MINISTRY OF FINANCE

UNIVERSITY OF FINANCE - MARKETING

INTERNATIONAL SCHOOL OF FINANCE–MARKETING

Nguyen Thi Cam Tu

Student ID: 1821002362

GRADUATION PROJECT
MARKETING SOLUTIONS TO PROMOTE INDIVIDUAL
CREDITS AT SCB HANOI

Major: Marketing

Ho Chi Minh City, May, 2022

 MINISTRY OF FINANCE

UNIVERSITY OF FINANCE - MARKETING

INTERNATIONAL SCHOOL OF FINANCE–MARKETING

Nguyen Thi Cam Tu

Student ID: 1821002362

GRADUATION PROJECT
MARKETING SOLUTIONS TO PROMOTE INDIVIDUAL
CREDITS AT SCB HANOI

Major: Marketing

Instructor: Ph.D Dang Van My

Ho Chi Minh City, May, 2022

 ACKNOWLEDGMENTS

This author will not succeed without assistance. As a result, the author would
like to take this opportunity to thank a number of people for their assistance in
completing the writing.

First and foremost, I want to express my heartfelt gratitude to my mentor, Ph.D

Dang Van My. The thesis was effectively completed thanks to the coaching and
candid feedback.

Finally, I'd want to express my gratitude to SCB Ha Noi for providing me with
the chance to expand my knowledge in order to complete my graduate thesis and
work here.

i
 CỘNG HÒA XÃ HỘI CHỦ NGHĨA VIỆT NAM

Độc lập - Tự do - Hạnh phúc

-------------------------

Thành phố Hồ Chí Minh, ngày tháng năm 20

GIẤY XÁC NHẬN THỰC TẬP

CÔNG TY..................................................................................................................................

Xác nhận:

- Sinh viên: .....................................................Ngày/tháng/năm sinh: .......................................

- MSSV............................................................Lớp:...................................................................

- Trường: Đại học Tài chính – Marketing..................................................................................

- Đã hoàn thành đợt thực tập tại Công ty....................................................................................

- Từ ngày ........................................................Đến ngày............................................................

- Vị trí thực tập: .........................................................................................................................

- Đơn vị thực tập trong công ty:..................................................................................................

Nhận xét của Công ty về quá trình thực tập của sinh viên:

....................................................................................................................................................

....................................................................................................................................................

....................................................................................................................................................

....................................................................................................................................................

GIÁM ĐỐC

(Ký tên và đóng dấu)

ii
 ĐÁNH GIÁ CỦA GIẢNG VIÊN HƯỚNG DẪN

1. NHẬN XÉT

Quá trình thực tập:

.........................................................................................................................................

.........................................................................................................................................

Báo cáo thực tập:

.........................................................................................................................................

.........................................................................................................................................

2. ĐIỂM

(Theo thang điểm 10)

ĐIỂM QUÁ TRÌNH Điểm
…/
2. Tuân thủ qui định của Trường, của Khoa
1.5
…/
3. Thực hiện tiến độ THNN và viết báo cáo
3.0
…/
4. Sự năng động, hiểu biết, sáng tạo, vượt khó
3.0
5. Văn hóa ứng xử, đạo đức tác phong, chấp hành những chỉ dẫn của …/
GVHD 2.5
Tổng cộng …/10
ĐIỂM BÁO CÁO Điểm
1. Hình thức (format đúng qui định, trình bày đẹp, không có lỗi chính tả, số …/
trang trong khoảng cho phép, đóng cuốn theo qui định) 3.0
…/
2. Bố cục hợp lý, Trình bày dễ hiểu, văn phong chỉnh chu
1.0
…/
3. Phương pháp nghiên cứu và công cụ phân tích phù hợp
1.0
4. Lý thuyết, thông tin, dữ liệu (chính xác, toàn diện, cập nhật) …/

iii
 2.0
…/
5. Phân tích và đánh giá đúng thực tiễn
2.0
…/
6. Giải pháp đề xuất có tính thực tiễn, sáng tạo và phù hợp
1.0
Tổng cộng …/10
GIẢNG VIÊN HƯỚNG DẪN

iv
 TABLE OF CONTENTS

ACKNOWLEDGMENTS............................................................................................i

TABLE OF CONTENTS...........................................................................................iv

LIST OF TABLES......................................................................................................vi

INTRODUCTION.......................................................................................................1

CHAPTER 1: THEORY OF MARKETING............................................................8

1.1. Banking business characteristics......................................................................8

1.2. Basic concepts, characteristics and functions of marketing.............................9

1.2.1. Basic concepts.........................................................................................9

1.2.2. Characteristics of marketing..................................................................10

1.2.3. Role of marketing..................................................................................10

1.2.4. Functions of marketing..........................................................................14

1.3. Marketing activities in the bank.....................................................................15

1.3.1. Bank marketing concept........................................................................15

1.3.2. Bank of marketing characteristics.........................................................16

1.3.3. Marketing Policies.................................................................................17

CHAPTER 2: ANALYSIS AND ASSESSMENT OF MARKETING

ACTIVITIES FOR CREDIT PRODUCTS AT SCB HANOI...............................25

2.1. Overview of SCB Hanoi.................................................................................25

2.1.1. History of development.........................................................................25

2.1.2. Functions, tasks and operational goals..................................................25

2.1.3. Organizational structure........................................................................27

2.2. Credit supply situation at SCB Hanoi............................................................29

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 2.2.1. Achievement..........................................................................................29

2.2.2. Limited and causes................................................................................33

2.3. Analysis and evaluation of Marketing credit activities at SCB Hanoi...........35

2.3.1. Product...................................................................................................35

2.3.2. Price.......................................................................................................37

2.3.3. Place......................................................................................................39

2.3.4. Promotion..............................................................................................41

2.3.5. People....................................................................................................43

2.3.6. The process of providing products and services...................................44

2.3.7. Physical evidence..................................................................................45

2.4. Evaluation of pros and cons...........................................................................46

2.4.1. Advantages............................................................................................46

2.4.2. Limited and causes................................................................................46

CHAPTER 3: MARKETING SOLUTIONS TO PROMOTE INDIVIDUAL

CREDITS AT SCB HANOI.....................................................................................48

3.1. Orientation for personal credit development at SCB.....................................48

3.2. Marketing solutions to increase credit supply to individual customers.........49

3.2.1 For traditional distribution channels:.....................................................49

3.2.2 Personal credit product development solutions......................................50

3.2.3. Solutions to improve processes and personal credit policies................54

3.2.4. Solutions for propaganda and advertising of products and services.....56

3.3. RECOMMENDATIONS...............................................................................58

CONCLUSION..........................................................................................................60

REFERENCES..........................................................................................................61

vi
 LIST OF TABLES

Table 2.1. Credit balance for the period of 2018-2020 (billions dong).......................29

Table 2.2. Den loans for time limit for the period of 2018-2020 (millions dong)......30

Table 2.3. Customer's outstanding loans for capital use purposesfor the period of
2018-2020 (millions dong)..........................................................................................35

Table 2.4. Outstanding loans in the form of guarantee for the period of 2018-2020
(millions dong)............................................................................................................36

Table 2.5. Comparison of direct distribution channels of banks in 2021....................39

vii
 INTRODUCTION

Rational

Vietnam’s participation in the signing of many free trade agreements as well as its
deep integration into the world economy is making the banking and financial market
more exciting and attractive in the eyes of foreign investors. However, the current
problem is that the competitiveness of joint stock commercial banks is very low,
which requires the need to quickly improve the competitiveness of the Vietnamese
banking system (Stewart, Matousek & Nguyen, 2016). In which, one of the important
solutions is to improve the efficiency of marketing activities at the bank in the new
context. According to Mehdiabadi et al. (2020), Marketing is a necessary activity not
only for production and business enterprises, but also used flexibly and effectively by
banks, especially in expanding credit activities, one of the most important activities in
the world. important for the profitability of the bank. In the market economy, how to
win the competition is always the top concern of banks. Through market research,
with its policy of developing market share and policies on its customers, the bank will
collect information, understand the market as well as customers’ needs, thereby
creating products that can best satisfy the needs of customers, improving the bank’s
competitiveness.

At SCB Bank - Hanoi Branch (SCB Hanoi) is currently providing many

products approved by SCB headquarters. Among them are products related to
deposits, loans, card product development... These are achievements recognized by
the SCB system with certificates of merit and awards every year. To achieve this
achievement, all staffs of the Branch have made great efforts. However, due to the
impact of the Covid-19 pandemic, the bank that wants to survive and develop must
increase the level of competition with increasingly fierce intensity, be ready to apply
all measures to maximize profits for their customers. their business activities. To do
this, many banks are willing to apply the achievements of the field of Marketing into
business practice.

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 In addition, Hoang et al. (2021) also shows that the existence and development
of the Branch depends greatly on whether SCB Hanoi can sell products and service,
which is not only the key to determining the growth but also the competitiveness of
the branch, thereby contributing to its business performance. Only when the services
are used well will the branch have revenue, thereby continuing to exist and develop.
It can be affirmed that an effective branch must be a branch that knows how to handle
sales well. Therefore, building and perfecting a marketing activities with specific
strategies and measures to promote credits will be the sharpest and most effective
competitive tool for SCB Hanoi to compete with competitors in the same area.
Recognizing the importance of this issue as well as wanting to contribute ideas so that
only the branch can promote business activities, improve the competitiveness of
products. Thereby, the report aims to propose marketing solutions to promote
individual credit at SCB Hanoi.

Literature review

Commercial Bank

Latha & Shanmugam (2015) explain that a commercial bank is a type of financial
institution that accepts deposits, provides checking accounts, makes various loans and
provide basic financial products such as certificates of deposit and savings accounts
to individuals and businesses. Harrieti et al. (2020) add that commercial bank is a
credit institution that is entitled to carry out all banking activities and other related
business activities for profit purposes in accordance with the Law on Credit
Institutions and other provisions of the law. Do, Ngo & Phung (2020) say that
commercial banks do business by providing loans and earning profits from those
loans. The types of loans that commercial banks can issue vary and can include
mortgages, auto loans, business loans, and personal loans. A commercial bank can
specialize in one or several types of loans to serve the needs of customers and earn
profits in the banking business. Ichsan et al. (2021) share that Banking activities are
monetary business and banking services with the regular content of receiving deposits
and using this money to extend credit and provide payment services.

2
 Through the understanding of commercial banks, some basic characteristics of
commercial banks can be drawn as follows: Commercial bank is a monetary
organization, permitted by law to mobilize and hold money from the public with the
responsibility to repay in accordance with the provisions of law (Shekhar &
Lekshmy, 2005). Commercial banks are permitted by law to use funds raised from the
public to lend or perform other financial services. Koch & MacDonald (2014) find
that commercial banks are one of the financial institutions that are characterized by
providing a variety of financial services with the basic business of taking deposits,
lending and providing payment and financial services.

Commercial banks are an important intermediary financial institution in the market

economy, thanks to this system of institutions, idle funds will be mobilized to create
huge credit capital to be able to lend for economic development. Today, commercial
banks are a financial institution that plays a huge role in the economy, providing
finance for individuals and businesses; providing financial services, mobilizing
residential capital (Jha & Hui, 2012). Commercial banks are also a bridge between
people who have idle money and those who need to use money in production and
business activities. Commercial banks carry out monetary business, serving all
classes of people, businesses and society, at the same time, commercial banks help
the market balance money sources, help people with loan needs and borrowers meet
each other, thereby creating profits for all three parties and developing the economy.
Commercial banks develop everywhere in the country and around the world.
Business Dictionary states the concept of commercial banks as performing banking
services for individual customers, not for businesses and organizations. Aduda &
Kingoo (2012) says that any organization that provides a deposit account, allows
customers to withdraw money on demand and makes loans to business or commercial
lending institutions is considered a bank.

