since 1992.
There are only a few full-service type research suppliers, all foreign, but there
are over 30 suppliers of various specialized services. Many suppliers are local,
with some of their own clients, but also subcontracting with foreign research
suppliers for local fieldwork.
To local companies, marketing research usually means simply calling up
connections and asking them for their opinion, or talking to one's distributors.
They use such information for background knowledge, not for decisions about
marketing. Foreign companies are leading the development of demand for
modern marketing research. They conduct or commission modern marketing
research projects, and they use the results to help them decide how to
structure their marketing activities.
On both the supply and demand side then, the rapid growth of the marketing
research industry is currently being driven by foreign companies. However,
some local companies are learning fast, and certainly all of the local employees
in foreign and joint venture companies have absorbed the concepts of using
and doing modern marketing research. The industry looks set to continue its
rapid growth and broaden its base i n the years immediately ahead.

Introduction
Marketing research is a very pervasive activity i n most economies where free
markets and an active private sector prevail. Although the majority of marketing
research spending is still i n the developed world (North America, Europe and
Japan), it is becoming common even i n developing countries such as the
dynamic Southeast Asia region. In these areas, it is often the multinational
corporations bringing i n international brands who spur the growth of the
marketing research industry. Many local managers i n developing countries
refuse to accept marketing research as a useful management tool (Kindra
1985).
Vietnam is a case in point. Local companies i n this newly reforming socialist
economy are not familiar w i t h competing i n an uncontrolled market, and are
not accustomed to the use of information about the market to gain competitive
edge. They do, of course, gather much information about things such as
product movement and channel operations. However, conspicuously absent

JlMMR Vol. 21 No. 3

Electronic copy available at: http://ssrn.com/abstract=2575541

from traditional market intelligence i n Vietnam is any attempt to get
information from consumers. In the relatively young marketing research
industry in Vietnam, modern marketing research services are used almost
exclusively by foreign-Vietnamese joint ventures, or by the foreign
multinationals directly. Many local companies say they use marketing research.
but close examination reveals that they have somewhat different conceptions
about exactly what marketing research is than do the foreign companies.
I n fact, Vietnam is characterized by almost total lack of any reliable data on
nearly any aspect of doing business. Local companies i n the past simply
followed orders i n implementing the state plan, so they did not care whether
they had information or not. Foreign companies, used to having information
upon which to base decisions, have used marketing research quite a lot to try
to fill the many gaps i n their information. As foreign investment has grown
rapidly i n Vietnam over the past several years, the marketing research industry
has grown also. However, there is still a huge gap between foreign and local
companies i n how marketing research is perceived and used.
Business Environment
In 1989, about the only foreign invested projects were i n tourist services
(especially hotels), plus a few oil and gas projects. Since then, foreign
investment has increased sharply, as foreign companies have been attracted to
annual growth rates of over 8% since 1992. In 1992, 203 projects were
contracted, for a total of US$ 2.66 billion. In 1995, a total of US$ 6.68 billion
was committed for 41 1 projects. Cumulative investment committed by March
1996 stood at US$ 19.3 billion in, nearly 1400 projects. About one-third of this
approved investment is in Hochiminh City, and another 21% is in Hanoi.
Of course. some investment seeks to use Vietnam's low labor costs to
produce for export and is not oriented toward the local market. However, much
investment i n consumer industries is for the local market, and this investment
began to rise rapidly about 1991. In additions, many consumer products
companies simply export to Vietnam, and do not yet manufacture there. Imports
have risen from about US$ 2.34 billion i n 1991 to US$ 7.5 billion i n 1995.
Again, not all imports are consumer products. but the trends follow the overall
patterns. However they enter Vietnam, many foreign brands are selling well as
consumer spending is booming (VET March 1996a; VET April, 1996a. 1996b).
The Consumer Market
Vietnam has a population of about 7 4 million, an average annual per capita
income around only US$ 225, and about 77% of the population lives i n rural
areas. While these statistics may not look promising for consumer products
companies, the consumer market is actually growing rapidly. It is focused on
the cities, i n particular Hochiminh City, and to some extent. Hanoi and several
other regional cities. One estimate places annual per capita incomes in HCMC
at up to US$ 1200. Over half of the population i n HCMC probably makes over
146 JlMMR Vol. 2 1 No. 3
US$ 150 per month when unofficial sources of income are counted, and about
16% may make US$ 300, or annual incomes of over US$ 3600. Perhaps one-
third of the population in cities such as Hanoi or Cantho have monthly incomes
over US$ 150 (VET April 1996a).
