USING BRAND AS AN EFFECTIVE WEAPON TO COMPETE IN THE MARKET: A CASE STUDY OF NHAT LINH COMPANY

USING BRAND AS AN EFFECTIVE WEAPON TO COMPETE IN THE MARKET:
A CASE STUDY OF NHAT LINH COMPANY

by

Duong Manh Cuong

A research study submitted in partial fulfillment of the requirements for the degree of Master of
Business Administration.

Examination Committee

Dr. Truong Quang (Chairman)
Dr. Hans Stoessel
Dr. Clemens Bechter

Nationality

Vietnamese

Previous Degree:

Bachelor of Engineering
Hanoi University of Transport & Communications
Hanoi, Vietnam

Scholarship Donor

The Government of Switzerland/Swiss Development
Cooperation (SAV)

Asian Institute of Technology
School of Management
Bangkok, Thailand
April 2001


ACKNOWLEDGEMENTS

I wish to express my profound gratitude and great appreciation to my advisor Dr. Truong Quang for
his valuable guidance, advice and encouragement throughout the research study.
Special thanks are extended to the other members of the Examination Committee, Dr. Hans
Stoessel and Dr. Clemens Bechter for taking interest and giving valuable suggestions to improve
the content of this study.
Deep appreciation and thanks are also extended to Mr. Nguyen Van Dong Assistant Manager, Mr.
Nguyen Van Bien, Deputy Manager, and Ms. Nguyen Thu Phuong of Nhat Linh Co. Ltd. for
providing me the needed information and data to complete this research study.
Last but not least, I would like to thank the government of Switzerland for providing me a full
scholarship to study at SAV in HCMC, Vietnam and at School of Management in Bangkok,
Thailand.


ABSTRACT

In a market economy, the success or failure of the companies depends on how they fulfill
consumers’ needs and wants. In a fierce competition environment, companies must compete with
each other in terms of price, quality, services, technology, innovation, and brand name, etc. To
differentiate their products from other competitors’, companies often create brand names for their
products or their corporate. Therefore, branding has become an essential means for companies to
survive and develop in the long term.
In case of wide product portfolio, “branding” even replaces “marketing” activities. Many

companies recognize that branding is the most effective weapon to win consumers’ purchasing
decision. Indeed, attracting consumers becomes a very difficult task for any company in a highly
competitive market.
Although a company gets many benefits from its brand name, it is not easy to manage a strong
brand. To understand more how a company builds and manages its brand to get the full benefit
from it, a study into the case of the LiOA brand at Nhat Linh Co., Ltd., an auto voltage stabilizer
(AVS) manufacturer, is undertaken.
The case study will focus on analyzing the external market environment, the company internal
situation and its brand development and management basing on interviews with the Company
managers and its employees. At the same time, a customer survey is carried out to evaluate what
consumers know about LiOA’s brand name and products. From the analysis of the survey results,
some recommendations for LiOA branding management and communication program will be made
to help the Company manage its brand better and to strengthen its LiOA brand name in the AVS
market.


TABLE OF CONTENTS

Chapter 1--------------------------------------------------------------------------------------------------------1
Introduction-----------------------------------------------------------------------------------------------------1

1.1 Rationale of the Research.........................................................1
1.2 Problem Statement...................................................................1
1.3 Objectives of the Research........................................................1
1.4 Research Methodology..............................................................1
1.5 Scope and Limitations of the Research.....................................3
1.6 Structure of the Research Report..............................................3
Chapter 2--------------------------------------------------------------------------------------------------------4
Literature Review----------------------------------------------------------------------------------------------4

2.1 Introduction............................................................................. 4
2.2 What is a Brand?......................................................................4
2.3 The Importance of Brand Name................................................5
2.3.1 The main contribution of brands...................................................5
2.3.2 A brand is more than a product....................................................6
2.4 The Brand Equity....................................................................... 7
2.5 Brand Identity........................................................................... 7
2.5.1 Definition ...................................................................................7
2.5.2 The brand position trap................................................................8
2.5.3 Four brand identity perspectives...................................................8
2.5.4 The identity structure...................................................................9
2.6 Value Proposition......................................................................9
2.7 Strategic Brand Management..................................................10