3
Concept of credit

According to Song, Yu & Lu (2018), Credit is an economic category that reflects a

transactional relationship between two entities, in which one party transfers an
amount of value to the other party to be used for a certain period of time, and at the
same time the other party receives the credit. must commit to repay within the agreed
term. This transactional relationship shows the following contents (Bellucci, Borisov
& Zazzaro, 2013): The lender transfers to the borrower a certain amount of value.
This value can be in the form of money or in the form of objects such as goods,
machinery, equipment, real estate; Borrowers can only use them temporarily for a
certain period of time, after the expiry of the agreed-upon term, the borrower must
repay them to the lender; The repayment value is usually greater than the original
loan value, in other words, the borrower has to pay more interest.

In short, credit is an economic category that reflects the relationship of mutual use of
capital between entities in the economy on the principle of repaying both capital and
interest. Bank credit is a credit relationship between a bank on the one hand and other
entities in the economy on the other, in which the bank plays the role of both a
borrower and a lender (Werner, 2014). In other words, a bank is a financial
intermediary that moves capital from a place of temporary excess to a place of
shortage. The interest rate of the loan set by the bank to the borrower is the rate of
interest that the customer must pay over the life of the loan. The parties involved in
the bank credit relationship are banks, the State, enterprises and households. The
object used in the credit relationship is money, so it is not limited by goods, multi-
dimensional movement. This is the outstanding advantage and distinguishing feature
between bank credit and other types of credit.

Banking marketing

Marketing has become the theory of modern business, a tool to associate business
activities with the market, a key stage of business activities and development.
Marketing is becoming more and more essential for businesses in all areas of the
economy and society. According to Awwad & Agti (2011),

4
Banking marketing is an integrated management method based on awareness of the
business environment; the bank’s actions to best meet the needs of customers, in line
with changes in the environment. On that basis, the bank's goals are realized.
Therefore, improving the efficiency of marketing activities in banks has been chosen
by some authors as a topic in research works. Ferrell, Hartline & Hochstein
(2021)affirm that building an effective marketing mix is not easy. From studying the
operating environment, identifying customer needs, or setting goals for a marketing
strategy, to allocating resources to implement that marketing strategy… That means
preparing and executing a strategy. a truly scientific and methodical marketing
strategy, rooted in creating an environment in which marketing is not a separate
function, but an integrated part of all credit activities, from underwriting development
to product development and customer retention, offering policies that promote the
most effective use of marketing activities, and at the same time, depending on the
business philosophy, structure, and finance of the bank.

(Kotler, P., et al., 2015) state that Banking marketing belongs to the business
marketing group, is a special field of the service industry, formed on the basis of
applying the content, principles, techniques ... of modern marketing to banking
activities. There are different views on bank marketing. Peppers & Rogers (2016) say
that Bank marketing can be understood simply as marketing applied to bank
operations to satisfy customer needs and obtain optimal profits. Chiteli (2013)
explains that Banking marketing is a market approach activity of commercial banks
in order to detect the demand for products and services from which the bank can
satisfy that demand in order to bring the highest efficiency in business activities.
Thus, it can be understood that Banking marketing is the systematic process of
planning, organizing and implementing activities to understand, discover and satisfy
the needs of target customers, through policies and solutions in line with the bank's
general business and strategic goals, in order to provide customers with superior
values compared to the services of competitors. Marketing is a business philosophy,
taking the idea of satisfying customer needs and wants as the motto for a business
endeavor. Bank marketing does not consider profit as the first and only goal, but

5
believes that profit is the ultimate goal and a measure of each bank's marketing level.

Farquhar & Meidan (2017) say that Banking marketing is a type of financial
service marketing. The service industries are very diverse and rich. In the service
sector, there are professional services, financial services, travel services and other
services. According to Kotler et al. (2015), a service is an activity or benefit offered
for exchange that is essentially intangible and does not result in the transfer of
ownership.” Therefore, the study of service characteristics will be the basis for a well-
organized banking marketing process. Due to the intangible nature of services,
banking services are not stored as a reserve for times of strong demand. Users of
banking services have to wait to be provided with the desired service, while the bank
can sense its own service limits and therefore must regularly adjust the supply and
demand relationship. Another consequence of intangibility is the absence of
protection. Banking services cannot be granted intellectual property rights. They are
often flashed back, imitated. The difference in banking services is not a long-term
competitive factor.

Research aims

The study aims to explore marketing mix at SCB Hanoi, then proposing some
solutions to promote marketing for individual credits at SCB Hanoi. Specifically,
there are objectives as:

Systematize the general theories of marketing mix at commercial banks.

Analyzing the marketing situation for credit activities at SCB Hanoi. Evaluation
of the results and limitations of the bank on the marketing mix at SCB.

Proposing solutions to promote the marketing mix for individual credits at SCB
Hanoi in the coming time.

Research scope

Marketing mix in Vietnam commercial banks in general, and SCB Hanoi in

particular.

Scope of space: at SCB Hanoi

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 Scope of time: research in the period 2016-2021 and propose solutions to 2025

Research method

The paper employs a mix method, including:

Research method at desk: through domestic and foreign research documents

combined with sources of books, newspapers, magazines and related legal documents
system; the author systematizes the theoretical basis and theoretical issues related to
the research concept;

The method of statistics, synthesis, observation and analysis is based on the

business report data of SCB Hanoi to evaluate and clarify the current status of
marketing activities for credit cards;

Method of comparing and contrasting marketing activities for credit cards of

SCB Hanoi for the period 2016 - 2021, thereby offering some appropriate solutions to
promote the effectiveness of marketing activities for individual credit;

7
CHAPTER 1: THEORY OF MARKETING

Marketing is one of the bank's core tasks, allowing it to better understand client
demands and establish supply channels for all of the bank's target audiences.
However, due to the unique nature of banking products and services, marketing in
banks differs significantly from marketing in other industries.

1.1. BANKING BUSINESS CHARACTERISTICS

Commercial bank is a special enterprise. The special features of the banking business
are shown in the following contents:

Business lines of the bank are currency, credit and banking services. This is a special
field because first of all, it is directly related to all industries, related to all aspects of
socio-economic life (Burianová & Paulík, 2014). On the other hand, the monetary
banking sector is a very sensitive field, it requires a careful management of banking
activities to avoid damage to the economy - society. The business material of a bank is
money, and money is a tool used by the state to manage the macro economy, it
determines the development or recession of an entire economy. This material is strictly
controlled by the state. Chiteli (2013) explains that As an enterprise, but the main
source of capital that the bank uses in its business is capital mobilized from outside,
while the bank's own capital accounts for a very low proportion of total business
capital. In the total assets of the bank, tangible assets account for a very low proportion,
but mainly intangible assets. It exists in the form of financial assets, such as promissory
notes, stocks, credit contracts, promissory notes, and other valuable papers.

Koch & MacDonald (2014) add that Business activities of commercial banks are
greatly influenced by the monetary policy of the central bank. A commercial bank
cannot expand its business when the central bank is applying the policy of freezing
the currency, limiting inflation and vice versa. Therefore, whether a bank expands or
shrinks its business is subject to the monetary policy of the central bank.

8
Commercial bank is a credit intermediary, playing the role of an intermediary
organization to centralize, mobilize temporarily idle monetary capital in the economy,
turning it into a source of credit to lend to meet the needs of customers. business
capital and investment capital needs for economic sectors, consumption capital needs
of the whole society. Thus, it can be said that commercial banks are the bridge
connecting those who have excess capital with those who lack capital.

1.2. BASIC CONCEPTS, CHARACTERISTICS AND FUNCTIONS OF

MARKETING

1.2.1. Basic concepts

There are many concepts of Marketing, because Marketing is an integral part of

business, especially in the modern business society and expands without limitation,
so there are also many researchers who are giving these concepts. Different concepts
of Marketing. According to Kotler et al. (2015), Marketing is a human activity
directed at satisfying needs and wants through an exchange process. Stoian et al.
(2018) say that Marketing is the totality of methods such as market research, product
policy, price, distribution ... that an enterprise uses to sell to customers and carry out
implementation. Marketing is a popular form of connection between banks and
customers based on many different methods (Pansari & Kumar, 2017). It can be
through direct communication, it can be through documents, it can be through sound,
images and programs of activities to create effects with customers. All those
programs implemented by the bank to attract customers to the bank, use the bank’s
services and maintain the relationship between the bank and the customer. Therefore,
through the study of the concept of marketing, the author can generalize as follows:
Marketing is a product of the commodity economy, showing that business is not just
luck and success cannot be relied on, but also depends on the artistic level of each
trader, on the basis of grasping the market, understanding the needs of consumers and
the exchange process, and at the same time creating ways to best satisfy the needs of
customers, on that basis, realize the goals of the enterprise.

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1.2.2. Characteristics of marketing

Mandhachitara & Poolthong (2011) say that Banking marketing is a type of inward
marketing. Banking services are provided normally through direct transactions
between bank employees, customers, and also the presence of other customers. In
which, employees are an important factor in the process of providing and delivering
banking products and services. They play a decisive role in terms of quantity, quality
structure of products and services provided and also the relationship between
customers and the bank. It is the staff that makes the difference, the personality of the
bank’s goods, products and services, increases the actual value of the services
provided, the ability to attract customers and the competitive position of the bank.
Therefore, inward marketing is carried out in the direction of investment and human
resource development of the bank, affecting the beliefs, attitudes and behaviors of
employees through attractive salary and remuneration policies. arrange reasonable
work, encourage them to develop their capacity... Alrubaiee & Al-Nazer (2010) state
that Bank marketing belongs to the type of relationship marketing. Relationship
marketing includes activities to attract, maintain and improve relationships between
customers and banks. Accordingly, it requires the marketing department to focus all
resources on perfecting the exchange relationship between customers and banks,
especially maintaining existing customers, and at the same time taking many
measures to attract customers. future customers through creating value for customers.
The greatest outcome of relationship marketing is to ensure that the bank's operations
are built on the basis of good business relationships. It is understanding, trust,
interdependence and mutual support for sustainable development

1.2.3. Role of marketing

Since the 60s of the last century, banking marketing has been interested and become
quite popular in retail banking activities in the US. In the 1970s, marketing was
developed into the banking business in the UK and other Western European
countries. By the 1980s and later, marketing was widely applied in countries with
developed market economies in the world (Charter, 2017).

10
 With the trend of globalization and international economic integration, especially
with the appearance of financial institutions and foreign investors, commercial banks
in Vietnam have begun to pay attention to marketing and implementation in practice,
in order to improve business performance. Currently, there are many different views
on banking marketing in the world or in Vietnam. Pakurár et al. (2019) share that
banking marketing is the organization and coordination of banking departments to
identify and meet the financial service needs of customers quickly and most
effectively based on the goal of customer satisfaction. In fact, banking marketing
activities bring a lot of benefits to commercial banks. In particular, the role of
banking marketing is shown through the following contents:

Saeidi et al. (2015) find that Marketing contributes to promoting the brand, improving
the awareness, promoting the image, enhancing the reputation and increasing the
competitive position for the bank. This is one of the most important roles of bank
marketing. The characteristic of banking business is that the products and services
provided are relatively similar between commercial banks, so creating a difference to
increase competitive position is very important. The creation of a competitive
position of banking products and services depends largely on the marketing
capabilities and qualifications of each bank. Farquhar & Meidan (2017) add that
Marketing helps banks to identify market factors, customer needs for banking
products and services and their fluctuations. Marketing activities will act as a bridge
to provide information, guide the movement of capital, exploit the ability to raise
capital, and allocate capital according to market needs in a reasonable way. Thanks to
marketing, the bank's management is able to coordinate and direct all activities of the
bank to satisfy the needs of potential customers at the most profitable level for the
bank.

Mohd Ali & Sovaniski (2021) state that Marketing is a tool to help commercial banks
increase their competitiveness in the market. Business activities of commercial banks
are in the field of money, credit and banking, facing an overarching operating
environment. The business environment is constantly changing and the battle for the
market is increasingly fierce, requiring commercial banks to choose the appropriate
structure and operation method.

11
Marketing is a tool that helps commercial banks resources to be effectively
distributed and used in accordance with market signals through all departments and
employees of the bank to better meet the needs of customers.