Thlr boomlng consumer market of up to 20 million has shown strong
preference for foreign brands, and i t is developing a high degree of quality
consclousners. Companier Fannot compete purely on price and hope to attract
Vietnam's modern urban consumer; rather, they must position their products
based on superior attributes and image. While Hanoi consumers have
somewhat less money than those i n HCMC, some observers believe that many
of them are even more oriented toward conspicuous consumption to show off
that they have high spending power. Many companies also have a long term
strategy of building strong brand images now, even though the market is still
relatively small. They expect the market to become large quickly (Shultz, Ardrey
& Pecotich 1995; VET 1996a).
Infrastructure Support for Marketing Research
lnfrastructure to suport marketing research is rudimentary i n Vietnam. There
are no lists of residents to work from, so random sampling must be done door-
to-door, using some version of geographic sampling. Telephones are rare; the
government development plans hope to reach a telephone density of 3% by the
year 2000. Hochiminh City officials were aiming at 3.77% i n 1995, and want
8.8% by 2000. Although mobile phones will speed up telephone penetration,
they are currently too expensive to make a major impact on overall access to
telephones. Clearly, some common forms of interviewing and sampling are
simply not feaslbie i n Vietnam, even i n the major cities.
Most products move through small traditional retail outlets, and distribution
channels consist of small traditional wholesalers. All of these channel
members move relatively small volumes (Ha 1995; Hoang 1996; Nguyen 1995).
This makes the widespread adoption of modern technology in marketing
channels unlikely. A few scanner systems have been tried, but most observers
estimate that there will not be much use of retail scanners and bar code
technology until at leaat the year 2000. Similarly, computers are beginning to
become common in Vietnam (Nguyen 1995; VT 1995; VBJ April 1996), but they
are not used much yet in retailing or marketing channels. Marketing research
will not find scanners and computer systems to support collection of primary
data.
However, the government and some private companies are currently
investigating use of computer networks, including the internet, to link
secondary data sources and provide better access to Gecondary data. Private
providers keep a low profile, since free-flowing information tends to make the
government uneasy. The government is, howbver, pushing a plan to develop
the IT industry in Vietnam, and some observers expect a nationwide network to
be operational by the end of the century. This would have a major impact on
many marketing research activities.
JlMMR Vol. 21 No. 3 147
Marketing Research Suppliers i n Vietnam
Though there are no definitive figures, veterans i n Vietnam's marketing
research industry estimate that it has been growing at an annual rate of over
40% since 1993. In 1990, there were only five agencies offering marketing
research services, by 1995 there were about thirty. This rapid growth is
expected to remain very strong through the end of this century. Among the
establishments offering marketing research services, only a small number of
foreign agencies currently offer a full range of services. These are referred to
as General Research Agencies (GAS)below. The rest, including some foreign
firms and all local research agencies provide only some types of research
services, and are referred to as Specialized Research Agencies (SAs) below.
These include Government agencies and institutes, universities/colleges,
consulting firms, advertising agencies.
Foreign Research Suppliers
Most of the foreign agencies, both GAS and SAs, followed their international
clients into Vietnam as foreign investment rose during the 1990s. Industry
insiders estimate that about 90% of formal marketing research is conducted by
GAS. There are four main general research agencies who were fairly active by
early 1995: Acorn, Frank Small. MBL and SRG Vietnam. They have been active
since the early 1990s, and it was usually the Hong Kong or Bangkok office
which led movement into Vietnam. Until 1995, fieldwork was usually
conducted in cooperation with a local agency, and the data was sent back to
the foreign office for processing, analysis and reporting.
Formally, foreign research agencies (like advertising agencies) are only
allowed to operate representative offices, but not actually conduct business i n
.Vietnam. There are no joint ventures or wholly owned foreign operations.
However, with a representative office, foreign agencies are, in practice,
beginning to do more of the work in Vietnam, though they still rely on local
cooperation (subcontracting) for fieldwork. SRG Vietnam, MBL and Acorn,
which probably have the biggest shares of the marketing research market, were
granted government approval for representative offices located i n Hochiminh
City in 1995. Frank Small, though it has also been fairly active, has been
somewhat slower to move toward a formal presence.
Foreign companies in the specialized agencies category include advertising
agencies, where specific departments offer advertising research as well as
consumer behavior and attitude studies mainly focused on advertising related
issues. The main agencies include Bates Vietnam, McCann Erickson, Ogilvy &
Mather, FCB, J. Walter Thompson, Leo Brunet, D&YB. As with research
agencies, foreign advertising agencies can only open representative offices (To
1996). Bates Worldwide became the first multinational advertising agency to
open a representative office i n Vietnam, and the Ministry of Commerce quickly
issued three more licenses to Ogilvy & Mather, McCann Erickson and Prakit
FCB.
