Professional Documents
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Baocaothuc T P
Baocaothuc T P
INTERNSHIP REPORT
6/20/2018
Acknowledgement
This report has been prepared for the internship that has been done in Viet Nam Prosperity
Joint stock Commercial Bank in order to study the practical aspect of the course and
implementation of the theory in the real field with the purpose of fulfilling the requirement of
the course of ISVN (Master of Marketing)
All aspect of the report that has been prepared have been work-shopped with VPBank’s
marketing team members who have provided extensive input and supportive participation.
I would like to pay gratitude, and want to give especial thanks to our respected superviser Dr
Pham Thi Lien It was her encouragement, patience, and valuable feedback that enabled me to
complete this work.
I am also deeply indebted to my academic supervisor, Mr Sandeep Deobakta, Head of retail
Banking Division at VPBank. The support that he provided motivated me to think more
broadly about associated concepts and helped expand my understanding of product as well as
consumers’ insight. Invaluable discussions we held stimulated my enthusiasm and
imagination in the research process.
Research has been carried out with the support, cooperation and assistance of VPBank’s
customers that have been asked to participate in the study. They have spent a significant
amount of time and resources on providing input.
This project would not have been possible without the kind support and help of many
individuals. I would like to extend my sincere thanks to all of them
This report has been prepared as a mandatory requirement of the Master of Marketing and
perspective program under International School, Vietnam National University, Ha Noi and
Nantes’ University. This report is entitled “Partnership program for increasing sales
performance of VPBank’s unsecured personal loan (UPL)”. The internship supervisor was Dr.
Pham Thi Lien – Professor of International School, Vietnam national University, Ha Noi.
Over the past decade, VPBank has always sought to become the leading retail banking in the
Vietnamese Banking sector. With that ambition, VPBank’s resources are focused on the
following strategic segments: Individual customers, small and medium enterprise customers,
small business customers, consumer loans. For each of these segments, VPBank has the
corresponding sales channels to provide products and exploit customers.
Among strategic products of VPBank in the period from 2012 to 2017 and from 2017 to 2022,
unsecured personal loan (UPL) is considered to be the most important product. This explains
why VPBank has different kind of sales channels for this product. In 2016, FE credit, a
subsidiary company of VPBank operating in parallel with retail banking Division of VPBank
in Unsecured personal lending sector, officially compete each other
In the year 2017, VPBank had outstanding growth in consumer credit, however the growth
came mainly from FE – credit (a subsidiary company) which made a big contribution to the
bank total earning and account for more than 48% market share of consumer finance
companies1. With consumer loans, VPBank’s Retail Banking Division has slower growth rate,
not competitive enough to financial institutes and other Bank in the market.2
The experts in this fields believed that the challenge in 2018 will be greater as more and more
banks come into this sector. Despite of great potential for growth in Vietnamese market,
customers for this segment is no longer plenty because of customers seeking and stalking
activities of financial institutes.
In addition, banking industry has changed in the last 10 years, especially in the mindset about
the position of bank and its customers. If in the past, customers have to humbly ask for their
loan from bank, nowadays, bank must rush to invite customer to borrow money.
1
VPBank’s report made by CEO in 2018 Annual General Meeting of Shareholders https://baomoi.com/vpbank-
tham-vong-gi-voi-tin-dung-tieu-dung/c/25327796.epi
2
[MW Special Report] Vietnamese consumer finance market https://thelowdown.momentum.asia/plenty-
room-growth-remains-vietnamese-consumer-finance-market/
7 Chapter 1: Introduction | Year 2016 – 2018
MASTER OF MARKETING AND PROSPECTIVE
For seeking customers and optimizing selling opportunities and positioning Unsecured
consumption loan - UPL product in consumer lending market, Retail Banking division –
VPBank believe that it is important to understand customers and offer outstanding value
proposition of the product. Specifically, cooperation with partners, enterprises, brands to
reach customers, sell product is a way to increase resource, reduce costs.
As such, this marketing task is aimed at studying opportunities and pointing out plans for
cooperation and developing relationships with partners to boost sales of consumer credit
products through partner network.
Both primary data and secondary data were used in order to make the report. Based on prior
research report, author proposes a marketing mix plan. Then the practical experiences and
observations from the project work for during internship will be compared with literature.
Finally, quantitative research and customers’ awareness point at the end will lead us to the
answer.
(a) Primary resource
• Qualitative study: In – depth Interview with customers of VPBank
• Quantitative study: Surveys via email or phone
• Observing the effectiveness of marketing mix strategy on sales performance of the bank in
a period
(b) Secondary resource
• From prior research reports
• Journal and article related to banking industry and the similar topics
• Bank’s monthly reports
• Website information
Although the research has reached its aims, there were some unadvoidable limitations.
First, because of the time limit, this research was conducted only on a small size of population
who once had UPL loan with VPBank. Therefore, to generalize the result for larger groups,
the study should have involved more participants.
Secondly, due to limitation of finance resource and loan seems to be a sensitive issue to
customers, they are not totally willing to answer all of the question. Some of them did not tell
the truth or reject answering.
Thirdly, partnership is a take – time – strategy, so with only 3 months of implementation and
evaluation, the result migh not reflect 100% the effectiveness of the strategy.
Chapter 1: The first chapter of this study deals with introduction that presents the objectives,
methodology, and scope of limitation of the study.
Chapter 2: In order to understand the Bank on which the study is carried on, the second
chapter of the study deals with some theoretical concept about profile of Vietnam Prosperity
Joint Stock Commercial Bank (VPBank).