According to Moro-Visconti, Cruz Rambaud & López Pascual (2020), Marketing

helps the bank to participate in solving the fundamental problems in the banking
business. This role is performed through activities such as: Determining the type of
products and services that the bank needs to provide to the market; Organizing the
process of providing products and services and perfecting the exchange relationship
between customers and banks in the market... After collecting information,
researching consumer behavior, choosing strategic services, the set The marketing
department organizes support for the supply and promotion of products, and at the
same time evaluates and collects feedback to improve operations, business
procedures, and resolve the beneficial relationship between customers and the bank in
order to creating the most optimal convenience and efficiency, to receive the highest
customer satisfaction.

Doole & Lowe (2012) find that Marketing mix is an indispensable activity in all
business operations of the bank, a service that is no longer new to the Vietnamese
market, the benefits of the card are growing day by day. This development process
depends on whether Vietnamese commercial banks can dominate the market or not,
this completely depends on each bank's credit card marketing strategy and policy.
The role of marketing activities of banks is shown:

First, bank marketing is a profit-oriented state of mind. To get the desired profit, it is
necessary to have specific measures and policies in all activities of the bank. The
same is true for credit activities, when to put products on the market, with specific
products and utilities, etc. will be decisive for the success or failure of this activity.
With marketing tools, banks will understand the market, classify potential customers,
find the most suitable market segment with their capabilities (Linoff & Berry, 2011).
The necessity of marketing activities for credit products is that commercial banks
decide on the type of credit product, or credit service.

12
At the same time, during this period, banks also promote activities to raise awareness
of domestic consumers about SCB bank credit. This is a perfectly reasonable strategy,
in line with market movements and has brought success to banks in credit activities.
This is largely due to a good marketing strategy that has given managers accurate,
timely decisions, keeping up with the market.

Second, marketing is a tool for banks to raise awareness about credit products for
potential customers, thereby increasing the number of customers for commercial
banks (Dubauskas & Išoraitė, 2020). For credit activities, customers here include both
individuals and organizations. These two customer objects have a close relationship
with each other, the development of this object will lead to the development of the
other object and vice versa. Because of this feature, in their credit development
activities, banks need to simultaneously pay attention to developing both customers.
With marketing tools, the bank is completely able to get information about the bank’s
potential customers. The bank knows exactly the points in the service that make
customers unhappy, the strengths of the credit services provided by other banks, it
will easily gain an advantage in the market, and at the same time make reasonable
strategic development decisions. Moreover, the credit market is also a fiercely
competitive market that if each bank does not have a reasonable marketing strategy, it
will quickly be eliminated from this business machine. According to Luchs, Swan &
Creusen (2016), Marketing research is carried out for the purpose of developing new
products or improving products, often involving the identification of unmet consumer
needs. Customer need is central in market segmentation which involves dividing a
market into distinct groups of buyers on the basis of distinct needs, characteristics, or
behaviors that may require products or distinct marketing mix. Need-based
segmentation, also known as benefit segmentation, puts customer wants first in terms
of how a company designs and markets a product or service. Although demand-based
segmentation is difficult to do in practice, it has proven to be one of the most
effective ways to segment a market. In addition, many advertisements and promotions
are designed to demonstrate the benefits of a certain product that fulfills a customer’s
need, wants or expectations of customers in their own unique way, also known as
marketing differentiation.

13
1.2.4. Functions of marketing

Kotler et al. (2015) say that Marketing is the function that links consumers, customers
and the public to the bank through information. Personal information used to identify
and identify marketing opportunities and problems; create, refine and evaluate
marketing actions; monitoring marketing effectiveness; and improve understanding of
marketing as a process. Marketing research identifies the information needed to solve
these problems, designs methods for collecting the information, manages and
implements the data collection process, analyzes the results, and communicates their
results and implications. According to Farquhar & Meidan (2017), Bank marketing
has the following main functions:

First, the function of making banking products and services adapt to the needs of the
market that make the bank's products and services more attractive, different, bring
many utilities and benefits, meet the diversified, innovative and increasing needs of
customers, create competitive advantages. This is the adaptive function of marketing.
Performing this function means that the marketing department must study the market,
identify the needs, requirements, desires and changing trends of customers' needs, on
that basis, marketing closely links between market research activities with parts in
designing, standardizing new products and services and providing better products and
services than market demands.

Second, it is distribution function. The distribution function of banking marketing is

the entire process of organizing the delivery of the bank's products and services to
selected customer groups. The content of the distribution function includes: Find out
customers and select potential customers; Guide customers in choosing and using
banking products and services; Organize support services for banks; Organizing
customer service activities at transaction locations; Research and develop a modern
distribution channel system to meet the needs of customers.

Third, service used function is also function of marketing. The use of banking
products and services depends on many factors, but the most important are the quality
of products and services, the reasonableness of prices and the artistic level of the
direct transaction staff.

14
Implementing the service used function requires banks to put the interests of
customers higher and requires direct sales staff to have the art of selling, therefore,
banks are very interested in training. create and improve staff qualifications. At the
same time, this function also specifies the sales process that all dealers must follow:
Get to know customers; Preparation for contact with customers; Customer access;
Introduce products and services and guide usage procedures; Properly handle
problems that occur; Final contact with customers;

Fourth, there is support function of marketing. The function supports favorable

conditions for the good performance of the above three functions and enhances the
safety of banking business. Support activities include: Advertisement; Propagate;
Fairs, customer conferences. In short, te above four functions have an intimate
relationship with each other, mutually supporting each other for development. Of the
four functions, the function that adapts banking products and services to market needs
is the most important.

1.3. MARKETING ACTIVITIES IN THE BANK

1.3.1. Bank marketing concept.

Bank marketing is the practice of attracting and acquiring new customers through
traditional media and digital media strategies. The use of these media strategies helps
determine what kind of customer is attracted to certain institutions. This also includes
different banking institutions purposefully using different strategies to attract the type
of customer they want to do business with.

Banking marketing is a market approach activity performed by commercial banks in

order to recognize the demand for products and services and determine how the bank
can meet that demand in order to maximize efficiency in business operations.

Thus, banking marketing can be defined as the systematic process of planning,

organizing, and implementing activities to understand, discover, and satisfy the needs
of target customers through policies and solutions aligned with the bank's overall
business and strategic goals, in order to provide customers with superior values
compared to competitors' services.

15
Marketing is a business philosophy that uses the concept of satisfying consumer
requirements and desires as the credo for a commercial venture. Profit is neither the
primary and only goal of bank marketing; rather, profit is the ultimate goal and a
gauge of each bank's marketing level.

1.3.2. Bank of marketing characteristics

A sort of financial service marketing in banking marketing: The service industry is

vast and diversified. Professional services, financial services, travel services, and
other services are all part of the service industry. "A service is a basically intangible
activity or benefits supplied for exchange that does not result in the transfer of
ownership," says Philip Kotler. As a result, a well-organized banking marketing
approach will be built on the research of service characteristics.

Banking services are not kept in reserve during times of high demand due to their
intangible nature. Users of financial services must wait for the required service, while
the bank can detect its own service constraints and must alter the supply and demand
relationship on a regular basis. The absence of protection is another consequence of
intangibility. Intellectual property rights cannot be extended to banking services.
They are often replayed and mimicked. Banking service differences are not a long-
term competitive force.

Banking services are often supplied through direct exchanges between bank
personnel and consumers, as well as the presence of other customers, which is a sort
of inward marketing. In which workers play a critical role in the provision and
delivery of banking goods and services. They have a significant impact on the
amount, quality, and structure of products and services delivered, as well as the
customer-bank relationship. The quality of the commodities, the banking products
and services, the rise in the real value of the services offered, the bank's capacity to
attract consumers, and the bank's competitive position all make a difference bank
Therefore, inward marketing is carried out in the direction of investment and human
resource development of the bank, affecting the beliefs, attitudes and behaviors of
employees through attractive salary and remuneration policies. arrange reasonable
work, encourage them to develop their capacity...

16
Relationship marketing is a sort of bank marketing: Relationship marketing entails
actions aimed at attracting, maintaining, and improving customer-banking
connections. As a result, the marketing department must devote all of its efforts to
enhancing the customer-bank exchange connection, particularly in terms of retaining
existing customers, while also taking several measures to acquire new consumers.
potential consumers by providing value to current ones The most important result of
relationship marketing is that the bank's operations are based on solid business
connections. Understanding, trust, dependency, and mutual support are essential for
long-term success.

1.3.3. Marketing Policies

Marketing is an overall system of organizational activities designed to plan, price,

promote, and distribute products, services, and ideas to meet the needs of the target
market and achieve the organization’s goals. There are main policies of marketing
activites as:

Product policy

A product is anything that can be offered to a market for attention, purchase, use that
may satisfy a want or need. Product consists of five different levels: core benefit,
generic product, expected product, finished product, and latent product. Product is the
first and most important element of marketing. The product policy requires the
following decisions to be made:

Decisions on product categories and product types, including decisions related to the
width, length, and depth of the mix, ie how many types of products the business
should trade, and the total number of products. in product categories, product
portfolio uniformity. This is essentially a decision regarding the addition or removal
of products in the product mix. From there, businesses can promote their business
activities in 4 directions: Introduce new product categories to expand product
portfolio; Extend existing product categories to become a complete product business;
Adding different items for each product type and increasing the depth of the product
portfolio; Try to keep more or less uniformity depending on whether they want to
have a solid reputation in one field or participate in many different fields.

17
Deciding on product labels and packaging, including brand names, signs, trademarks,
product packaging and labeling. The product's brand and packaging must speak to the
total value of the product, the theme of the product to position and reposition the
product, the products with its components, and a number of other related issues. The
objective is to create conditions for customers to know, notice and distinguish from
other very diverse products on the market.

Decide on customer service, for tangible products, it is often accompanied by some

support services for the product to increase the ability to attract customers. The
company needs to find out which service customers value the most, the relative
importance of that service, and offer the most appropriate support services such as
installation, user training, maintenance services, repair and financing.

New product development decisions, new products have many categories such as
brand new products, innovative new products, products with new positioning, new
products for new market segments. Businesses are afraid to launch new products
because it is difficult to succeed due to many reasons. To develop a new product
normally has to go through stages: idea generation, idea screening, concept
development and testing, marketing strategy planning, business analysis, product
development, market testing, product commercialization.

Product life cycle strategy, depending on the characteristics of the product, the
product life cycle can be in the forms: "development - sudden decline - saturation".
"cycle - repeating cycle", waveform... but typically it goes through 4 stages of
introduction, development, prolificness and decline. Enterprises need to properly
determine which stage their products fall in to have appropriate behavior.

Price policy

Hadad & Bratianu (2019) explain that Price is the amount agreed between a buyer
and a seller for the exchange of a certain product or service. Price is the only element
in marketing that generates income from the product, while the other factors generate
costs. In fact, every pricing decision is influenced by many factors both internal and
external to the business.

18
 The main bases of pricing are based on factors affecting the pricing of a firm's
products include the firm's goals, market patterns and needs, costs, prices, and
characteristics. competitors’ products, their possible reactions to the firm's pricing
policies, and other environmental factors. Pricing policy is often determined by
previous market positioning. Before setting a price, businesses consider what they
need to achieve with a certain product.

Drury (2013) says that pricing can play an important role in achieving business goals
to varying degrees. The goals often chosen in the valuation are the business wants to
survive, maximize profits, lead market share, lead in product quality, or other goals
such as preventing competitors from entering. enter the market or stabilize the
market. The patterns of the market and demand also have a great influence on the
valuation of the business. Therefore, before valuing a business, it is necessary to find
out what market it is in, how buyers perceive the price and value of its products, and
how the relationship between price and demand is. …

According to Hinterhuber & Liozu 2(012), to decide on a price for a product,

businesses can choose from many pricing methods such as:

Cost-based pricing: Businesses add a standard profit to the cost of the product, which
varies depending on the product category.

Target profit pricing: This pricing method is based on break-even analysis. Under this
method, the producer must consider different prices and estimate the breakeven
output, quantity demanded, and unit profit to determine the feasibility of a target
profit.