148 JlMMR Vol. 21 No. 3
Formally, as with research agencies, no advertising agency can conduct
business in Vietnam, but they usually get around this through cooperation with
local agencies, both i n advertising and i n their research operations. Recently,
however, ad agencies have faced considerable restriction on their operations
during the campaign against cultural pollution (FEER June 6, 1996; VET March
1996b), which may have weakened their research competitiveness relative to
foreign GAS. (Marketing research companies are regulated by the Ministry of
I Trade. Advertising agencies fall under the regulation of the Ministry of Culture
and Information, which is usually more conservative.) Finally, a small amount
i of marketing research is conducted by foreign consulting firms.
Local Research Suppliers
There is a wide range of local research suppliers in Vietnam, but most of
them do not provide much primary research. Largely, they provide secondary
data based on statistics from some government department. This can be
valuable background information (keeping in mind the level of reliability of
government statistical data in Vietnam), but it will usually not address specific
issues of interest to a foreign company. Table 1 is not a complete list, but it
does give an idea of the range of local suppliers and include most of the major
suppliers.
As among foreign research suppliers, some local SAs are actually advertising
agencies or consulting firms which also do some marketing research. They do
provide some primary research, mostly on advertising issues. There are also
many local consulting firms which claim to provide research, Usually this
research is actually data on building connections with key people in
government and industry. This is very important for getting things done in
Vietnam, but it is hot really marketing research in the sense that most foreign
companies would use it.
Government agencies and institutes are very important sources of
information i n Vietnam, as are universities and colleges. However, most of
them supply secondary data, but do not conduct much primary research. The
Department of Statistics, College of Marketing and CESAIS are the main
exceptions which often carry out projects to gather primary data. The
Department of Statistics end CESAIS era about the only local suppliers capable
of mounting nationwide consumer surveys. CESAIS and the College of
Marketing can carry out customized local research projects quite well. Local
suppliers face a general perception that the quality of their work is not as good
as that of the foreign suppliers. Often, but not always, this is true. At any rate,
they often compete on price to overcome the (perceived) quality differential.
It is likely that some universities will get mote involved i n primary marketing
research i n the near future, since the business faculty is being rapidly
upgraded. For example, the Asian Institute of Technology i n Bangkok operates a
major program to train Vietnamese business faculty. By 1996, 5 0 had already
JlMMR Vol. 21 No. 3 149
graduated and returned to their universities i n Vietnam. In early 1997, another
25 w i l l graduate. Many of these have focused o n marketing and marketing
research. Currently, the largest concentration of these M B A s w h o get involved
i n marketing research are at CESAIS, which is a business subsidiary of the
HCMC University of Economics.
Research Capabilities
Industry insiders estimate that multinational clients, usually i n consumer
products, accounted for about 95% of total demand for formal marketing
research. Approximately 60% of t h e total expenditure is probably directed to
consumer and market studies. Within the consumer research field, the studies
on fast moving goods are most prominent, followed by advertising and media
surveys. More than half of expenditure is devoted t o customized research
rather than continuous or syndicated. Perhaps 40% of studies are quantitative
i n nature, 55% is qualitative research, and 5% is desk research. These figures,
of course, do not include informal research (or even a small amount of formal
studies) conducted in-house by companies operating i n Vietnam.
Personnel
Officially, foreign GAS have relatively small staffs, due t o regulations on
numbers of employees and compensation. Usually around 4 to 5 people are on
the staff, including 2 to 3 foreigners or overseas Vietnamese. Informally,
several other foreigners and overseas Vietnamese are usually associated w i t h
the offices, though formally they may be attached t o offices i n other countries
of t h e region. These people, official and otherwise, form the core of the
Vietnam offices, and act as project managers, i n charge of data analysis, report
writing and presentation, and management of part-time staff. Supervisors,
quality control and data processing personnel, and interviewers are usually
part-time staff w i t h graduate certificate or lower. Foreign advertising and
consulting firms organize their marketing research division similarly t o the GAS.
I n local SAs, there is also usually one division responsible for marketing
research services. The size of the division varies from 5 to 5 0 full-time
employees. Government agencies and institutes have relatively small divisions
( i n terms of full time employees), responsible for marketing research. A f e w
universities have major operations w i t h up to 5 0 full time employees. I n all of
these local research suppliers, senior officers function as project managers.