2.8 Brand position......................................................................... 12
2.9 Communication Program.........................................................13
2.10 Brand Leverage..................................................................... 13
2.11 Important Factors For Building Strong Brands.....................14
Chapter 3-------------------------------------------------------------------------------------------------------15
ANALYSIS OF THE COMPANY CURRENT SITUATION------------------------------------------15

3.1 External Environment Analysis................................................15
3.1.1 Macro Environment..............................................................15
3.1.2 The Industry Environment..........................................................17
3.2 Internal Analysis..................................................................... 20
3.2.1 Company Overview....................................................................20
3.2.2 Company Performance...............................................................21
3.2.3 Strategic intent..........................................................................22
3.2.4 Company Structure....................................................................24

3.2.5 Company resources and core competencies.................................24
3.3 SWOT Analysis......................................................................... 30
Chapter 4-------------------------------------------------------------------------------------------------------31
Company’s Brand Management----------------------------------------------------------------------------31

4.1 LiOA’s Positioning ...................................................................31
4.1.1 The AVSs Market......................................................................31
4.2 Brand Analysis.........................................................................32
4.2.1 The origin of the name...............................................................32
4.2.2 LiOA symbol..............................................................................32
4.2.3 Trade mark protection................................................................33
4.2.3 Advertising activities..................................................................33
4.3 Brand Management ..............................................................34
4.4 Brand Leverage And Extension...............................................34


4.4 The Company’s Brand Intention..............................................35
4.4 Conclusion............................................................................... 35
Chapter 5-------------------------------------------------------------------------------------------------------36
findings OF the Customer survey---------------------------------------------------------------------------36

5.1 Overview of the Sample’s Characteristics...............................36
5.2 Consumers’ Brand Awareness and their Behavior..................36
5.2.1 Brand awareness.......................................................................36
5.2.2 Brand choice..............................................................................37
5.2.3 Factors Affecting Consumers Choices of AVS Brand......................38
5.3 Questions Relating To LiOA Products .....................................39
5.3.1 LiOA name................................................................................39
5.3.2 Country of origin........................................................................40
5.3.3 LiOA knowledge information sources...........................................40

5.3.4 LiOA usage ...............................................................................41
5.3.5 Consumers’ evaluation of LiOA AVS.............................................41
5.3.6 Price of LiOA AVSs.....................................................................42
5.3.7 LiOA shops convenience ............................................................42
5.3.8 LiOA advertisement contents......................................................42
5.3.9 LiOA promotion program............................................................43
5.4 Conclusion.............................................................................. 43
Chapter 6-------------------------------------------------------------------------------------------------------45
Developing a Branding strategy for LiOA-----------------------------------------------------------------45

6.1 Developing LiOA Brand Identity..............................................45
6.1.1 The brand as a product..............................................................45
6.1.2 The Brand-as-organization..........................................................46
6.1.3 The Brand-as-person: Brand personality......................................46
6.1.4 Band as a symbol.......................................................................46
6.2 Brand Value Proposition..........................................................46
6.2.1 Functional benefits.....................................................................46
6.2.2 Emotional benefits.....................................................................47
6.2.3 Self-expressive benefits..............................................................47


6.3 Brand Anatomy of LiOA ..........................................................47
6.4 LiOA Brand Position.................................................................48
6.5 Branding activities in line with its intention strategies..........48
6.5.1 Consolidate LiOA brand name in the North..................................48
6.5.2 Expand its market share and brand awareness in the South.........50
6.5.3 LiOA expansion to other foreign markets.....................................51
6.5.4 LiOA CABLE branding ................................................................51
Chapter 7-------------------------------------------------------------------------------------------------------52
Conclusion and recommendations--------------------------------------------------------------------------52

7.1 Conclusions............................................................................. 52
7.2 Recommendations...................................................................53
References-----------------------------------------------------------------------------------------------------55
APPENDIX-----------------------------------------------------------------------------------------------------1