Buyer-based pricing: is a method of pricing based on the customer's perception of the

product, not at the cost of the manufacturer.

According to Lee & Jang (2013), Competitive Pricing is identified based entirely on
competitors’ prices and with little attention to costs and market demand.

19
For each product, the enterprise will determine the initial basic price, then will adjust
the price in the process of its production and business, ie building a price structure
that reflects changes in demand and costs according to different segments of the
market, procurement season, order size and other factors. The main price adjustment
strategies commonly applied by businesses include: Pricing and discounting;
Discriminant pricing; Pricing based on geographical principles; Promotion pricing;
Product catalog pricing.

Zysman (2018) shares that businesses actively reduce prices when they want to take
advantage of excess production capacity, protect a declining market share or
dominate the market through lower prices due to larger production volumes. Firms
actively raise prices when there is cost inflation that is not commensurate with
productivity growth, which reduces profit levels and excessively rapid demand.
Commonly used price change measures are post-estimated pricing, adjusted pricing,
reduced discounts, reduced quantity of products, and substitution of raw materials or
formulations. cheaper variable. A business that intends to change prices must pay
attention to the reaction of customers, competitors. In addition, businesses also need
to learn about the intentions, time, scale and extent of price changes that competitors
can initiate to respond flexibly and effectively such as flexible pricing strategies, i.e.
increase or decrease price based on customer reaction, competitor reaction

Place policy

Laketa et al. (2015) explain that a distribution channel is a method through which a
bank delivers products and services to its customers. To do well in the design of the
distribution, it is necessary to understand the customer's expectations about the
prestige level of the service. The attention of customers when using the service will
be different depending on how the distribution channel is selected. Customers will
often focus on service quality when choosing a distribution channel for physical
goods, while for customer care services, customers will evaluate experience when
choosing credit services. Complex services are chosen by customers mainly based on
credibility. In addition, customers also choose distribution channels based on factors
such as cultural, social, personal, and psychological.

20
For banking services, the distribution channel here must ensure a large branch
network, concentrated in big cities, densely populated areas and appropriate
geographical areas (Chiteli, 2013). In countries with developed service activities, the
proportion of customers switching to transactions using modern distribution channels
is increasing while the proportion using branch systems for transactions is decreasing.

Low & Abdul (2013) find that distribution channel is a direct tool to bring the bank's
products to customers. Most banks use branch network to carry out product
distribution. Banking distribution channel is a collection of factors directly involved
in the process of bringing the bank's products to customers, including: organizations,
individuals and means of carrying out activities to bring products to customers. Direct
distribution is mainly derived from the characteristics of the service (invisible, not
stored, not separate), indirect distribution accounts for a very small proportion. The
bank’s distribution system is implemented on a wide, rich and diverse scale: Due to
direct distribution; The scope of banking activities is very wide; Various forms of
distribution; The development of science and technology. In the future, it will be a
combination of traditional and modern channels, but the trend of traditional channels
is narrowing. With the convenience and efficiency of modern distribution channels,
the trend of using this channel will certainly increase strongly in the future.

Palmatier et al. (2015) show that the distribution channel organization system is
divided into 4 types: traditional marketing channels, vertical marketing channels,
horizontal marketing channels (symbiotic marketing), and multi-channel marketing
systems. Enterprises need to pay attention to consider the causes of conflict in the
distribution channel such as conflict of purpose, difference in perception, unclear
roles and powers of channel members, dependence of interests. of intermediaries to
the producer, thereby dealing with various types of vertical conflicts between
different levels in the channel, horizontal conflicts between members in the same
level of the channel, multi-channel conflicts between two or more channels compete
with each other in a producer's market.

21
Lemon & Verhoef (2016) share that distribution channel design requires analyzing
customer needs in terms of service assurance, defining required goals and
requirements, developing and evaluating major channel alternatives, and selecting
distribution channel. Customer analysis aims to find out what products, where, why
they buy and how they buy. Depending on the characteristics of the market, the
characteristics of the product, the size of the business and its competitors, the
business must calculate how many distribution channels it needs and which
distribution channels should be used, the number of distributors, and the number of
distributors. Intermediaries are required at each level accordingly, and at the same
time, conditions and responsibilities of members in the distribution channel must be
clearly defined. Lemon & Verhoef (2016) suggest that enterprises can choose one of
the following forms of distribution: Exclusive distribution policy; Selective
distribution policy; Wide distribution policy. After having built a number of
distribution channel options, businesses will choose a distribution channel that best
meets their long-term goals. Each distribution channel should be evaluated against
economic, controllable and adaptive criteria. The evaluation of the effectiveness of
the distribution channel is selected based on the degree of achievement of the
distribution target of each channel form. After selecting a distribution channel, there
must be a policy to stimulate members of the distribution channel.

In short, distribution channel is a direct tool to bring the bank's products to customers.
Characteristics of distribution channels: Direct distribution is predominant; The
bank's distribution system is wide, rich and diverse. Classification of distribution
channels for banking products: Traditional distribution channels (branches,
correspondent banks) and modern distribution channels. Building a suitable
distribution strategy to bring the bank’s products to customers in the best way, so it
will be an important condition to promote the highest effectiveness of the product and
price strategy.

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 Promotion policy

Jenkin et al. (2014), there are usually five promotion tools. First, advertising is one of
the 5 main tools to direct persuasive information to buyers and the public, the goal is
to stimulate service use. It is an effective way to reach many geographically dispersed
buyers at a low cost of a single exposure. When using this tool, businesses need to
pay attention to a number of content such as: Objectives of advertising; Advertising
budget; The message of the advertisement; And advertising media. Second,
promotion includes tools to stimulate customers, stimulate trade and stimulate sales
staff. Promotional tools generate stronger and faster responses, but are often short-
lived, with no lasting effect on brand preference. Promotional forms such as free
samples, coupons, buy-and-go coupons, free trials, promotions, customer
conferences, trade shows, etc.

Third, it is Direct selling, the main content is building strategic goals, structure, size
and policies to encourage sales force. Direct selling is a highly effective tool in the
buyer training, negotiation, and business transaction stages. The effectiveness of sales
management depends to a large extent on recruiting and selecting, training, guiding,
stimulating, and evaluating sales representatives for honesty, understanding, and
attitudes. Fourth, it is Public relations. there are 5 basic activities: press relations,
product propaganda, communication, lobbying, advising the leadership on issues
related to the public about location, image of the business. Public relations marketing
department, in addition to propaganda, is also responsible for introducing new
products and redefining the position of that mature product, creating interest in the
product and building the image of the business.
At last, Direct marketing is an interactive marketing system that uses one or more
advertising media to influence a response or transaction at any location with a
customer. Direct marketing uses direct response advertising media to sell goods in
common forms such as catalogs, direct mail, direct response on television, radio,
newspapers and magazines. Direct marketing is about getting potential customers to
buy the product right away, and more importantly, to make a difference to and
purchase intention later.
Lim (2016) adds that objectives of promotion help the banks to achieve the purpose

23
of disseminating information, positioning products and supporting individual credits.
To do so, it is necessary to know the psychology of the person being communicated,
that is, to understand their perception and perception of their behavior. As we all
know, the marketing war is actually a fierce battle taking place in the mind of the
customer. Marketers always want to inculcate something in consumers' minds to
change their attitudes and motivate them to take action.
Design the message play an important role in promotion. After determining the
buyer’s response, it is necessary to design an effective message, that is, to attract
attention, create interest, arouse desire and motivate. push action. The content of the
message must relate to the buyer's own interests, the business's products bring what
the buyers expect; quality, utility, economy, value or other distinctive features of the
product. The message structure must be lively to attract attention, interest and easily
persuade buyers. Smith et al. (2018) find that factors affecting the structure of the
company's promotion system include product market type, push and pull strategy,
buyer readiness stage, product life cycle stages, upper tier enterprise market.

24
 CHAPTER 2:
ANALYSIS AND ASSESSMENT OF MARKETING ACTIVITIES FOR
CREDIT PRODUCTS AT SCB HANOI

2.1. OVERVIEW OF SCB HANOI

2.1.1. History of development

On December 7, 1995, SCB Hanoi Branch was established and is a customer

transaction office at 60A Nguyen Chi Thanh, Lang Thuong, Dong Da, Hanoi.

On 11/08/2004, SCB Hanoi Branch is a level II branch directly under SCB Hanoi.

In September 2007, SCB Hanoi opened 2 transaction offices, which are transaction
offices. In January 2009, SCB Hanoi opened the third transaction office (SCB, 2018).

SCB is one of the most versatile and powerful banks in the joint-stock commercial
banking sector in Vietnam. Up to now, SCB has built a wide distribution network
across most of the provinces and cities in the country, at the same time. established
agency relationship with many banks and bank branches in the world. In addition to
effective business development, SCB also strives to renew its brand image, in order
to affirm its position and reach the goal of becoming big in Vietnam. Saigon Bank
has a total of 37 branches and transaction offices located in 10 districts of Hanoi City.
Branches and transaction offices are mainly located in Dong Da District, Hoan Kiem
District, Cau Giay District, Hai Ba Trung District, Ba Dinh District, .. (SCB, 2022)

Transaction name: SCB Hanoi Branch

Address: 214, Thai Ha, Trung Liet Dong Da, Hanoi

Phone number: 024 3775 6707

Fax: 024 6273 2973

2.1.2. Functions, tasks and operational goals

After nearly 10 years of consolidation and restructuring, SCB achieved the leading
growth rate of total assets and is transforming its business model towards a multi-
functional, modern and sustainable bank; customer centered. SCB has also built an

25
effective and diversified customer base with more than 1.2 million individual
customers, of which high-end customers account for a large proportion (SCB, 2022).

Main tasks of SCB Hanoi include:

Capital mobilization activities: Receiving demand deposits, term deposits, savings

deposits and other types of deposits, issuing certificates of deposit, promissory notes
to mobilize capital at home and abroad. Borrowing capital from the State Bank in the
form of refinancing according to the provisions of the Law on the State Bank of
Vietnam, borrowing capital from credit institutions and financial institutions.

Lending and guarantee activities: Lending to individuals or organizations to meet

capital needs for the economy such as: Consumer loans for life: Buying a house,
repairing houses, buying household items, buying cars, loans to study abroad, loans to
employees; Loans for production and business in the industries permitted by law.

Loan factoring and guarantee operations

Besides providing full financial solutions to meet all needs of customers, SCB is
proud to bring value and ensure practical benefits to Partners and Shareholders; as
well as building the best welfare regime and working environment for employees.
SCB’s service activities have grown steadily in recent years, reflecting the
restructuring strategy with the goal of gradually reducing dependence on traditional
credit activities. In the personal financial services provided to customers, SCB made a
big impression on the market with the strong growth of payment activities through
the international card ecosystem, e-banking and bancassurance.

Vision: Create sustainable values for customers and organizations, contribute to the
construction and development of society.

Mission: Become a reliable partner by always providing financial solutions and

optimal service quality for Customers; Create a dynamic, dedicated working
environment and focus on human resource development; Bring sustainable benefits
and value to shareholders.

26
Core Values

Customer is the focus: SCB always takes the interests and satisfaction of customers
as the focus in all activities.

Innovation and Creativity: SCB continuously improves, diversify products and

services, applies modern technology to bring optimal solutions to customers.

Human resource development: SCB takes the development of human resources,

investing in people as the foundation for the sustainable development of the
organization.

Commitment to benefits: SCB always acts and commits to bring long-term and
sustainable benefits to customers, shareholders, employees and contribute to the
development of the community.

Cooperation for mutual development: SCB acts in the spirit of cooperation to develop
together.

2.1.3. Organizational structure

Over the years of development and innovation, SCB Hanoi has taken steps to grow
stronger and more complete in terms of business operations and organizational
structure. This link cannot be separated, once the management apparatus works well,
it will contribute significantly to improving the business efficiency of the branch. The
organizational structure of the branch apparatus is gradually improving in the
direction of specialization in order to better serve the needs of customers. Up to now,
the Branch has a total staff of 112 people: in which, the number of personnel in the
main branch is 71 people and 2 IT staff at the head office, 13 people at Transaction
Offices, No. 2. is 9 people and transaction number 3 is 8 people, transaction number 4
is 9 people (SCB, 2022).