They are usually university graduates, sometimes w i t h specialized training
relevant to research operations. In big SAs, supervisors, quality control and
data processing personnel are also full time staff. Many of t h e m also have
university degrees or some other form of certification. There are no foreigners
i n these agencies.
In all types of research, supplier interviewers are usually recruited from high-
schools, universities or free-lance (such as housewives) and are part-time staff.
Depending on the area-coverage, sample size and required time of fieldwork,
150 JlMMR Vol. 21 No. 3
the number of interviewers can mount to 1 0 0 or more. I n some large-scale
fieldwork, a project may have 5 0 interviewers i n Hochiminh City, 3 0 i n Hanoi
and 1 0 each i n several other small cities. The agencies usually keep a pool of
interviewers o n the books w h i c h i s much larger than the number they w i l l
likely need at one time. Some part-time interviewers do not always want t o
work at the time the project Is needed.
I Facilities and Scope of Operations
Foreign GAS w i t h licensed representative offices have relatively good
facilities. These include sufficient office space, computer networks of 6 t o 1 0
workstations, and focus group rooms w i t h one-way mirrors end recording
systems. Specialized hardware and software also help individual GAS
differentiate themselves from each other. Most local SAs have relatively poor
facilities for marketing research. Often marketing research services are
supplementary to their main work. Thus, they do not know techniques well, or
do not want t o invest much. They only have a f e w regular and occasional
clients; in fact, much of their marketing research work is fieldwork
subcontracted from the GAS. A f e w are mastering marketing research
techniques through this association w i t h GAS, and a f e w are beginning to
invest i n better facilities. So far, though, their client base is usually too small
for the investment to be adequately paid back.
Hochiminh City (Saigon) i n the south, w i t h its population of over six million
and its booming economy, is usually considered the top priority by clients, as
well as by agencies operating i n Vietnam. This is where the main offices of
most clients are located, as w e l l as most representative offices of research and
advertising agencies. Hanoi, t h e capital w i t h a population approaching four
million, is considered the key location i n the North. These t w o cities contain the
majority of purchasing power in Vietnam, and usually set the trends for the rest
of the country. Several other cities are considered second priority if nationwide
research is needed. These include Haiphong (north), Danang, Hue, Nhatran
(central) and Cantho, Long-an (south).
The foreign GAS can cover the whole country, but usually only do their o w n
field work i n Hochiminh City. Elsewhere, they subcontract to local agencies. I n
practice, only rarely is a study so wide i n scope that any but the t w o largest
1
I
cities would be included. Aside from the fact that most of the market for most
foreign goods i s concentrated in the t w o main cities, f e w local agencies have
nationwide capabilities. Furthermore, the level of professionalism among local
1 subcontractors declines substantially outside Hochiminh City and Hanoi. The
Department of Statistics, CESAIS end, sometimes, the College of Marketing are
'
about the only local agencies able t o conduct fairly professional fieldwork o n a
nationwide level.
JlMMR Val. 21 No. 3
Use o f Merketing Research
Our overview of h o w marketing research is used currently i n Vietnam comes
from in-depth interviews w i t h 4 0 companies operating i n HoChiMinh City,
which i s the economic powerhouse of Vietnam's rapidly growing economy. O f
these, 2 0 were medium and large size local companies. The other 2 0 were
foreign invested comapnies, consisting of joint ventures, branch or
representative offices, and wholly owned subsidiaries of foreign multinational
corporations. They were chosen from the city directory of business, based on
judgement that they are very active i n the local consumer market. W e
interviewed marketing managers and marketing research managers w h e n
these positions existed. Otherwise, the interviews were w i t h general managers
or similar positions.
The Role of Merketing Research in the Company
The placement of marketing research w i t h i n t h e company is itself one
indication of marketing research's status i n local vs. foreign companies. I n 80%
of the local companies interviewed, marketing research responsibilities fell
under a general business department. Only 20% of local companies had
sufficient specialisation of function to allocate marketing research to a
marketing department. Companies w i t h foreign involvement showed m u c h
more specialisation. Only 40% of them placed marketing research under a
general business department. Another 35% put it under the marketing
department. One quarter of them had their o w n marketing research
departments which handled marketing research duties. However, these
marketing research departments were i n t h e parent multinational corporations,
not i n foreign-Vietnamese joint ventures.
Local managers are often not used to marketing research. M a n y of them do
not consider marketing research a strategic tool for their marketing and
business decisions. Because of this, marketing research i s less likely t o have
consistent direct access to top levels of management than i n companies w i t h
foreign participation. I n local companies, marketing research sometimes
reported directly to the general manager i n 8 0 % of the companies. However, it
81so often reported to lower level company officials i n three-fourths of t h e local
companies. In t h e joint ventures, representative offices, and foreign
subsidiaries, marketing research reported directly to the general manager i n
90% of companies, and only rarely to lower positions.