Chapter 3: The third chapther is about the conceptual framework of UPL product and UPL
sales situation in VPBank, the issue that leads me to this study and the opportunity of
partnership in the mission of increasing UPL sales.
Chapter 4: The fourth chapter is about different types of analysis and finding on customers’
behavior and potential partnership for VPBank.
Chapter 5: The fifth chapter is about conclusion and recomendation for partnership program
which are drawn by analysis of whole study.
Chapter 6: The final chapter, the implementation of partnership program in pilot phase, the
initial result and conclusion which is the base for partnership program in VPBank for the next
phase will be presented.
UPL is one of the lending products that are approved without the need for collateral. Instead
of pledging assets borrowers qualify based on their credit history and income. Bank does not
have the right to take physical assets (such as home or vehicle) if borrowers stop making
payment on unsecured loans.
- Customers promise to pay but they do not have to back up that promise by pledging collateral.
- Customers can apply for an unsecured personal loan when they need cash for: Wedding,
travelling, education, shopping, etc.
- Customers’ credit limit can be different with different banks. However, they can absolutely
borrow up to hundred millions as long as your profile meets the bank’s requirements.
Unsecured lending market starts to grow strongly in recent 3 years, take its source from the
change in consumers’ behavior and high demand on installment plan among medium income
consumers. In which, the habit of borrowing from relatives, friends or black market gradually
3
Definition by http://www.businessdictionary.com
11 Chapter II: Overview of unsecured personal loan product and partnership program | Year
2016 – 2018 MASTER OF MARKETING AND
PROSPECTIVE
switch to borrow from financial institutes
“Golden population” period, in 2016, Vietnam has approximately 55 million of people who
aged from 20 to 594. This segment does not have need for big loans; focus mainly on personal
consumption, household goods and vehicles. Income growth with average speed each year is
about 13.2%, especially in urban areas, stimulate customers to spend a lot for valuable
products and be capable of accepting interest rate up to 30-40% for not big scale - unsecured
loans. High interest rate is still the matter of concern for consumption lending activity, but
cannot be an obstacle to the indispensable development of this financial product because of its
benefit – to satisfy consumers’ personal demands before they can be able to pay by their
income.
With the market share of only 5-10% of total outstanding loans, the balance of market for
consumer credit in Vietnam is still very large. This rate in developed country
Stoxplus Company has studied and surveyed more than 2,000 consumers in 12 provinces/
cities. The result show that while many people have psychological anxiety when dealing with
the service of financial institution; but a part of consumers, especially young people are in
increasing demand for this service.
62.4% of respondents said that they had not used consumer loans. The reasons are they do not
want to owe debt and worry about the condition of loan.
But 47.8% of those who never used consumer loan in the survey responded that they were
willing or willing to borrow for consumption if they needed it. 5
For those who have used consumer loan, the factors that influence customers’ choice toward
financial institutions include: Loan policies (Clear, transparent, easy to understand); factors
that create the sense of friendliness (incentives, attitude of sales staff), convenience of service
(flexible loan, quick transaction).
In addition, the desire for lower interest rate and simpler loan procedure are also the factors
that borrowers expect. The report also noted the fact that people still keep the habit of
thinking to relatives in priority.
4
CIA World Factbook - This page was last updated on January 20, 2018
5
Report on consumption loan market in Viet Nam by TPBank
12 Chapter II: Overview of unsecured personal loan product and partnership program | Year
2016 – 2018 MASTER OF MARKETING AND
PROSPECTIVE
2.3 Partnership in marketing strategy
According to Mike Burnette – the Founder and President of Partnership Source: “Pure
partnership marketing is a symbiotic relationship between two or more marketing entities. It's
not a relationship where one party is purely selling goods or services to the other but a
relationship where parties are utilizing their own assets to assist the marketing efforts of each
other.”
In today's competitive world of brand marketing, using the power of partnership marketing to
gain marketing exposure and utilize new distribution channels is not only smart but also an
essential marketing tool for businesses who want to remain competitive in today's constantly
changing marketplace. As corporate and marketing budgets are always an issue, partnership
brand marketing programs provide a way to grow business and acquire new customers and
reach new market segments
Partnership brand marketing brings two companies and brands together—each with its own
brand equity and its own distribution strength. Whether teaming a fast food restaurant with a
movie, pairing cereal with toys, or aligning a car manufacturer with a theme park to capture
the family segment, partnership brand marketing creates strategic alliances for companies that
reach areas in which they may not normally compete—providing more marketing exposure
and ultimately gaining new customers.6
True partnership brand marketing programs are more than just promotions. When carried out
at a strategic level, partnership marketing can be expansive and deliver its full potential.
Strategies can involve all elements of the marketing mix and thus have an impact on a
company's overall marketing message, its advertising programs, as well as product packaging
and merchandising. Partnership marketing programs can also create joint sales and
distribution opportunities, broader in-store merchandising, more compelling packaging and
marketing material and overall offer stronger value to the consumer.