27
 :Online relations

: Functional relations

Director

As the top leader, directly managing and responsible for all work of the Branch
performed by all levels in the organization, he will be the main responsible person for
SCB’s headquarters for the operation situation. as well as branch business.

Vice directors

Support the Director to implement and operate the goals and tasks assigned by the
superior. The Deputy Director is the person responsible for urging and supervising
the work in the departments.

Science and Technology Credit Department

Perform operations such as settling loan contracts, mortgaging properties, reviewing

loan conditions, recording interest payments, periodically paying principal of
borrowers, making payments debt … to individual customers.

28
 Corporate Credit Department

Perform operations for granting credit to corporate customers.

Accounting department

Record and monitor the financial position of the Branch. Mobilizing capital through
the form of receiving deposits and issuing promissory notes, bonds, certificates of
deposit, etc. to advise the branch director on the branch's financial management.

Administrative Treasury Department

Manage and be in charge of administrative issues of the Branch, manage and perform
the functions of cash receipts and payments, foreign currencies, gold, promissory
notes, bills, bonds, and valuable documents. providing services of collection and
expenditure, household counting and asset management.

Transaction

Transaction Office is four units under SCB Hanoi, performing business functions of
the bank such as lending, deposit collection and other services within the scope of
authorization of the Branch Director.

The operational structure of SCB - Hung Vuong branch is simple, effective in

communicating information between levels and departments, and quickly solving
problems. Depending on the nature of branch operations, departments will have
different recruitment modes to ensure the best service for their customers.

2.2. CREDIT SUPPLY SITUATION AT SCB HANOI

Through the analysis of the branch's credit expansion, we find that the branch has
achieved some very encouraging successes. However, in parallel with those
successes, the Branch still has many limitations.

2.2.1. Achievement

Over the past years, due to closely following the direction of the City Agricultural
Bank, the Party Committee, authorities at all levels in the area, along with the
dynamism and creativity of the Bank’s staff, we have made great efforts to to ensure
the stability, development and efficiency of the branch’s business operations.

29
Over the years the branch has achieved remarkable results.

In the period from 2018 to 2020, personal credit balance increased gradually over the
years, specifically: Personal credit balance in 2019 increased by VND 200 billion
compared to 2018 (up 20.79%), in 2020, an increase of VND 363 billion compared to
2019 (an increase of 31.24%). During this period, SCB Hanoi made flexible decisions
in providing personal credit packages with preferential interest rates, focusing on
priority areas according to the headquarters of the headquarters, so that the loan
balance Personal use increased sharply.

Table 2.1. Credit balance for the period of 2018-2020 (billions dong)

Target/year 2018 2019 2020

Personal 962 1162 1525

Enterprise 321 364 365

Total 1283 1526 1890

Personal/Total 75.98% 76.14% 80.68%

Source: Risk control department

Loan sales and outstanding loans of the Branch in recent years have had many
positive changes. Among the total outstanding loans for this type of enterprise, the
balance of medium and long-term loans also increased in quantity as well as in size
and structure. This can be considered as the Branch’s progress because medium- and
long-term loans are risky, but the difference in interest rates for the bank will be
much larger than short-term loans if the Branch has a policy to medium and long-
term loans are associated with effective capital management measures.

Short -term loan balance in this period accounts for a higher proportion than medium
and long -term. It shows that this bank's branch is focusing heavily on short -term
loan products, fast rotation, low risk and reducing bank loan expenses. Grasping these
advantages, the bank produces more short -term products to be able to meet the needs
of customers. Officers use marketing tools to attract more customers.

30
For example, marketing in the area and localities, with simple and fast procedures,
the form of repayment is also diverse, so the number of customers of the loan also
increases.

Medium and long -term loans tend to be in this period. Specifically, in 2019, the
balance of medium and long -term loans reached VND 647 million, equivalent to
11.11% compared to 2018. In 2020, the loan has to increase by 20.20% compared to
2019.

Table 2.2. Den loans for time limit for the period of 2018-2020 (millions dong)

Year Gap 2019/2020 Gap 2019/2020

Target
2018 2019 2020 Money % Money %

Short-term 701 879 1112 178 25.44 233 26.54

Medium and
582 647 778 65 11.11 131 20.20
long term

Total 1283 1526 1890 243 18.93 364 23.85

Source: Risk control department

On the other hand, as of December 31, 2021 in the total mobilized capital, the
proportion of medium and long-term capital accounts for a relatively high proportion,
which can be considered as an advantage to help the Branch meet the needs of
customers. customer loans. This source of capital can help the branch develop in
medium and long-term lending to businesses, improving the situation that short-term
loans account for a large proportion.

Although businesses still face many difficulties when borrowing from banks, the
psychological side of banks for businesses to borrow loans is afraid of facing risks.
However, by making efforts to find customers who are eligible for loans and have
development potential, the Branch also offers many measures to support businesses in
accessing medium and long-term capital. This helps the Branch to partially solve the
medium and long-term capital needs of businesses.

31
This activity not only brings an important source of profit but also creates a long-term
trust relationship between businesses and banks, expanding banking services to
increase income for the Branch as well as increase convenience for customers.

Branches on the one hand maintain a sustainable relationship with traditional

customers, on the other hand, target new customers and offer incentives to corporate
customers. That partly makes the branch’s loan balance and medium and long-term
loan sales constantly increase.

In terms of credit quality of the branch’s loans in recent years, it can be seen that the
credit quality of the loans is good, the bad debt ratio is only about 0.7%. This shows
that despite the difficult economic situation in recent years, the branch has made great
efforts in risk management, tightening regulations on appraisal, strengthening
inspection and controlling the use of loans as well as urge debt recovery.

In terms of loan efficiency, commercial banks' operations are carried out on the
principle of safety and profitability. Banks lend money to customers, they believe that
in the future they will receive the difference from interest. However, in the loan
approval process, due to the risky nature of these loans, banks often strictly adhere to
the lending principle. Moreover, in the process of disbursing and using capital, banks
must regularly monitor whether loans are used effectively or not. By doing so, the
bank will be able to recover capital and interest on time.

SCB’s medium and long-term loans are also for the purpose of seeking greater
interest from medium and long-term loans for short-term loans. Although the balance
of medium and long-term loans accounted for a small proportion, it also brought
economic benefits to the branch. Medium and long-term loans contribute a part to the
Branch’s profits, serve as a basis for the bank to develop modern business services
that contribute to increasing the Branch's competitiveness. Besides, it must also be
mentioned that the Branch has been active in diversifying loans. Outstanding loans
are also concentrated in two economic sectors: trade-service and processing industry.

32
2.2.2. Limited and causes

Besides the achievements in lending, the Branch still has many limitations. Some
limitations can be mentioned such as:

Unsatisfactory credit scale: The number of corporate and individual customers having
credit relations with the branch in 2020 and 2021 increased compared to 2019 but
slowly increased. although there have been many priority policies of the Branch for
different types of customers. That represents a slow growth rate and is not
commensurate with the branch’s priority policies in the past time as well as the
number of corporate and individual customers in the district.

Loan balance on mobilized capital is still low, lending work is not commensurate
with mobilization, Branch has not effectively exploited mobilized capital, leading to
the bank having to transfer excess mobilized capital to for branches as well as other
commercial banks.

For corporate customers, the loan balance and turnover of medium and long-term
loans are still low compared to the total loan balance. The branch only focuses on
certain economic sectors as well as certain businesses, so when there is a fluctuation
such as the product market of that economic industry declines or the financial
situation of the enterprise can If the branch shows signs of weakness, the branch will
be at risk.

From 2019 to now, the Branch has launched many preferential credit programs with
interest rates, providing suitable products such as: Preferential interest rates for good
customers, preferential interest rates for import and export. However, the outstanding
loans of products accounted for a small proportion of the total outstanding loans. That
proves that the bank cannot take advantage of that product to increase the credit scale.

Labor productivity of credit officers and employees is not high. Besides the achieved
results, the credit activities of banks still have many limitations. In order to expand
credit activities, it is necessary to analyze the causes of the limitations and then
propose solutions to expand credit activities at the branch.

33
The above limitations of the Branch are caused by many different reasons that can
divide it into three groups of causes: Customer-side, Bank-side and macroeconomic
environment-related causes as follows:

The cause belongs to the customer. Firstly, enterprises lack collateral and counterpart
capital. Second, the financial efficiency of the project is not high.

The cause belongs to the branch: Poor digital marketing policy, the branch's credit
officer has not really looked for customers. Although the physical facilities have met
the customer's psychology, they have not yet made an impression on customers. The
staff has low professional qualifications and is not really enthusiastic in their work,
especially in finding customers.

The reason belongs to the macroeconomic environment.

In the last three years, the economy has shown signs of weakness, leading to a decline
in business activities of enterprises, reducing the need for loans. Although the Party
and State have many guidelines and policies to encourage and support businesses and
individuals, the actual implementation is still limited and has not yet created the
necessary legal framework for businesses to access to bank capital. Legal issues on
mortgage and guarantee of land use rights still have many cumbersome procedures
that make it difficult for businesses to get loans. The activities of enterprises have not
been regularly inspected by State authorities, so illegal business, forging documents,
fraud, tax evasion ... still exist, causing loss of trust for commercial banks. The socio-
professional organizations of enterprises are small in number, operate inefficiently,
and fail to meet their function as a bridge between businesses and the bank.

In addition to the above reasons, there are also some basic reasons leading to
limitations in credit activities of the branch such as: The network of joint stock
commercial banks in Hanoi is very large, with fierce competition. The Branch needs
to make more efforts in preferential policies to be able to compete with big banks in
the district.

34
Thus, in the past few years, although still facing many difficulties due to the influence
of socio-economic situation in our country and in the world. But the Bank’s business
results in recent years have achieved very encouraging achievements. Total mobilized
capital has increased sharply over the years, and sales for other activities have also
increased in both quantity and quality.

2.3. ANALYSIS AND EVALUATION OF MARKETING CREDIT

ACTIVITIES AT SCB HANOI

2.3.1. Product

Understanding the diverse needs of customers as well as local competitors offering

similar products in recent years, SCB Hanoi has applied a diversified and flexible
product policy. The branch’s products range from traditional to modern. Currently,
the Head Office offers many different deposit products, but the branch only applies
products that are suitable for local customers' conditions. Products are divided into
three groups: product group for agricultural purposes, business goals and product
group for consumer purposes:

About agricultural purposes: This is a high proportion of the total science and
technology loan. Therefore, the trend of agricultural loans is like the trend of
increasing lending sales. Due to the favorable natural conditions for operating in fruit
trees with high economic value such as durian, jackfruit .... raising fish, raising
pigs, ... Business width causes loan demand to increase this causing the outstanding
balance to increase each year. The growth rate over the years tends to decrease due to
a part of the loans of the previous years of mathematics, although the loan sales still
increased sharply over the years.

Regarding business goals: Besides the demand for agricultural loans, this bank
focuses on business loans. Therefore, business loans increased sharply during this
period because during this time, the business is convenient, so most people expand
their business scale, as well as many carpentry granaries quickly due to the local.
There is a large amount of fruit supply, so the fruit bowls have also been established
and in addition to the area has also attracted investors from other places to invest. It
has also contributed to causing the business balance to grow strongly.

35
Regarding consumer purposes: Consumer loan balance in this period also tends to
increase slightly. Consumer loans mostly borrow houses, build houses, repair houses,
buy machinery and equipment, etc. People 'shopping decreases and plus the loan due
to maths continues to reduce the outstanding loans.