Commitment of management to the results of marketing research is strikingly
different. Nearly all managers i n companies w i t h foreign participation reported
using results i n their decision-making. Only 40% of local managers said that
they consider marketing research results i n making specific decisions. To most
local managers, marketing research is simply for background information.
Partly, this is because they do not trust t h e information, considering marketing
research results to be biased and unreliable. They do not believe that someone
(a marketing researcher) w h o is not i n the business can possibly know anything
152 JlMMR Vol. 21 No. 3
about it. Also, as noted below, many local managers have perceptions of
marketing research w h i c h ere very different from h o w modern marketing
research i s actually practiced.
Most Common Merketing Reseerch Methods
Among survey methods, three-fourths of each local and foreign participation
companies said that they use door-to-door interviews. 60% of local respondents
said they use telephone interviews, and 40% reported using mail surveys.
Foreign participation companies trust these methods much less; only 35% use
telephone interviewing, and only 15% use mail. They do not trust t h e ability of
these t w o methods t o get reliable data very much, because of t h e infrastructure
deficiencies noted above. O n t h e surface, i t might appear that local companies
have more trust i n them.
However, i n depth discussion w i t h local managers revealed that their
telephone and mail techniques are not really modern survey research
methodology. For example, local managers very commonly call u p someone
such as colleagues, clients or agents and discuss t h e market situation
informally. This i s a "telephone interview" to them. Similarly, a n exchange of
letters about some market aspect i s a "mail interview". I n fact, door-to-door
personal interviews are sometimes m u c h the same thing. Modern quantitative
survey methods do not seem to have penetrated into local firms t o any great
extent. The international firms, however, were clearly talking about quantitative
survey research w h e n they discussed using these methods.
In-depth and focus group interviews, t h e main qualitative methods, are each
used by about half of t h e foreign participation companies. To the foreign
participation respondents, in-depth interviews or focus groups are used to
explore qualitative aspects of marketing problems and to develop deeper
understanding. Then, building o n the ideas developed through these methods,
quantitative surveys and/or observation is used t o gain a broader, quantitative,
overview of t h e problem. Few of t h e local firms use focus groups, while three-
fourths use in-depth interviewing. However, w h e n asked to describe the
qualitative methods they use, most local respondents were not talking about
t h e probing, guiding, in-depth interviewing techniques of modern qualitative
research.
Vietnemese Style Merketing Research
Of course, local managers w a n t accurate and useful information about their
markets as m u c h as foreign companies, but they go about it differently. Local
executives p u t much more faith i n information from wholesalers and retailers,
and they may track w h a t i s happening among channel members o n a monthly,
weekly and sometimes daily basis. Local managers pointed out that they can
get any information they w a n t by visiting wholesalers and retailers w h o carry
their products. Therefore, it i s not necessary to conduct much marketing
research w i t h t h e techniques considered common i n modern practice. Few
JlMMR Vol. 21 No. 3
local managers employ consumer surveys or other quantitative research tools.
Usually, general managers solicit ideas from business department or marketing
department heads. These officials are used to gather data or market signals
f r o m employees, clients, agents, friends and connections. I n addition, some
marketing information i s collected by salespeople.
Both "qualitative" and "quantitative" research to local managers refers
primarily to this channels research. Vietnamese style market research relies
heavily on "qualitative" data obtained through visits to dealers and other
channel members. It also makes heavy use of "quantitative" data about
shipments, inventory levels, distribution coverage, retail sales and turnover
rates. This also comes from channel members, as well as from special
relationships w i t h officials i n customs, ports and even competing firms.
This approach appears to lack the methodological rigor of modern market
research, and it certainly leaves local managers w i t h a more superficial
understanding of consumer buying behavior than many of their foreign
competitors have. O n the other hand, the Vietnamese approach allows a more
detailed knowledge of channel structure and relationships, as well as product
movement. Furthermore, frequent visits for gathering information contribute to
building long-term channel relationships, w h i c h is also a n important
competitive advantage. Frequent visits help manufacturers address problems i n
channels before they escalate and damage sales or relationships.