Creating strong, relevant and effective partnership brand marketing programs can be a
cornerstone of every company's marketing plan. Partnership brand marketing can actually
6
According to “How strategic partnership brand marketing can boost business” by Leeanne Rambin
13 Chapter II: Overview of unsecured personal loan product and partnership program | Year
2016 – 2018 MASTER OF MARKETING AND
PROSPECTIVE
affect and contribute to all elements of the marketing mix, including product and service
offerings, price, locations, distribution, and promotions. For example:
Partnership marketing can affect the actual product or service, increasing the overall value
and providing stronger benefits to consumers
Partnership marketing adds value to the overall price element by delivering a higher level of
perceived value and providing consumers more reasons to purchase
Partnership marketing impacts the location and distribution element, as it can open up new
places to offer services or sell product and gain shelf space
14 Chapter II: Overview of unsecured personal loan product and partnership program | Year
2016 – 2018 MASTER OF MARKETING AND
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banking and consuming o Credit approval experts in the offerings and
products based on deliver high quality
o More confident transaction history customer service
because suppliers are record at suppliers
verified by bank in database
advanced
How o Integration of o Customer o Partnerships jointly
VPBank and technology and data satisfaction studies deliver solutions
supplier kept to a minimum conducted with o Partners pull each other
work o Share profit and cost partners’ into deals to better serve
together to provide customers customers customers
lower price products. o Partners are o Co-marketing efforts
mutually invested driven by partners
and partnerships
are mutually
beneficial
Figure 2-2 Partnership approach
Note that: depending on each supplier we decide the level of collaboration. Not necessary the
partner must go from low to high. They may immediately be in high collaboration with
VPBank.
15 Chapter II: Overview of unsecured personal loan product and partnership program | Year
2016 – 2018 MASTER OF MARKETING AND
PROSPECTIVE
3 Chapter 3: Overview of VPBank
8
According to Mission, Vision, Development Strategy and Core value of VPBank on
http://www.vpbank.com.vn/
18 Chapter 3: Overview of VPBank | Year 2016 – 2018
MASTER OF MARKETING AND PROSPECTIVE
3.3 Organogram of VPBank
9
VPBank’s regulation or organization chart – Internal document
19 Chapter 3: Overview of VPBank | Year 2016 – 2018
MASTER OF MARKETING AND PROSPECTIVE
3.4 Organogram of Retail Banking Division and Sales distribution
At the end of its strategic five-year period, VPBank has become one of the five largest retail
joint stock commercial banks in Vietnam by revenue and profit, of which the Retail Banking
Division accounted for 50%. Following the successes of previous years, the income from
retail banking in 2017 was on target and up 66% year-on-year. VPBank has also developed
business strategies and product policies for optimal profitability using a Single Account
Profitability model. As a result, PBT grew impressively by over 100% year-on-year. In 2017,
the Bank launched successive initiatives to make products more suitable and attractive to
customers, resulting in the customer base increasing significantly to more than 2.7 million,
and producing 83% growth in loan balances. Together with credit growth, the Bank also
launched several community-oriented projects and products to promote sustainable
development for customers and society.
S – Strengths W – Weaknesses
With more than 200 transaction units, 5000 Along with high risk segment targeted, bad
sales staff in 40 cities and provinces of Viet bank proportion of VPBank is alway stay at a
Nam, opportunity to develope a wide high level. How to reduce bad bank firgure is
partnership network is great. always a matter of concern of VPBank
(3) Open risk appetite running low and the Bank need to find the new
10
VPBank annual report - 2017
23 Chapter 3: Overview of VPBank | Year 2016 – 2018
MASTER OF MARKETING AND PROSPECTIVE
“business taste” targeting high – risk
segements with high return. Unsecured
lending is a high risk product, and focus on
it is going in the right direction of VPBank
O – Opportunities T – Threats
unsecured loans of less than VND100 loans for financial enterprises”: bring
million for life purpose in Vietnam, is very more new name to comsumption finance
growth-based economy. Consumer lending More and more banking and financial
In 2015, Personal lending of 11 banks which was studied reached 640,866 billion VND,
account for 27,5% total lending of 11 banks. Compared with the largest customer loan size in
the system (598,4 trillion VND), BIDV has the highest personal unsecured loan balance,
reaching 137,9 trillion VND. VIB had a small loan size, (47,8 trillion VND), but has the
outstanding balance among 11 surveyed banks (60,7%)
In the period from 2013 – 2015, 10/11 surveyed banks witnessed an increase in personal
unsecured loan. Of which, Lienvietpost Bank has the largest increase rate, reaching 13%. By
2017, like many banks aim to become the number 1 retailer: Vietcombank, Viettinbank
b) Finance Companies
There are currently 7 finance companies run effectively in personal unsecured lending market.
The total loan balance of 7 companies reach about 38 trillion VND by 2015, account for 7,6%
total lending balance of the market. Among them, FE Credit is the lead with lending balance
achieve 20,208 billion VND, account for 53% total lending balance of finance companies.
Next up is Home Credit (16%), Prudential (11%)
However, compared to 2015, the market share of bank group has narrowed to 87% from 91%.
The market share of financial company and other group rose to 13% from 9%. The reason is
that sales services of financial companies are more prominent such as: fast approval time,
application of 0% interest rate installment in the key fields as house hold appliances, access to
all customer segments (including non-income students, low-income workers), flexible
customer approach (at counters, online, mobile finance advisory)
VPBank’s UPL sale has to face with a lot of difficulties and challenges both form outside and
inside since second half of 2017.
- Depletion of customer reource
- Bad information on the financial market: about high interest rate
- Tightenning regulation from State bank for consumption loan and unsecured loan
- Competitive market
This leads to a drammatic fall in both sales result and number of new customers. From July to
Dec 2017, sales of UPL keeps down to around 30- 40% vs target. The paid off amount was
big but new disbursement did not improve.