Table 2.3. Customer's outstanding loans for capital use purposesfor the period of
2018-2020 (millions dong)

Year Gap 2019/2020 Gap 2019/2020

Target
2018 2019 2020 Money % Money %

Agriculture 468 558 683 90 19.23 125 22.40

Business 418 543 741 125 29.90 198 36.46

Consumption 397 425 465 28 7.05 40 9.41

Total 1283 1526 1890 243 18.94 364 23.85

Source: Risk control department

On the other hand, it’s also divided into two groups: Group secured loans and
unsecured loans

Secured loans: The bank always focuses on lending customers with collaterals so the
outstanding loans for collaterals are always higher than unsecured loans to bind the
obligation to pay the loan on time as well as reduce the risk to the bank. Therefore,
mortgage loans always account for a high proportion compared to unsecured loans.
Specifically, in 2017 accounted for 81%, in 2018 accounted for 82%and in 2019 was
82.50%. For loans, the loan balance has always increased over the years, mainly due
to the increase in loan sales of the bank.

36
Unsecured loans: The loan balance has no stable collateral, not increasing, accounting
for only a small proportion of the total outstanding loans. Specifically, in 2017
accounted for 19%, in 2018 accounted for 18% and in 2019 accounted for 17.5% due
to failure to mortgage with the borrower's collaterals, the bank also limits the loan, so
it only accounts for a small proportion of the total outstanding loans.

Table 2.4. Outstanding loans in the form of guarantee for the period of 2018-2020
(millions dong)

Year Gap 2019/2020 Gap 2019/2020

Target
2018 2019 2020 Money % Money %

Secured loans 1039 1251 1559 212 20.41 308 24.61

Unsecured loans 244 275 331 31 12.68 56 20.41

Total 1283 1526 1890 243 18.94 364 23.85

Source: Risk control department

Basically, there are two main types of secured loans and unsecured loans. With the
above two basic types of loans, there are specialized product packages such as: Short
Term Personal Loans; Fast Cash Advance Loan; Military Payday Loan; No Credit
Person loans, Christian Lending Personal Loans; Secured Signature Loans; Personal
Signature Loans... Personal credit product packages are designed specifically for each
customer, meeting the maximum needs of customers in each situation and specific
conditions.

2.3.2. Price

The prices of banking products and services are expressed in the form of interest and
fees (Vyas & Raitani, 2014). Therefore, price is a mixed economic category related to
many other economic categories. Pricing is an important part of a bank’s marketing
mix strategy, which not only directly affects marketing activities, but also affects the
bank's operations and income.

37
When formulating a pricing strategy, banks usually have to base themselves on the
following bases: The cost of resources that the bank has to spend to maintain
operations and provide products and services to customers; Characteristics of
customer demand: different groups of customers react differently to price changes;
Price of competitors in the market, price is a factor that greatly affects the
competitiveness of the bank. The prices of credit service are the fees rate attached
credit issuing process, plus interest rate, plus marketing cots. These are the costs that
customers have to spend to use bank’s products.

The Branch’s credit service are applied flexible interest rate in accordance with the
market situation on the basis of strict compliance with the regulations of the State
Bank from time to time; The units at the Head Office have closely coordinated with
the Branch during the period of strong fluctuations in interest rates, the reporting of
deposit interest rate movements in the area was seriously implemented by the Branch,
so that many interest rates for deposits or loans at branches are competitive. SCB
Hanoi advocates not to use price as the main competitive tool to increase
competitiveness, so it always complies with the regulations of the State Bank.
Meanwhile, for some joint stock commercial banks in the area, due to difficulties in
capital, they tend to find ways to exceed the ceiling prescribed by the State Bank,
increase deposit interest rates, and reduce loan interest rate to attract customers from
other banks, in which the Branch is one of the targets that other banks target.

Moreover, due to the characteristics of individual customers being large in number

and widely dispersed, maintaining and developing personal credit will be costly for
the following tasks: Expanding the network, advertising and marketing system to
facilitate access to individual customers in each locality and area; Develop adequate
personnel to serve customers quickly and accurately from the stage of application
receipt, appraisal to loan decision, disbursement and debt collection; Related
expenses such as: management costs, stationery, electricity, water, telephone,
business trip expenses to support credit officers... Thus, price for credit service in
SCB Hanoi is not very completive comparing to others banks.

38
Personal lending interest rates at SCB apply according to two mechanisms: frame
interest rates and preferential loan interest rates

For short -term loans (≤ 12 months): according to the interest rate being applied at
Time of receiving loans and fixed loans during the loan period, for medium and long
-term loans (> 12 months): According to the interest rate applied at the time of
receiving the loan debt and is adjusted When there is a change in interest rate of SCB.
For each different term, the corresponding interest rate level will be specified. The
branch will comply with the regulations to apply lending interest rates to customers.

Mechanism of preferential loan interest rates: Borrowers are entitled to preferential

interest rates according to the product package that the initial customer consultant.
Specifically, in 2020, the Department of Policy & Development of SCB products has
launched interest rate incentive programs applicable to individual customers to
borrow as follows: The object is preferential interest rate: Customer Loans for life,
business production. Content of interest rate incentive program

Fixed (I) 2 years; (ii) 3 years; (iii) 5 years from the time of first disbursement. After
the time of applying the defined interest rate: Lending interest rate = VND 24 -month
deposit interest rate after SCB plus (+) 3.5%/year but not lower than the loan of the
same term of the product Bank's newspaper at that time.

Fix a preferential interest rate within the first 12 months (for a loan of over 24
months), or in the first 6 months (for a loan of less than 24 months) from the time of
first disbursement Tien. After the time of applying fixed interest rates: Lending
interest rates - VND 24 months of deposit mobilization interest rate of Sacombank
plus (4) 3.5% year but not lower than the product of the same term of the product by
the product The notice of SCB at that time.

2.3.3. Place

SCB Hanoi's product distribution channel consists of two basic channels: direct
distribution channel and modern distribution channel. Direct distribution channels
include Branch office and network of four transaction offices distributed in Dong Da
District and Transaction Office No. 1, Transaction Office No. 2, Transaction Office

39
No. 3, Transaction Office No. 4. The branch’s business network is constantly
growing. in the past time in order to better meet the needs of customers in using the
service and make the most of the areas assessed as potential. The head office of the
Branch and the transaction offices are located on the main roads of the city, the
central area, where densely populated, convenient transportation. However, the
facilities between the transaction offices are not uniform, many transaction offices are
still renting and have a rather narrow space, located in a hidden location, which is not
convenient in dealing with customers.

Transaction
Level 1
No. Tên đơn vị
branch
Level 1 Level 2 Level 3 Level 4

1 SCB Hanoi 1 - 3 3 3

2 Agribank Hanoi 1 1 4 4 5

3 Vietcombank Hanoi 1 - 3 1 2

4 Vietinbank Hanoi 1 - 3 2 2

5 SHB Hanoi 1 - 2 1 1

6 ACB Hanoi 1 - 1 - 1

Table 2.5. Comparison of direct distribution channels of banks in 2021

((Source: SCB, 2022)

Compared with commercial banks in the area, SCB Hanoi is classified as one of the
branches with a relatively large number of transaction offices, only among joint-stock
commercial banks, SCB Hanoi is only behind Agribank Hanoi.

40
This is an advantage for the Branch to be able to access and provide services to
customers more easily. However, with the general development trend, it can be seen
that Hanoi industry has much more potential for development. The ever-increasing
speed of urbanization will be an opportunity for SCB Hanoi to build a safe, strong
and effective banking network. Currently, the modern distribution channel at the
branch includes 27 ATMs and 134 card acceptance points, 148 POS machines, step
by step perfecting the multi-function operation model towards serving all economic
sectors and residents (SCB, 2022). The above indirect systems help customers to
access banking products and services many times simpler, faster and more convenient
than traditional methods.

However, the application of the above products and services requires customers to
have skills and understanding of these applications to a certain extent. It is quite a
difficult thing for traditional customers and the fact that these products work is not
effective, accounting for a very low proportion. With the current number of direct
distribution channels, it is still quite small compared to the size of a level I branch and
many potential locations, but the branch does not have a transaction office. Therefore,
in the coming time, the Branch needs to continue to develop the network of
transaction offices in these areas, and at the same time promote electronic distribution
channels.

2.3.4. Promotion

The most common form that most banks use in promotional activities is advertising.
SCB has regular advertising programs on television channels, as a form of reminding
customers about the bank. SCB also uses many other forms of advertising for each
new deposit product introduction to the market or promotions during the year on
mass media such as advertising on the website www.SCB.com.vn , Tuoi Tre
newspaper, Banking Times with quite detailed content. In addition, SCB often
uploads pictures of awarding prizes of savings programs on the Ebank page of
Vnexpress.net online newspaper. SCB Hanoi inherits the SCB brand, so it also
benefits from these advertising programs. The branch mainly focuses on propaganda
through banners, posters, brochures located at the head office and transaction offices.

41
In addition, inside and outside the head office and transaction offices, there are
always electronic boards announcing the update of deposit interest rates of specific
deposit products for customers to grasp and better understand the deposit policy.
deposits at SCB Hanoi.

SCB Hanoi has organized many promotions implemented by the Head Office such as:
Loc Xuan Savings, Savings for "Luck and Joy", ... bringing many added values to
customers. In addition, the Branch regularly has promotions and gratitude programs
for customers with frequent transactions or large deposit balances at the Branch such
as gifts and chances of winning lottery; publish publications, calendars, gifts for
customers through holidays and New Year such as: International Women's Day
March 8, National Day September 2, New Year, Lunar New Year, Chi anniversaries
branches…especially, the Branch often puts out souvenirs with the logo of “SCB
Hanoi” both to give to customers and to help the Branch promote its brand. Not only
focusing on business, the Branch also pays special attention to social security work
and considers this as the responsibility of the business to the community. Every year,
SCB Hanoi participates in sponsoring funds for the poor and studious children;
awarded scholarships to poor students, built houses of gratitude for Vietnamese
Heroic Mothers; In addition, in recent years, SCB Hanoi's event sponsorship has been
focused and carried out quite often such as Hanoi Flower Festival, Food Festival... by
these practical actions, the Branch has left a good impression in the hearts of
customers about a strong, close, enthusiastic and professional bank.

In addition, SCB Hanoi has a flexible customer policy depending on each customer.
For new customers who use the product regularly, in addition to participating in lucky
draw programs or lucky scratch cards, customers are also given gifts on birthdays and
major holidays of the year... Customer care is highly effective, starting from 2020, at
the beginning of each year, the General Team makes a customer care plan for the year
on the basis of studying customer needs and comments from the staff. employees who
are in direct contact with customers. At the end of the year, the General Group will
organize surveys to collect customer's evaluations of customer care programs so that
they can improve the quality of these programs in a way that is more suitable for
customers. customers in the following year.

42
However, Advertising activities on mass media such as Hanoi newspapers and
television have not been invested by the Branch. Every year, only on the occasion of
the Lunar New Year, or a big propaganda campaign for a product or a big promotion,
does the branch advertise on local newspapers and television stations. The content of
these advertisements is designed to be attractive, but the frequency of broadcasts is
not much, the repetition level on newspaper pages is quite low, so the effectiveness of
these advertisements is not high. It can be seen that communication activities at the
branch have achieved certain successes, thereby gradually bringing products to
customers. However, the effectiveness of this activity is not high, the communication
channels are not diversified, the branch's advertising on television channels is low,
the advertising content has not made a deep impression, and it is not conducted.
regularly, continuously and sustainably for a long time. The disjointed, undirected
and in-depth communication process leads to long-term inefficiencies. Most
communication activities are carried out through programs and events under the
direction of the Head Office. The branch itself has not focused on implementing its
own communication activities in the area. Compared with commercial banks in the
same area, communication activities are small-scale, spreading efficiency is not high,
and have not made a strong impression on customers. Since then, the promotion of
consumer products is still limited, specially, the brand’s digital marketing is poor.

2.3.5. People

People are an important and decisive factor in this marketing activity and any bank
employee can participate in the service creation process. People play the most
important role in Marketing and contribute significantly to the process of creating
services and making recommendations for customers. The key point in order to
reduce costs for customers and create a competitive advantage, SCB must pay special
attention to resources, because human resources are the key in all activities of the
bank.