Both foreign and local firms make use of secondary sources also. I n fact, 60%
of local clients preferred to use secondary research, but the ratio was reversed
for foreign companies, w i t h more preferring to get primary data. Secondary
research is not quite as simple as i n more developed countries. A s noted above,
there are not many highly reliable secondary sources. The local press i s an
important source of information, especially for local managers. It is usually well
informed about government policy (because much of it is close to the
government), w h i c h is important i n a country where the government can
intervene i n business activities at any time and can shift policy daily. Some
large foreign operations among our respondents have set u p systematic
scanning of the local press and a n organized documetation system, to keep
track of every bit of market and trade information, as well as current
government policy. Over half of the foreign participation firms also purchase
syndicated research, but f e w local firms do.
Use of Research Suppliers
The majority of both local and foreign participation firms cited needs for a
wide variety of types of research. However, local firms generally regarded
research o n aspects of product as most important. Comparative testing against
competing products, testing for acceptance and improvement, analyzing market
potential for existing or n e w products are some of the most common answers
mentioned related to product. These kinds of things become very important
where firms develop and introduce products first, then find out later if
154 JlMMR Vol. 21 No. 3
customers w a n t them. Concept testing and screening n e w product ideas, brand
and packaging tests, and testing preferences for features were not mentioned
as often. Among foreign firms, the most important types of research were more
focused on issues associated w i t h consumer behavior and markets and
competition (Table 2).
Pricing research w a s rarely considered to be of critical importance among
1 local firms. Partly, this i s because pricing had little to do w i t h actual market
conditions i n the traditional state economy. Partly it is because many local
managers a priori assume that all customers are price conscious, so pricing is
1 just a matter of matching or undercutting competitors. Promotion was not
1 ranked as top importance by very many foreign firms. Here, they sometimes
seem to be a little bit overconfident that they know h o w to communicate to
Vietnamese consumers because they have experience i n other Southeast Asian
countries. But much of this l o w rating reflects the fact that they are likely to
rely upon their advertising agency to worry about whether advertising research
is needed.
Criteria for Choosing Outside Research Suppliers
Despite the fact that most respondents, local and foreign, cited very broad
needs for research, much data gathering is done i n house. Among local
companies, only 15% said that they had hired outside agencies t o do the work.
60% of foreign participation companies had gone outside. (These figures do not
include purchase of syndicated research from research suppliers.) However,
most local and foreign companies said they would consider hiring outside
research suppliers i n the future, even if they had not yet done so.
Foreign participation firms have a somewhat broader range of important
concerns w h e n choosing a marketing research supplier, as might be expected
given their greater experience i n using outside suppliers. For both local and
foreign firms, technical expertise w a s a top criteria. However, it stands well
above other criteria for local companies, but is one of several important criteria
for the foreign firms. They also frequently look for high-caliber executives i n the
research supplier, especially the executives w h o will oversee their project.
Foreign firms often consider long-term competitive price. It seems that local
companies do not really consider marketing research as a consistent. recurring
activity, so this is not much of a n issue to them.
Among local firms, experience i n the research buyer's industry, accuracy of
information, nationwide coverage. product knowledge and consulting advice
along w i t h research results also are, or would be, important criteria. The
consulting advice w a s needed particularly because they are not very used to
using research results to aid i n decision making, and wanted some guidance o n
h o w to do this. Only a f e w other criteria receive any mention. Foreign
companies often wanted to see a n established reputation i n marketing
research. similarly they wanted accurate information, experience i n the
JlMMR Vol. 21 No. 3
industry, and product knowledge. Some of them were also concerned about
interviewing skills. Foreign companies had a much wider set of criteria that
were also occasionally mentioned as most important (Table 3). Most of the
criteria listed in Table 3 were mentioned by many firms, even though they may
not have ranked them among the top i n importance.
Types of Supplier
There was a difference of opinion between local and foreign firms about
choosing a specialized vs. a general research supplier. 80% of local firms
interviewed preferred specialized firms, those which provided only very specific
research i n a particular industry. However. 55% of foreign participation firms
would rather work with general agencies, ones which could provide a wide
range of types of research and services.
Half of local firms said that they would rather hire a local research agency,
the others would rather use a foreign agency. Only 30% of foreign participation
firms would choose a local agency most of the time. Most of those who were
skeptical of local agencies said that the local agencies do not seem very
experienced i n marketing research, or lack technical expertise. The major
reason cited for wanting to use local agencies was for situations when local
knowledge was very important. However, lower price quotations for projects
was also a factor among some.
Local firms are most likely to choose a marketing research agency (55%) or
an academic institute as a marketing research supplier (40%). They rarely
mentioned using advertising firms, government departments, or press and
press agencies to conduct research. Foreign firms had broader choice of
suppliers. Marketing research agencies were most often mentioned as a major
source (65%), but half also would use the research capabilities of advertising
firms. 40% use government departments and information centres, and 35% hire
or would hire the press and press agencies to collect data. However, few
foreign firms mentioned using universities or academic institutes.