In this situation, Marketing team and Product team have to sit together and find immediately
the solution for it. After evaluate all the strength, weakness, threaten and opportunities of
UPL, we decided that, a partnership program can possible be the key to a new chance for
UPL.
Companies across many industries are finding that more value comes from strategic
partnerships, where two companies have a vested interest in and commitment to creating a
mutually beneficial relationship that returns value to both the end customer and to the partners
themselves. The combination of two companies not only helps them to reach each other's
customers, but also leverages each other's strengths, such as distribution networks,
infrastructure, or brands. The two stand alone enterprises will only be able to use their own
However, with the limitation of time, human and finacial resource, and in order to make the
plan more effective, VPBank need to know, which partners are potnetial to collaborate, in
which time and by which way?
With that orientation, I with support from my colleagues at VPBank conducted a research, at
first, to understand customers and their buying behaviors. From the research, necessary
information can be gathered for propose partnership development plan.
- Objectives 1: To understand the loan’s purposes that are most commonly seen among UPL’s
customers
- Objectives 2: To find out the source of information customers often find when they need a
supplier for their purchases to build effective partnership programs and marketing campaigns
- Objectives 3: To understand the consumption seasonality to launch suitable promotion,
marketing campaign
- 10 UPL customers of VPBank selected from customers database. Customers were chosen
within specific parameters to sample participant characteristics (age, salary, occupation, etc.)
so as to provide a view of broadest range of customers.
- The duration of interviews vary from 60 to 90 minutes. All interviews were recorded, with the
permission of the customers being interviewed
- After the interviews, the recordings were transcribed into computer files. Care was taken by
researcher team to assure that the respondents that they and the place of their work would not
be identified in any sub-sequent report. Once the final report was written, the tapes from the
interviews will be destroyed
4.2.5.1 Loan’s purposes that are most commonly seen among UPL’s customers
- Customers who want to buy high value products tent to choose shopping
center, or big stores which has high reputation. Name and reputation of one
supplier seem to be the first factor that customers search for when they want to
find a place to buy things costly, more than about 10 million VND. For the
same type of goods but less value or stability, customers have more flexible
choices such as: shop near house, online website, Facebook, etc.
“I love gentle style for my house, so I went to Nha Xinh, one of the biggest and
most famous interior stores in Ha Noi to find the suitable ones. I cannot
29 Chapter 4: Qualitative and Quantitative study | Year 2016 – 2018
MASTER OF MARKETING AND PROSPECTIVE
believe in the quality of retail shop” – Thanh – business man
- For business purpose
In this area, customers who need a UPL for retail business are for the purpose
of supplementing working capital. They need a certain amount of capital in a
short amount of time. To these customers, loan amount is more important than
loan term because they usually repay quickly.
“I have ability to repay the loan after 2 years of borrowing. However, the loan
term in my contract is 7 years and early repayment charge is rather high so I
have not paid off this debt”
- With additional working capital, customers often choose wholesale market,
trade village for their input.
“Friends in this field, they buy where I buy there. They go ahead, have
experience, they know where to buy with low cost but good quality”
- For the purpose of repairing the house, customer who hires Design agency will
buy furniture of that company.
Furniture that Agency uses in their design is not easy to be found in the market
or may be found but incomplete. Further, the design will be free if customer
buy interior at the company. As such, most customers who come to find design
agency have identified using a full package service.
“I ask my friend for consult and go shopping to find the right or so. It is more
beautiful if hire a design agency but I will have to buy all the interiors from
them if I want it that beautiful. Cost for a full package like that is rather
expensive”
- Customers with high position in company, high income prefer to be served a
full package service. They can work with only one person from design agency
and do nothing until their house is filled with all interior that they need
“I do not have much time so I find a design agency to do all that for me”
- Some keywords
§ Super market/Show room: Uma, Coop Mart, Cho Lon
electronic Market, Nguyen Kim electronic
§ Interior agency: Khong gian dep, Quy Manh, Hue interior,
Phuong Nam, Tuong Minh, Jara, Unique décor, Nha Dep
Company.
- Most of customers decided to borrow the entire loan limitation although the
initial demand may not be that large. Then, they still use the whole loan for
some other reasons
“I used up that entire loan. Of which about 70% was spent for the main
purpose, the rest I bought some other household items”
“I only need 30 million to cover the missing part to buy a motorbike. However,
I got a loan of 100 million VN. The remaining 70 million, I do not remember
for what I paid”
- All customers just remember the amount of money they have to pay every
month, not exactly the interest rate of the loan.
“Each month, I pay 2.4 million VND for principal and interest. This amount is
reasonable compared to my income. After paying the debt, I still have enough
monthly expenses”
- And interest rate is not the first reason for them to choose a Bank. Among the
respondents, loan term and loan procedure are more frequently mentioned.
“I see interest rate among banks is not much different. I also do not consult
much. I chose VPBank because your invitation come in right time and your
lending procedures is quick”
- Not all of the respondents know clearly about other products of VPBank.
12 out of respondents have been advised by VPBank about VPBank credit
card. 3 of 20 respondents knew about the over draft. Of which only one
customer use regularly both UPL and credit card of VPBank. Some others are
advised to open the card but did not use or closed.
“I have VPBank credit card right here. But I do not understand how to use so I
never used”
- Many of the customers interviewed revealed they had other financial needs,
such as buying home, car, insurance. However, these need have not been
grasped by the sales staff to advise the products.