43
For customer service, it plays an increasingly important role in customers’ decisions
to use services, so banks need to constantly improve service quality and bring
customers more value. than. In the increasingly fierce competition, the service not
only needs to be well implemented according to the bank's commitment to customers,
but more importantly, it also needs to show its superiority over competitors in the
industry. Therefore, over the years, SCB Hanoi has taken the policy of improving
customer service as the focus for its development. Taking service quality as the main
competitive advantage instead of our interest rates. Strictly comply with the
regulations of the Head Office on service quality standards of Tellers such as: Dress
of Tellers; working area; perform mission; compliance with working time; customer
service attitude and style; dealing with customer inquiries and complaints;
professional quality. Monthly and quarterly, the Branch's People's Inspection Team
conducts periodical and irregular inspection of all departments under the Branch on
the basis of independent assessment. This is one of the annual evaluation criteria of
the Branch's departments in business activities in general and deposit mobilization
activities in particular. Since the implementation of the above standards, the quality
of customer service of the Branch has improved markedly in the direction of
becoming more and more perfect, contributing to changing customers' perception of
SCB Ha’s services.

However, the staff's professional skills are not synchronized, the new employees lack
experience and knowledge in credit appraisal and granting, leading to many risks and
troubles for customers. Thus, SCB also needs more professional training programs
and customer care skills to improve customer service quality.

2.3.6. The process of providing products and services

Service delivery process is a set of procedures, work sequences, operating

mechanisms and practices commonly used in providing products and services to a
bank's customers. Although people play an essential role in the service delivery
process, if this process is not right, no matter how professional and hardworking the
staff is, it cannot achieve customer satisfaction.

44
 Because the operating process has been set by the bank from the beginning and
requires all transactions to be followed, it cannot be changed, it is fixed. If the bank
wants to improve the quality of banking services, the first thing they need to find is a
reasonable method to change the initial operating process of the bank to achieve the
best effect. The credit process of banks is often aimed at minimizing customer
involvement in the product supply process, simplifying procedures, saving time and
increasing consensus. good and satisfied customers. Therefore, in order for the bank’s
services to be prioritized and appreciated by customers, it is necessary to ensure that
the steps in the process are completed correctly and most perfectly, along with the
solution to the problem. The resolution of events occurring during the implementation
process must be professional, quick and effective.

In the work of investigating and preparing loan application documents at the branch,
it has strictly complied with the regulations promulgated by the competent
authorities. On the other hand, has reviewed and approved loan projects quickly,
disbursed on schedule, collected interest as committed as well as according to actual
circumstances. However, process is complicated and take the staff and customers a
lot of time. Moreover, the process is still done with a lot of paper and lacks
simplification by technology.

2.3.7. Physical evidence

The branch's business network has been constantly developing in recent years in
order to better meet the needs of customers in using the service and making the most
of the areas that are assessed as potential. The head office of the Branch and the
transaction offices are located on the main roads of the city, the central area, where
densely populated, convenient transportation. In general, with the area where the
Hanoi branch is a relative locality, the economic scale is not too large while the
network of transaction offices of commercial banks concentrated here is quite
crowded and dense has created fierce competition in the provision of banking
services. However, the facilities between the transaction offices are not uniform,
many transaction offices are still renting and have a rather narrow space, located in a
hidden location, which is not convenient in dealing with customers.

45
2.4. EVALUATION OF PROS AND CONS.

2.4.1. Advantages

It can be said that the marketing work to promote individual credits at SCB Bank -
Hanoi Branch in recent years has achieved encouraging results, contributing to the
system affirming its position as a one of the leading banks in Vietnam.

The bank's brand and reputation is increasingly affirmed in the market, gradually
ingrained in customers' minds as a reliable transaction address.

Products of SCB Hanoi branch are diverse in terms of methods as well as quality,
with many utilities to meet the increasing needs of customers.

The system of transaction offices is widely arranged; the automatic transaction

network continues to be expanded for convenience of customers' transactions.

Promotion and communication activities have been well done by the branch for many
years, thereby bringing the image of the bank closer to customers, increasing the
bank's reputation.

All employees of the branch have professional knowledge and skills to meet the
needs of the job.

The business process is strict, clear, streamlined in the direction of becoming more
and more professional and reasonable.

Facilities for retail banking activities are equipped with modern and professional
equipment to help the branch effectively develop deposit mobilization.

2.4.2. Limited and causes

First, Credit is a very important activity in every bank because it both accounts for a
large proportion as well as brings in income for banks, besides, the risk to this
activity is not small. Therefore, credit work is always considered by the branch as a
spearhead and a top task in business activities. The branch's credit activities are
gradually expanding and developing, however, the expansion level is not
commensurate with the mobilized capital of the Bank.

46
In addition, market segmentation and target market selection have not been done in a
specific and clear manner. The branch has not conducted a survey of customer
deposit information in the area, so it has not yet grasped specific information about
the potential, needs and tastes of customers to serve as a basis for decisions on
marketing. Branch products.

Second, price policies for credit is not competitive. Price policies to support service
used, especially products related to payment in the covid19 and post-covid19 period,
are not really different. Hence, it is less attractive for customers to choose products of
branches instead of other banks.

Third, the credit services offered to customers by SCB Bank - Hanoi Branch are
diverse but have not made a difference compared to other banks in the area and are
still heavy on tradition, so in the process of implementing standards Marketing some
products do not attract customers, so the effectiveness is not high.

Fourth, the number of transaction offices has not met the needs of the market,
especially on the busy road in Hanoi. Modern distribution channels have been
expanded but have not been effectively exploited.

Fifth, communication channels are not diversified, the branch's advertising on

television channels is low frequency, advertising content has not made a deep
impression, is not conducted regularly, continuously and maintained for long time.

47
 CHAPTER 3:
MARKETING SOLUTIONS TO PROMOTE INDIVIDUAL
CREDITS AT SCB HANOI

3.1. ORIENTATION FOR PERSONAL CREDIT DEVELOPMENT AT SCB

Credit development is critical for banks because it not only allows them to increase
capital to satisfy the demands of economic development and enhance people's living
standards, but it also determines their continued existence. Any bank seeks to
discover methods to create credit in order to expand and improve itself.

For individual customers: Focus on growing clients with high and moderate income,
such as high-income customers such as leaders, entrepreneurs, and managers...
Customers with an average or higher income and steady employment are grouped
together: public servants, officials, and employees at agencies, state businesses, major
firms, and foreign-invested enterprises.

Provide consumers with a diverse, multi-utility credit product range that is tailored to
their needs. Improve the quality and ease of traditional credit products by
streamlining company operations, simplifying transaction procedures, and being nice
to clients. Providing current goods: keeping up with customers' growing requirements
and evolving swiftly on the basis of modern technology to provide clients a
comprehensive range of personal financial products and services. Develop a diverse
and comprehensive product line to fulfill the demands of all clients. However, there is
the option of concentrating on the development of a number of strategic goods such
as real estate loans, business loans for fortune, unsecured loans, vehicle loans, and so
on.

48
3.2. MARKETING SOLUTIONS TO INCREASE CREDIT SUPPLY TO
INDIVIDUAL CUSTOMERS.

3.2.1 For traditional distribution channels:

The Branch must assess the regions where SCB Hanoi's Transaction Offices are
necessary throughout the area in order to promote network growth. Study the
economic, social, and consumer features in each location where the Branch wants to
create Transaction offices, and open at least three additional transaction offices by the
end of the year, bringing the branch's total number of transaction offices to nine. 2022
to 7 rooms, guaranteeing that each central route has at least one SCB Hanoi
transaction office.

First, the branch considers opening more transaction offices in developed areas in
order to increase the branch's influence in the area, and improve the branch's
reputation and management ability. Branches need to pay attention to areas with quite
vibrant economic and commercial activities, high demand for capital, the potential for
money in the population, and convenient transportation. The branch needs to quickly
open a transaction office here to increase its competitiveness with other banks in the
area, creating favorable conditions for attracting customers.

For transaction offices that have become stable and effective, it is necessary to have a
long-term lease or buy-back plan, to limit the need to relocate or change the location
of transaction offices.

Consider opening small transaction points in 03 crowded places. These are the areas
for banking services that currently only have Agribank's branches, in addition, there
are no other banks, so customers have almost no choice. At these locations, customers
have a high transaction density but it is difficult to open transaction offices, branches
need to combine good security and safety of vaults to create convenience for
customers to transact. The characteristics of transaction points with compact,
specialized personnel in operations are located in commercial centers and markets, so
they can take advantage of the facilities of the above public places, and save money.
reduce operating costs.

49
Regularly check the maintenance of SCB's image at transaction offices: neat and
orderly transaction space, arrangement of drinking water, internet access equipment,
regular update of interest rate and fee information. If the transaction offices are really
ineffective, the author proposes to change the location or merge these transaction
offices to follow the retail banking model with the following characteristics of the
new transaction office. : The area is large enough to carry out the retail model,
including customer-friendly transaction desks, separating the fund from the
transaction desk, and the transaction office needs a place to park motorbikes large
enough and convenient for customers. The security guard of the transaction office
ensures the safety of customers since depositing or withdrawing money to a safe
storage point in the transaction office area.

In parallel with the traditional network, following modern trends, the branch also
needs to build an electronic distribution channel through automatic payment such as
ATM, POS, or AutoBank. This is a potential deposit channel, so in order to achieve
the goal of deposit mobilization, banks need to promote sales of products and services
through this distribution channel.

Invest in more ATM/POS machines, and improve the quality of payroll service
through accounts to attract more customers.

The card operations department proactively grasped demand, approached units, and
proposed to equip card readers to develop a card acceptance network (POS) and
strengthen links with banks in the area.

3.2.2 Personal credit product development solutions

Concerning personal loans: Analyzing the various consumer requirements. Being able
to provide a wide range of goods and services that meet customers' demands at a
cheap cost would enhance the relationship between the client and the bank, lowering
rivals' competitiveness by dragging them down. As a result, recognizing clients and
their requirements, as well as discovering untapped areas, is critical for banks in
developing new loan products.

50
For deployed products, based on a review of consumer demands, identify the issues
that the existing product is unable to address, hence addressing these flaws such as:
Improve non-real estate lending products in the direction of obtaining mortgaged by
the house/land acquired without having to go through legal formalities. It also helps
to lessen risks for banks in receiving collateral when legal processes have not been
completed by collaborating with the Notary Office and the Department of Natural
Resources and Environment to provide a full service package of registration and
mortgage of assets produced from loans. Instead of 10 years for conventional housing
loans and 15 years for project housing loans, the loan period should be increased. The
loan term can be increased to 20 or even 25 years because buying a house is one of
the big goals of everyone's life. Therefore, they need a long time to reduce the
amount of loan repayment each period to ensure their ability to spend on daily life.

To meet the characteristics of small company clients, the business loan product has to
minimize the criteria in the direction of more flexibility, such as: no financial invoice
required, no banking transactions... Customers who have a job and a high income but
do not have a salary are offered unsecured loan products by commercial banks. Car
loan products must appeal to a wider audience and be used for a variety of reasons,
including family automobiles, business cars, and trucks.

Increase product features by using contemporary technologies. Credit cards are

technologically advanced items. Commercial banks must aggressively study and use
technology to expand critical product features in the context of rapidly evolving
technology, particularly digital technology. The security aspect of foreign credit cards
comes in first. Commercial banks are now implementing the EMV standard for the
issuing of overseas credit cards (chip card standard according to Europay-
MasterCard-VisaCard technology). This is the most sophisticated card security
technique currently available. Increasing the number of points that accept credit card
payments.

Branches need to develop forms of credit lending to individual customers in terms of

lending purposes, repayment methods, lending methods and should diversify lending
interest rates.

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Currently, the branch has not yet implemented a number of loan needs such as the
demand for loans for labor export, the need for loans to study abroad, although
according to the branch regulations, these types of loans can be deployed. In the area,
there are many needs for loans to serve the needs of labor export, the demand for
loans to study abroad, but because the branch has not yet deployed, these needs are
not met. This has reduced the diversification of credit lending products for industrial
customers, and also reduced the competitiveness of this form of lending.