Knowledge and Decision about Research Suppliers
Respondents became aware of marketing research suppliers through a
variety of means. Most common, among both local and foreign participation
firms. is word-of-mouth, which is how about half of each learn of research
suppliers. Among the local firms i n the sample, the press was also a major
source of information (35%). and sales calls by research suppliers (25%) and
government authorities (20%) were also cited by some. Government authorities
usually meant that local suppliers had sufficiently good connections that
government officials would introduce the supplier to local firms.
Among foreign companies, i n addition to word-of-mouth, prior relationships
with the research supplier i n other countries was often a source of awareness
(35%). Thus, multinational research suppliers have an advantage in soliciting
JlMMR Vol. 2 1 No. 3
projects among foreign firms, who are more likely to commission projects. The
press (20%) and sales materials (20%) such as brochures also played a role.
Foreign companies mentioned that some local research suppliers make sales
calls. though this was not usually the means by which the foreign company
first became aware of the supplier. Some foreign companies use these sales
calls to identify local suppliers who can do some of the very standard types of
research at a lower cost. They would then rely on their foreign research
supplier mainly for more exacting or more specialized research.
I A wareness of Individual Suppliers
1 Local companies are not very well informed about the availability of
marketing research services. More than half of local respondents even claimed
that there are no companies i n Vietnam which provide marketing research
services. Most do not know anything about the foreign agencies i n the market.
Only 20% had heard of SRG Vietnam, which is probably the best known foreign
1 marketing research supplier, and they had not heard of any of the other foreign
companies. HoirJever, some local companies did know of some foreign
I consulting companies.
Among local suppliers, Hochiminh City University of Economics, the
Department of Statistics and Youth Advertising House were known to nearly
everyone. The Institute of Economics, VINAXAD, Saigon Advertising Company,
Saigon Information, Exhibition & Advertising Centre, and College of Marketing
also had quite high levels of awareness. However. not all of the companies
i who were aware of these organizations know that they offer some type of
marketing research service. Usually. local companies go to most of these
organizations for some other kind of service, though Hochiminh City University
of Economics and the Department of Statistics are considered important
sources of secondary data.
In contrast to local clients, foreign clients seem to be more aware of foreign
and equally aware of local suppliers. Awareness of Frank Small and MBL was
still quite low, but Frank Small did not actually have a permanent office in-
country at the time of research, and MBL was quite new know about almost all
agencies. Foreign companies often have some type of contact w i t h a variety of
agencies across ell categories of research supplier. Contact with many local
agencies is often indirect, coming through subcontracts to the local agency by
the foreign company's research supplier. Nevertheless, awareness levels of key
government institutes and universities is as high as among local companies.
1 And foreign participant companies are more likely to k n ~ w ~ s ~ e c i f i c about
what kinds of marketing research services these organizations offer.
ally
Decision Makers and Influences
I n local companies, the general manager nearly always makes final decisions
on use of marketing research, even though, as noted above, marketing research
JlMMR Vol. 2 1 No. 3 157
Universities and Colleges
College of Marketing University of Technology References
University of Economics University of Finance and Accounting
University of Hochiminh City
Far Eastern Economic Review (FEER), June 6, 1996. Advertising: Get M y Censor Sensor,
Consulting Firms
p. 61.
FlSC INVESCOM Ha Ngoc Linh, (1995). Distribution and Logistics System i n Laundry and Personal Care
IMC Investment Consultancy and Industrial Products: A n Exploratory Study Conducted i n Vietnam, Thailand and the Philippines.
INVESTCONSULT Property Co. Unpublished MBA Thesis, Asian Institute of Technology, Bangkok. Thailand. April 1995.
I
Others i Hoang Thi Phuong Thao, (1 996). Market Conditions for Chain Members and the Buying
Center for Economic Study and Application (CESAIS) Behavior of End Users of Oil Lubricants: The Case of the Shell Co. Unpublished M B A
Information and Marketing Center SCANVIET Thesis, Asian lnstitute of Technology, Bangkok. Thailand, April 1996.
Saigon Consultants Company No. 1 various free-lance individuals 1 Kindra. G. S., ed., (1983). Marketing i n Developing Countries. New York: St. M a r t ~ n ' s
II Press.
TABLE 2: PERCENTAGE RATING RESEARCH TOPICS TOP I N IMPORTANCE Nguyen Duc Tri, (1995). The Impact of Personal Selling, Store Service, and Sales Credit
on Strengthening Relationship Between Soft Drink Retailers and their Trade Customers i n
Local Foreign Hochiminh Citv. Vietnam. Unoublished M B A Thesis. Asian lnstitute of Technology.