“My wedding loan has been 3 years. I will pay off my debt in June. I need to
Loan’s purpose:
(1) Purpose of the loan that customers declared to the Bank may be not true.
Therefore, monitoring the loan after disbursement and taking care of the next
financial demand of customer may not be effective.
(2) The fact that customers use their identities to borrow money and then lend
again to the 3rd party who do not meet the Bank’s requirement causes a lot risk
to the Bank. However, with the orientation of expanding customer base and
actively increase the number of loan contract as VPBank has been done recent
years, controlling this problem is not easy to implement
Where do customers find information about suppliers
(3) Among all source of information, referrals from friends, relatives, colleagues
are considered as the most trusted source. Therefore, in order to develop
partnership effectively, Bank needs to go deep in to each industry, knowing the
suppliers are trusted and appreciated by the people in each profession. Quality
of the suppliers should be focused, avoid doing partnership in a general way
(4) We cannot deny that big brand, famous store still attract a large number of
In the quantitative study, we used “Monkey survey” as a tool and chose sending email as a
method to collect ideas. We sent email with link of questionnaire to 3000 UPL customers.. As
a result, we received 2046 responses and of these, there are 1842 responses are valuable, 204
are missing value. We collected 1842 responses as our data to analyze
- Objectives 1: To understand the loan’s purposes that are most commonly seen
among UPL’s customers
- Objectives 2: To find out the source of information customers often find when
they need a supplier for their purchases to build effective partnership programs
and marketing campaigns
- Objectives 3: To understand the consumption seasonality to launch suitable
promotion, marketing campaign
Purposes Respondents %
House hold items 423 67.5%
Paint 120 19.1%
Raw construction 108 17.2%
Flooring 93 14.8%
Interior 3 0.5%
Total 627
Figure 4-2 House construction and decoration – specific purposes
The shown table data give information about the number of customers in 5 categories in term
of house construction and decoration purposes. A high number of customers use their loan for
house hold item, account for 67.5%. Follow up is painting purpose with 120 customers ~
19.1%
Approximately 20% of customers use design consultancy service (in whole or in part)
Design consultancy Respondents %
No use 510 81%
A part 99 16%
Whole package 18 3%
Figure 4-3 Design consultancy service using
Furniture buyers tend to choose super market, electronic center, or show room near their
houses to find the house hold item they want
Suppliers Respondents %
Super market, showroom 201 32%
Near house retail shop 195 31%
Street specialize in selling furniture/household
171
items 27%
Design consultancy company 33 5%
Handicraft village 27 4%
Other (specific name of the shop) 15 2%
Figure 4-4 Suppliers chosen by customers for furnitures
Channels Respondents %
Go straight to interior super market 255 40.7%
Friends’ referral 186 29.7%
Search on Google 48 7.7%
Suppliers’ official website 48 7.7%
Other 90 14.4%
Total 627
Figure 4-5 Channel for finding information about suppliers
The majority of respondents ~ around 41% are priority to go to super market, big center for
house’s interiors. These are prestigious locations for service and cost. With this purpose,
friend referral is not really important. This can be explained by the fact that in Vietnamese
market, super market or electric centers have a certain place in customers’ mind. Their
effective marketing strategy and discount policy make them attractive toward customers.
Some outstanding name should be mentioned are: Dien May Xanh, Nguyen Kim, Media mart,
Dien May cho lon, Nha Xinh, Uma, etc
11
The gioi di dong annual report 2016
38 Chapter 4: Qualitative and Quantitative study | Year 2016 – 2018
MASTER OF MARKETING AND PROSPECTIVE
purchase voucher, etc.
- With retail stores:
§ Organize partnership program in local scale and every
branches of VPBank has the right and responsibility to link
partner with shops or showroom in local.
§ Design local partnership policy to offer profits to retail
shops, showroom if they join partnership program.
Types of business of all the customers who use VPBank’s UPL for business purposes are
diversified with nearly 30 different types.
Type of business Respondents %
Others 87 19.0%
Total 459
Figure 4-7 Specific loan’s purposes among customers borrowed for their business
Wholesaling and retailing account for 50% of all business lending purposes. For service,
industrial production, agricultural production, the proportions are not high with about 10%,
6% and 6% respectively. In the meanwhile, others purposes make up a large part. As gathered
from respondents, others types that are mentioned are as: pawn, real estate, stock. Because of
their high risk, those lending purposes are all not accepted by VPBank for a UPL.
In all business fields, the number of customers who are using their UPL amount for financing
working capital is much higher than fixed assets investment. Especially for whole selling and
retailing, the proportion for this purpose is more than 50%. This can be explained by the fact
that, for customers, borrowing a small amount of credit is usually a need arises when capital is
needed due to deficiency. Often, customers with purpose of fixed assets financing have a
large need for a loan and these customers can be able to choose secured business loan which
is much more suitable than a UPL.
However, in some cases, a UPL is not quite reasonable for working capital investment.
VPBank can offer over draft for this type of purpose, which is much more flexible and
suitable.
ð Conclusion: The Bank should be able to catch up with the upcoming technological
products like IPhone, Samsung, Oppo to capture the psychology and behavior of
customers. Since then, prepare promotion program to support the price, preferential
interest rates, support to change old phone for whom spending with VPBank’s loans…
Such program should be planned and launched on time.
For other hobbies, travel, fashion and others, because the percentage of users spending
on them is not much, VPBank may not need to consider developing marketing programs
for this group.