For loans to study abroad, customers only need to prove their financial ability to
repay the loan (with high and stable income, high repayment ability,...) loans to cover
living and study expenses. Therefore, this is a fairly simple form of lending, branches
should deploy this form to increase sales of credit loans to individual customers.

For loans to serve the needs of labor export, it is more complicated when the branch
needs to have a relationship with the labor export enterprise, the local government as
well as the labor export management board, the branch will coordinate Cooperate
with the recruiting party to disseminate and guide employees to make application
documents and procedures for loans, and urge debt repayment. The labor export loan
process is relatively complicated and high-risk, requiring careful appraisal of credit
officers. If this lending activity can be implemented, it will increase credit sales to
individual customers and create favorable conditions for the branch's development of
individual customer credit loans.

The form of lending by credit card has also just been implemented by the branch,
although the demand for loans via cards of employees is very high at present. The
branch should consider implementing this form immediately, first of all in a part of
the branch's staff. After that, we will closely follow the actual situation, record the
arising problems, thereby perfecting and bringing our products and services to wide
application.

All forms of credit lending to individual customers of the branch are direct loans, that
is, customers who need a loan, go directly to the bank, present their loan request and
complete the loan application. .

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With this type of loan, the branch has not fully exploited the potential of the credit
lending market for individual customers, but mainly consumer loans for employees.
Therefore, to be able to develop credit lending to individual customers, branches need
to combine with indirect lending. Accordingly, the branch will establish relationships
with retail businesses such as automobile and motorbike retailers, supermarkets
selling household appliances,...; After determining the customer's product demand
and at the same time making a good assessment of their ability to pay, the bank will
sign a credit contract with the customer, then the customer will purchase, the seller
will centralize sales invoices and send them to the bank to request payment, and the
last step is the customer's debt collection branch. Or in case there is a group of
customers who borrow money to produce a certain handicraft product, the bank can
make a loan through an intermediary (usually the head of the group, group, or
association), that is, transfer Some stages of lending activities to these intermediary
organizations such as debt collection, loan disbursement,... This form is very suitable
in case a certain member of the group does not meet certain conditions. The
remaining members can stand to guarantee that member, and it also saves transaction
time between the bank and the customer. If this form of lending is well implemented,
the branch will easily increase loan sales.

For traditional forms of banks' loans (including loans to carry out production and
business plans, loans to serve the needs of house construction, home repair, home
purchase, and loans to purchase furniture) banks also need to be more flexible in the
lending process to convince customers to borrow money from the bank, and from
there they will attract more new customers to the bank. From there, it will create
favorable conditions for the branch's personal loan development strategy.

In addition, the branch should diversify debt payment methods to suit the customer's
income period in order to create favorable conditions for customers in paying capital
and interest. Currently, the branch mainly applies the debt collection method
according to the fixed annuity, but this method cannot be suitable for all customers,
so the branch needs to adjust the debt collection period accordingly. helping
customers feel convenient when borrowing from the branch.

53
In addition, the branch should apply a flexible interest rate, not a rigid interest rate to
all customers. Depending on the customer's reputation, financial capacity, and
collateral value, the branch may consider reducing interest rates for customers. If the
above tasks are done well, the branch will have favorable conditions to develop credit
loans to individual customers and complete the loan plan set out.

3.2.3. Solutions to improve processes and personal credit policies.

Change the credit organization model to one that focuses more on work
processing, notably outsourcing a number of steps and forming credit support
departments. Some tasks are outsourced. Collaboration with valuation businesses to
establish the worth of collateral assets, as well as engaging a market research firm to
analyze demands and provide customer service: Working with an independent
evaluation firm is beneficial. The valuation of collateral is objective, avoiding
overvaluation, which poses a danger to the bank (if the asset's true worth is
insufficient to guarantee a loan), or undervaluation, which results in poor
performance. Customers' loan demand will be met, while credit officers' role in the
evaluation stage will be reduced.

Commercial banks must take advantage of existing technologies such as SMS

banking and e-banking, as well as the growth of ATM systems and POS machines, to
help credit work in automating the process. Workplace credit monitoring includes
automatic debt reminders through SMS and email, as well as automatic debt
collection by ATM transfer or POS loan payment. Automate the tasks listed above.
assisting credit officers in reducing operations while providing maximum comfort to
clients, boosting work efficiency, and establishing the image of a dynamic
commercial bank with high competitiveness compared to other commercial banks.

People - Human resource development.

Improving the professional qualifications of credit officers is an indispensable

requirement for the development of the bank. Credit officers are not only good at
appraisal skills but also have to be good at sales and consulting skills, but to be good
at these skills, credit officers must learn. Therefore, the branch needs to organize
training courses for credit officers on credit lending to individual customers.

54
 Thereby improving appraisal skills, creating a professional style, and
contributing to improving the quality and development of personal credit loans,
because credit officers are the image of the bank in the eyes of customers. If the credit
officers are persuasive, competent, agile, enthusiastic, and have a good service
attitude, they will always retain customers and attract new customers to the branch.
As the products of banks are more and more similar to each other, the service style
and attitude of the staff are the factors that make the difference between banks.

Improving the professional qualifications of credit officers will help shorten the
loan appraisal time, thereby improving labor productivity and helping the branch to
serve a larger number of customers. The reduction of the loan appraisal time has a
great effect because it will quickly satisfy the needs of customers, especially those
who need to be disbursed quickly to serve all their needs. Currently, the time to
approve a branch's loan is quite long: for short-term loans is 3 days, and medium and
long-term loans are 7 days after the credit officer receives all the documents, During
this time, the credit officer must answer whether or not to lend the customer a loan, if
refused, the reason for the refusal must be stated. But the time to approve such a loan
is too long and does not create competition because there are other joint-stock
commercial banks that can answer customers within 24 hours. Therefore, in order to
create competition in order to implement the strategy of developing lending activities
in general and developing credit loans to individual customers in particular, the
branch needs to reduce the time to approve a loan. .

There is a lack of specialization in the branch's credit department, ie a credit

officer in charge of both business and personal loans. This is understandable when the
number of credit officers here is only a few, but also includes international payment
operations, appraisal services, etc., it will be difficult to assign each person to take
charge of one activity. Small actions for each lender such as loans to serve the home
buying needs of industrial customers, and loans to buy household appliances, but in
my opinion the branch should divide the credit department into 4 groups: one a group
in charge of international payment operations, a group in charge of lending to
customers being state-owned enterprises, a group in charge of lending to non-state
business customers, and a group in charge of lending to individual customers.

55
 Such division will create a specialization in lending operations, thereby
improving the quality of this activity and promoting the development of credit
lending for individual customers.

In order to promote credit officers to perform their duties well, the branch
should regularly launch emulation movements, research and promote initiatives, etc.
At the same time, have worthy reward regimes, promptly with cadres with
achievements, enthusiasm, and enthusiasm at work, and reprimand measures for
cadres who commit mistakes and inadequacies, in order to create a fair and serious
working environment. and have a high sense of responsibility.

3.2.4. Solutions for propaganda and advertising of products and services

Marketing activities:

Communication work is a very important and effective tool in the competitive

environment of the banking system. Currently, this is an area of marketing activities
that SCB Hanoi has been paying special attention to. Here are some solutions to
maintain and promote existing strengths, while partially overcoming existing
limitations:

Advertising activities: In order to increase the effectiveness of current forms of

advertising, branches should do a few more issues as follows:

Advertise on newspapers and television with concise, easy-to-understand and

memorable information for readers and viewers. Design in the form of small ads but
attract the attention of readers. In particular, it is necessary to increase the frequency
of advertising broadcasts in the time frames from 8 pm to 10 pm to ensure that the
majority of customers targeted by the Branch can see it.

For areas where there are transaction offices, it is necessary to approach brand
promotion, product and service introduction on the loudspeaker system of wards,
communes, neighborhoods, villages, etc. In order for the SCB brand to gradually
ingrained into the subconscious of people, especially people in remote areas.

56
Promote advertising activities through leaflets, banners, other forms of advertising
affixed at the branch to make them more vivid, because this is one of the traditional
forms of advertising that has been used a lot by banks, but the actual effectiveness has
not been achieved as expected. For example: Replace the materials to print this
information more modern, can be on transparent or luminescent plastic... And
increase the distribution of leaflets advertising new deposit products and services to
customers. goods at transaction locations, densely populated areas.

For VIP customers: priority is to focus on direct marketing of products to customers.

Regularly monitor large deposits due to proactively market and invite customers.
Send notifications about new savings products, promotions to customers by post,
email.

About PR activities:

The Branch needs to constantly strengthen and expand relationships with the mass
media such as newspapers, television stations in order to enlist the media's support for
the Branch's business activities.

SCB Hanoi should also organize a number of Events through major holidays such as:
Bank establishment day, branch, ... can organize meetings with customers, first of all
for customers customers who are having a relationship with the bank, then the target
audience, this creates a beneficial relationship for the bank on the one hand, and on
the other hand can collect their opinions directly so that the Banking services are
becoming more and more customer-oriented. At the end of the meeting, there may be
small gifts printed with SCB's logo to give to customers, although these gifts are not
of great value, they also have a significant effect in maintaining loyalty. as well as
attracting new customers, instead of just launching new products or offering
promotions like most banks regularly do now.

Sponsorship activities include:

Building the image of SCB Hanoi connected with strong financial - banking
operations and an always vital business by sponsoring high-humanitarian programs
and actively participating in social security activity.

57
Public interest is taken into consideration. These initiatives are intended to enhance
and connect SCB Hanoi's relationship with local authorities, gain public trust, and
improve SCB Hanoi's market position, reputation, and image.

Student sponsorship is available in the following formats: Scholarships for

outstanding students or policy families, sponsorship of some positive instances of
overcoming obstacles and studying well, sponsorship of school-level contests, union
movements, etc. to promote and strengthen SCB's image with students, who are
regarded future clients of SCB.

About promotions:

Branches should research and develop promotional programs for customer referrals to
promote new customer development.

In the process of communicating with customers, tellers need to find out the
customer's preferences to choose appropriate gifts according to each applicable
program. Branches need to issue regulations on types of gifts according to each event,
such as watches are given on the occasion of opening a new PGD, raincoats or
umbrellas are given to customers who come to deposit money in the rainy season,
The set of dishes is given to customers on the occasion of the Lunar New Year every
year, the notebook is given as a gift by the customer with a new term when the old
term ends...

Links with supermarkets, hotels, restaurants, and entertainment venues so that

promotional products are tickets to use free of charge services at these units.

3.3. RECOMMENDATIONS

For government agencies:

Completing the legal environment, bringing the driving philosophy closer together,
and working closely with the authorities. The government must have the right
economic development policy, as well as appropriate foreign, liquidity, and
investment policies, as well as reduce the burdensome administrative management
system and increase the state's independence. in implementing national monetary
policy in an appropriate and realistic manner.

58
Furthermore, the state must increase capital use efficiency, particularly in state-
owned companies, by hastening the equitization process. Avoid spreading
investment, embezzlement, wastefulness, bogus profits and losses, and other issues
that undermine people's trust in the Party and State's economic growth policies.

For the SCB:

The Hanoi branch should be given priority in implementing its own policies in order
to compete with competitors. Support market research for the branch just to aid in the
sale of superior items.

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 CONCLUSION

The application of marketing in banking, particularly product consumption, is

necessary to survive and flourish in the present business climate, which is
characterized by increased competitive pressure and numerous dangers.

The following tasks were essentially achieved by this research:

Systematize the basic marketing theory in terms of commercial bank product

consumption.

SCB Bank - Hanoi Branch conducted a marketing analysis to enhance product usage.
Then, in this work, explain its limitations and reasons.

In the future, explore and offer realistic and highly successful solutions based on a
commercial approach.

My thesis undoubtedly includes flaws due to restrictions in several areas such as

research time, references, and so on. I eagerly await your feedback in order to assist
me better my research.

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