Product 75 Consumer behavior 75 Bangkok. ~ h a i k n d April, 1995.
Market €4 competition 45 Market & competition 70 Nguyen Le Tin, (1995). A n Assessment of the Computer Industry i n Vietnam. Unpublished
Consumer behavior 40 Place 40 \ MBA Thesis. Asian Institute of Technology, Bangkok, Thailand, April 1995.
Promotion 35 Price ! ~ i u y e \n/ a " ~ s i & M. SpebMj (i995); Markrjting Conflicts i n Joint Ventures i n Vietnam.
40
Place 25 Product 35 I In: ~rocO$dl'fi&s~'~@.~thu 1@fdcbrif&f#"b bfi JGiiit VBhtures i n East Asia. Hochiminh City.
Government regulations 15 Promotion 10 Decembet~l99&.%ki@&~~&i!~%~,~hiii&si~, Kellstadt Centre for Marketing Planning and
Price 10 Government regulations 0 I bnalysis. pp. 1 ik??$ :it,.
Note: Respondents could choose more than one.
i
I
Shultz, C. J.'II,W: J.
Part II: P r o s ~ e c t sfor U.S.
27.
B~fiRhirf iH
~&cotlch.
. . ,- 1 . . : . .. . , - B Ndw
(1995). American Involvement i n Vietnam,
Era. Business Horizons, March-April. pp. 21 -
TABLE 3: PERCENTAGE RATING SUPPLIER CHOICE CRITERIATOP I N IMPORTANCE To Ngoc Huong. (1996). A n ln'vestigation of Consumers' and Managers' Attitudes toward
Criteria Local

1
Advertising i n Vietnam. Unpublished M B A Thesis, Asian lnstitute of Technology, Bangkok,
Technical expertise
Experience i n industry
55
30
Technical expertise
High caliber executives
Foreign
4.0 I Thailand, April 1,998;,.
Vietnam ~ " ~ illabffi&
k!:b&i;
"i& .
i-
G r i l 1196. Technology: Finding Your Computer. pp. 24-
40 !I ; y : p ; p $ ~ ; ~ ~ ~ : !
Accuracy of information 25 Long-term competitive price 35 26.
Nation-wide coverage 25 Corporate reputation 30
Vietnam Ecbd6&ii +f~&#'&m).
March 1996a. (Cover story on investment): Over? We're
Product knowledge 20 Accuracy of information Just Genlng StbhM, pp. 18-19; Policy Matters, pp. 20-21; Back to the Future, pp. 22-23.
Marketing advice
Quality control/monitoring
20
10
Experience i n industry
Product knowledge
25
20
20
1 Vietnam keno+
or Worm, p. 27.
Time$ &T), March 1996b. Defining Social Evils, pp. 24-25; For Better
Experience throughout Asia 10 Highly skilled interviewers 20 Vietnam Economic T imes (VFT), April 1996a (Cover story on consumer market): Cashing
High caliber executives 5 Meet deadlines 15 i n on Consumer Trends. pp. 16-18; Ruling the Airwaves, pp. 20-21; Hey, Big Spenderl. p.
Local consumer knowledge 5 Local consumer knowledge

i
10 23.
Lor'ig-term competitive price 0 Famous name 10 Vietnam Economic Times (VFT), April 1 9 9 6 b Foreign Investment, pp. 12-13; Favorable
Corporate reputation 0 Data processing capability 10 Investment Environment, pp. 16-17.
Highly skilled interviewers 0 Questionnaire design . 10 Vietnam Today (VT). 1995, lnformation Technology Development i n Vietnam, VT 4 (6). pp.
Meet deadlines 0 International operations 10 6-10.
Famous name 0 Clients are major companies
10
Data processing capability 0 Quality control/monitoring 10
Questionnaire design 0 Nation-wide coverage 5 Mr. 7ren Oeng Vu is at the Centre for Economic Studies end Applications. HoChiMinh City University of
International operations 1 Economics. HoChiMinh City, Vietnam endDr. MerkSpeeceis at theSchoolofMenagement, Asian lnsriture
0 Variety of research types 5 r of Technology, Bangkok, Theilend
Clients are major companies 0 Anonymity and security 5
Variety of research types 0 Marketing advice 0
Anonymity and security 0 Experience throughout Asia 0
Notes: Respondents could choose more than one.
~ ..
Figures include those who use and those w h o would consider using outside
research suppliers.

J l M M R Vol. 21 No. 3 J l M M R Vol. 21 No. 3