More than 70% of unsecured lending customers are young clients (under 35 years old)
Age groups Respondents %
20-35 1383 76%
Income Respondents %
Both 270 71.20%
Salary 72 19.50%
Business 33 9.30%
Total 375
Figure 4-14 Income of high income UPL customers
In terms of age, most clients with income of over 20 million VND are from 35 to 45 years old.
ð Conclusion: From the above statistics, we can draw a portrait of VPBank’s UPL
customers as following:
o They are young, with age from 20 to 35
o Their income is totally or mostly come from salary
o They have many spending needs in life
o They borrow money mostly for investing in their business and for the family
On the other hand, VPBank seems to have missed a lot of opportunities from customers
aged 35 to 45 year olds. Or their product communication campaigns have not hit this
customer segment yet.
In terms of demographics, with the increasing trend of life expectancy of people now,
the number middle age customers will be higher and higher than other groups. In
addition, this is also a set of customers have high and stable income, they have more
consumption demand not only for themselves but also for family and children.
VPBank need to redefine the target customers of UPL and communicate it to sellers. At
the same time, periodically overview statistic to find customers who have not exploited
well and can exploit more
5.1 Recommendations:
(According to customers’ spending behaviors understood from the research in chapter II, UPL
market competition, and UPL’s SWOT)
5.1.1.1 Unified loan approval policy, offer 1 credit limit for all unsecured lending
products
The fact that, limitation for all unsecured lending products is approved based on customers’
income. Total credit limit is up to 10 month salary, depending on the bank. In addition,
customers who have been granted a credit card limit, for example, the limit for UPL or
overdraft will be deducted when they apply for these products. Instead of assessing and
approving each product separately, VPBank need to provide customers an unsecured lending
limit, in one time. Depending on customers’ choice, the limit will be divided into 3 divisions
for: credit card, overdraft and UPL.
By this way, customer who in need of credit card and overdraft will automatically granted an
UPL amount and VPBank save a lot of operation cost: assessment and human resource, etc.
5.1.1.2 Build a bench mark for UPL customers and offer different interest rate
corresponding to the needs of customer
For customers who are in urgent need and require a fast disbursement process with simple
requirement, VPBank can take risk and charge higher fee and interest rate in return. On the
other hand, customers who meet the loan paperwork and accept waiting will be charge lower
interest rate.
Every day, aspiring business owners are pursuing business opportunities so raise the capital
they need to achieve their business goals. The launch of corporate mortgage loan product
allows small businesses to borrow additional capital without collateral.
For many small businesses, eliminating the need for collateral opens doors. One household
business may not even have any assets to secure business funding. Moreover, obtaining an
unsecured business loan is faster because the lender doesn’t have to spend time appraising
collateral, filling out forms, waiting on documents from other sources, etc. The process is
simpler and more streamlined. Speedy funding can make all the difference for small
businesses. They rarely have the luxury of waiting weeks or months for a traditional loan to
come through. Or not quick approval and funding can pull them out of a jam, whereas waiting
could kill the business. It can also give business owners ready cash to take advantage of a
timely opportunity. Just as higher approval rates, the speed of an unsecured loan can
strengthen the business.
With these benefit above, unsecured business loan is an ideal solution for many household
businesses.
Stand on the bank, of course, this kind of loan increase lender’s risk and VPBank will find
another way to reduce risk, such as charging higher interest rates. Unsecured business loan
financing for businesses make money available on an ongoing, revolving basis. Over time,
VPBank gain confidence in borrowers’ consistent repayment track record. VPBank then can
Considering the opportunity of selling, after the business has a loan at VPBank, the bank can
continue to approach to consult other suitable products for employees of that enterprise. This
is a reliable source of customers. Employees’ income and ability to pay are demonstrated by
company’s repayment track record.
Most people try to plan their expenses but there are things it’s impossible to foresee.
Sometimes consumers need to borrow money really quickly and they can’t wait until they
have time to come to the Bank and explain to a sales man why they need the money.
Regardless the instant approval, whenever the customers have need of a loan, they can access
to the system, enter some input information (income, career, purpose, etc.) and then they can
see how much money they can possible to borrow from VPBank. This system has it benefit in
partnership program which we will have detail look in the next part.
For customers who already had credit history, VPBank can have a quick assessment to offer
or instantly approve a small loan amount. Then, if want to increase the limit, customers can
submit their collateral to the bank and wait for the top up.
By digitizing lending approval procedure, VPBank can also save a lot of operation and human
resource costs. The interest rate for online UPL can therefore reduce from 0.5% to 1%
compared to traditional way.
or repair
Real estate Vinhome; Mulberry land; Dat xanh; Net Land;
interior company …
Technological/ digital showrooms, The gioi di dong, CellphoneS, TechOne and other
Spa, beauty salon, dental Kangnam beauty salon, Thu Cuc, Lavienrose …
Spa of cosmetic brand: Menard
With limited human resource, VPBank should priority focus on 6 above sectors. Other
spending purposes such as wedding, medical will be invested in next stage.
a) Sales forces
- Build Incentives policy for partners’ sales forces: (PGP) Partners get Partners
or (PGC) Partners get customers allow suppliers who are VPBank’s partners
can recieve incenttives for each partner or customer that they refer to VPBank.
b) Product
- Special product: UPL policy can be adjusted to be suitable with the partners’
customers (reduce interest rate, quick approval process, flexible loan tenor,
etc.)
- Sell product in bundle. For example: customer is approved a UPL of 100
million VND and instead of money is disbured to their account, he/she receives
a package of cosmestic surgery cost 100 million VND
c) Process
2018 2019
May Jun Jul Aug Sep Oct Nov Dec Jan
Rough
"Dream house in your hand"
construction
"Refresh your
Interior, household
home with
items
VPBank"
Firm step in
Education
the future
Technological
Old renovated
devices
For pilot period, from 1st March 2018 to 30th April 2018, the number of UPL partners is
expected to be:
Collaboratio Ja Fe Ma Ap Ma Au Se No De Tota
Jun Jul Oct
n n b r r y g p v c l
High 0 0 0 1 1 1 1 1 1 1 1 0 8
Medium 0 0 20 20 20 20 20 20 20 20 20 20 200
10 10 10 10
Low 0 0 80 80 80 100 100 100 940
0 0 0 0
Figure 5-11 KPIs of partnership development (number of partners)
Partner collaboration activities are implemented in parallel in 2 levels, macro and micro. Macro
level is for partners in large scale, taken responsibility by Headquarter (HO) – Partnership
development department. In the mean while micro for local partners, conducted by branches
• Step 1: Branch makes a list of potential partners and necessary budget for acquire these
partners, then send them to partnership development department
• Step 2: Based on the proposal from branches, partnership development department identify
the suitable partners for a period, priority to which partners…
• Step 3: Head of Retail Banking approved the partnership collaboration plan of the branch
• Step 4: Finance Division provide money for branch to implement the approved partnership
collaboration plan
• Step 5: Branch implement the plan (with support from HO), tracking result and make the
report at the end
• Marketing department
- Design promotion materials about VPBank, VPBank’s business result, position of the
58 Chapter 6: Implementation and result | Year 2016 – 2018
MASTER OF MARKETING AND PROSPECTIVE
bank and its UPL product to invite associate partners
- Develop marketing framework for different groups of partner. Cooperate with related
unit, take the lead in developing detailed marketing plan and implement marketing
with partners
- Coordinate with partners and related units to produce marketing publication of 2
brands
• Partnership development department
- Build up a standard framework for partners based on the following factors: brand
name, distribution, competitive capacity, expected benefits to the bank... to group
partners
- Develop policies, benefits for class and group of partner: Promotion, redeem, bonus
policy, commission…
- Search for associate partners, be responsible for linking with large scale partners, or
transferring partners to branches if any
• Training department
- Organize training programs for sales staff of partner about VPBank’s product and
promotion program and policy in each period
- Build sales support tools: Sales kit, booklet and supply to marketing point.
• IT
- Establish a partner management website that allows VPBank partners to post their
information, offer discount, exchange products/services.
After 3 month of implementation, the number of partners that VPBank collaborate is as following
Channels
Categories Partnership development
Branches
department
Business (suppliers for input materials) 2 24
High 0 0
Medium 0 0
Figure 6-3: UPL disbursement through partnership channel (Unit: Billion VND)12
In the first month of implementation, UPL disbursement was just 20 billion VND, approximately
30% vs target (70 billion VND). This situation is not too hard to understand. Because, in the first
month, VPBank’s partnership development or branches had not been familiar with the program and
12
UPL monthly Report of Retail Banking
61 Chapter 6: Implementation and result | Year 2016 – 2018
MASTER OF MARKETING AND PROSPECTIVE
also partners were still hesitant toward this very new policy and program. However, in the next 2
months, sales performance increase rapily with 43 billion VND in April and 112 billion VND in
May, exceeded the target.
13
UPL monthly Report of Retail Banking
62 Chapter 6: Implementation and result | Year 2016 – 2018
MASTER OF MARKETING AND PROSPECTIVE
Figure 6-5 UPL new customers over 3 months – channels breakdown (Unit: number)14
From March to May 2018, through partnership channels, VPBank welcome 1700 new customers in
terms of UPL product. Among them, over 1600 customers came from low collaboration partners.
Only 85 new customers come from high collaboration partners.
So researcher can temporarily conclude that if VPBank targets to grow disbursement and balance,
they should focus on high collaboration partners. On the contrary, if a large data base of customers
and great growth of new customers are important factor to VPBank, they should aim to medium and
low collaboration partner. Therefore, in the next phase, target of number of partners of 3 levels
collaboration can be revised to fit with VPBank’s goal.
As mentioned in the limitation of study (chapter 1), because of limited time for implemention, the
effectiveness and influence of partnership programs has not been evaluated comprehensively.
However, with this initial result, VPBank can completely believe that they can achieve the target
and contribute to improve UPL sales perforamance in this year.
(1) The study of customer’s behavior is just the initial step. More in-depth research on customers
and partners needs to be continued to get a more in-depth look to build more effective
partnership collaboration program
(2) Partnership marketing program for UPL can be combined with other products such as credit
card, which are suitable for growing based on partnership model
(3) Risk management should be done closely due to the shake hand between VPBank’s sale
staffs and partners’ sale staffs. Especially with UPL, one product with easy loan condition,
high risk.
(4) Apply special approval mechanism for loans through partnership channels (shorten approval
time), especially for customers from high collaboration partners
(5) Training for medium and low collaboration partners should be handed over to branches to
minimize cost and manpower.
Strategic marketing partnerships are not new. It is an inexpensive way to promote brand and product
as long as you do not give more than you get. Akbank’s work with Boyer Fashion Stores, where a
new card targeting the younger, female audience was instantly issued in the outlet in less than 15
minutes and had some fantastic benefits including a non-stop lottery programme. Some 200,000
cards were issued in the first five months of the launch; Barclaycard launched a contactless card
with Orange company – a French multinational telecommunications corporation which allowed
people to control their accounts by being able to set daily, weekly or even category-based spending;
these are outstanding examples for the success of partnership marketing program in banking
industry.
Through our 3-month marketing mission with our VPBank colleagues, we have introduced the
initial proposal for a partnership strategy to sell one of the key products of VPBank - UPL. With the
goal of building a marketing program that links partners to increase sales of UPLs, through the
results I can conclude that the goal of the research task has been fulfilled. Further research and
partnering activities will be further strengthened with greater involvement of headquarters and
business units.
With personal projection, I think that amid strong development of marketing trends, intense
competition among companies and rivals in consumer credit, the partnership opens the door for
opportunities to locate products and brands, helping to find new approaches to VPBank's customers,
emphasizing VPBank's customer oriented approach.
Due to the shortcomings of my expertise, limited financial, time, marketing tasks are facing many
limitations and cannot be applied to become a long-term strategic plan for the whole bank VPBank .
However, with the issues raised in this report and with the support of the Retail Banking Division
managers, the plan will be deepened and adjusted in the coming time.
1. CIA World Factbook - This page was last updated on January 20, 2018
2. Report on consumption loan market in Viet Nam by TPBank:
file:///C:/Users/trangld/Downloads/bao_cao_thi_truong_tai_chinh_tieu_dung%20(1).pdf
3. MW Special Report] Vietnamese consumer finance market
https://thelowdown.momentum.asia/plenty-room-growth-remains-vietnamese-consumer-
finance-market/
4. VPBank monthly report on products
5. VPBank internal document about organization chart
6. http://www.vpbank.com.vn/bai-viet/gioi-thieu-vpbank
7. The gioi di dong annual report 2016: https://mwg.vn/wp-content/uploads/delightful-
downloads/2017/05/MWG_BCTN-2016.pdf
8. VPBank annual report:
http://www.vpbank.com.vn/sites/default/files/pictures/VPBank_AR_2017_Vietnamese_part_1
.pdf
9. The theory of partnership: Why have partnerships by Ronald W. McQuaid, University of
Stirling
- Super market
- Online website
For electronic devices, where did you go to
7 - Shop near house
buy it?
- From friend
- Others
8 For Travel
- Self or tour
8.1 In which form did you go travel?
- If tour: What is the name of travel agency?
- Search on Google: What is the key word
did you use?
How did you find information before
8.2 - Forum, group
deciding to choose that travel agency?
- Referred by friends
- Others
*Note: For other purposes, ask the same to know the name of suppliers and how did the respondent
find the information about suppliers
III. About the loan and bank
How much did you need for the purpose you
9
have mentioned?
10 How much did you borrow, in fact?
How much is your credit limit that you were
11
offered by VPBank?
12 Can you tell me the interest rate of the loan?
In which month, did you have the demand for
13
the loan?
If not VPBank, where did you borrow this - Other bank: Interest rate?
14
money? - Other sources?
15 Who do you first think of when you need an Relatives, friend, pawn service, etc.
With purpose of improving product quality and service in order to bring customers better
experience in the future, we would like to invite you to take 2-3 minutes to take participate in the
survey from VPBank. We affirm that your identity will be kept absolutely confidential.
This survey is conducted by an independent party. Therefore, the results of the survey will not affect
the credit monitoring process and the approval of your current or future credit.
Date_ _/ _ _/ 2018
3 Where do you usually buy machine, equipment for your business? (Multiple choice)
□ Others (detail)
□ Friend referral
□ Other (detail)
□ Other (detail)
6 What is the monthly purchase frequency? (only 1 answer)
□ 1 times/ 2 months
Skip to part K
D House construction
In case you borrowed to repair your house, please indicate the specific purpose (multiple
1
choices)
□ Raw building
□ Paint
□ Other: Detail...........................
□ Did not
□ Partially used
□ Other: Detail...........................
4 How do you find information about the sellers? (Multiple choice)
□ Friend referral
□ Other (detail)
Skip to part I
E MUA XE MÁY
□ Honda
□ Piaggio
□ Yamaha
□ Ducati
□ Suzuki
□ Kawasaki
□ Other: detail..........................
3 How did you find information about motorbike seller? (multiple choice)
Skip to part I
F Wedding
□ No
□ Yes
□ Wedding banquet
□ Honey moon
□ Wedding room interior
□ Wedding photo album
□ Other: Detail........................................
□ Friend referral
□ Other (detail)..................
Skip to part I
G Medical/Beauty
1 What was the specific purpose that you borrowed money for? (multiple choice)
□ Health healing
□ Cosmetic surgery
□ Other (detail)..................
□ State hospital
□ Private hospital
□ Foreign hospital
□ Other: detail......................
3 How did you find information about that medical facility? (multiple choice)
□ Friend referral
□ Other: detail...................
Skip to Part I
K Personal hobbies
1 What was the specific purpose that you borrowed money for? (1 answer)
□ Other: detail.................................
□ Website online
□ Other: detail.................................
□ No
□ Yes
How did you find information about products/services supplier for your need? (multiple
4
choice)
□ Google search (specify which key words to use to search)
□ Suppliers' official website
Skip to part I
I General questions
How much did you need to borrow for the purpose you have mentioned above?
1
...............................................
Demographic
Age: ......................................
Income: ...................................