LIST OF TABLES
Table 2.1 The Brand Position Trap--------------------------------------------------------------------------8
Table 3.1: Vietnam’s Economic Indicators----------------------------------------------------------------15
Table 3.2: Summary of the Business Opportunities and Threats----------------------------------------20
Table 3.3: LiOA AVS Current Product Line--------------------------------------------------------------21
Table 3.4: Sales Performance of Nhat Linh Co. Ltd., 1996-2000---------------------------------------22
Table 3.5: Summary of the Company’s Strengths and Weaknesses -----------------------------------29
Table 3.6: SWOT Analysis Summary----------------------------------------------------------------------30
Table 5.1: Factors Affecting Consumers Choices of AVS Brand---------------------------------------38
Table 5.2: Respondent’s Evaluation of LiOA AVSs-----------------------------------------------------41
Table 5.3: Respondents’ Evaluation of LiOA Advertisement Contents--------------------------------43

LIST OF FIGURES
Figure 1.1: Research Framework-----------------------------------------------------------------------------2
Figure 2.1 A Brand Is More Than a Product----------------------------------------------------------------6
11
Figure 2.2: The Brand Management Process--------------------------------------------------------------11
Figure 2.3 : A Variety of Ways of Leveraging Brand----------------------------------------------------13
Figure 3.1: Changes in Foreign Direct Investment-------------------------------------------------------16
Figure 3.2: Nhat Linh Company’ s Organizational Chart------------------------------------------------24
Figure 4.1 LiOA Logo---------------------------------------------------------------------------------------33
Figure 5.1: Respondent’s Awareness about AVS Brands------------------------------------------------37
Figure 5.2: Brand Selection of Respondents---------------------------------------------------------------37

Figure 5.3: Information Source for Knowing LiOA------------------------------------------------------40


Figure: 6.1 LiOA Brand Anatomy--------------------------------------------------------------------------48
Figure 7.1 The Proposed Model for Strategic Brand Management Process---------------------------54


Chapter 1
INTRODUCTION
1.1

Rationale of the Research

In a market economy, the success or failure of the companies depends largely on how
companies fulfill consumers’ needs and wants. If the products or services meet the consumers’
needs (physical and emotional), consumers will be satisfied. Once they are satisfied with the
products, they will continue to buy or refer to other consumers by means of “word-of-mouth”.
As a result, the companies will enjoy a long-term profitability and customer’s loyalty.
In a fierce competition environment, companies must compete with each other in terms of price,
quality, services, technology, innovation, and brand name, etc. To differentiate their products
from other competitors, companies often create brand names for their products or their
corporate. Consumers are made aware of the products by their brand names with unique,
distinctive and particular characteristics. In this case, the choice of a customer for a product,
then, is a result of brand recognition for quality or uniqueness of the company’s offer.
Therefore, branding has become an essential means for companies to compete with other
competitors. In case of wide product portfolio, “branding” even replaces “marketing” activities.
Many companies recognize that branding is the most effective weapon to win consumers’
purchasing decision. Indeed, attracting consumers becomes a very difficult task for any
company in a highly competitive market.
Although a company gets many benefits from its brand name, it is not easy to create and

maintain a strong brand. To understand more how a company builds and manages its brand to
get the full benefit from that, a study into the case of LiOA brand at Nhat Linh Co. Ltd., an auto
voltage stabilizer (AVS)manufacturer is carried out.
1.2

Problem Statement

To compete with other competitors in automatic voltage stabilizer market, Nhat Linh Company
has to build its own brand name and manage it well. This study will see how the Company
manages its brand as an effective weapon to compete with other competitors.
1.3

Objectives of the Research

This study focuses on analyzing brand management of the Company. Its specific objectives are:
•

To analyze the external market environment of the auto voltage stabilizer industry and the
Company situation.

•

To analyze the current Company branding management process .

•

To survey customer’ attitudes towards the Company’s brand/products.

•

To recommend a brand strategy and marketing communication program for the Company.

1.4

Research Methodology

The conceptual framework of the study can be illustrated by the Figure 1.1

1


Literature Review
Literature Review

SWOT Analysis
SWOT Analysis

Company Branding
Company Branding

Consumer Survey
Consumer Survey

Develop a Branding Strategy
Develop a Branding Strategy

Conclusion &Recommendations
Conclusion &Recommendations
Figure 1.1: Research Framework
Data collection: Data for the study were collected from two sources:

•

Primary data: The primary data were gathered through direct in-depth interviews with the
Company’s Board of Directors, Marketing Managers, and other key staff members of the
Company. In addition, a survey by questionnaire was conducted to evaluate the consumers’
attitudes toward the Company’s brand/products. The number of questionnaires sent out was
200. Both buyers and non-buyers of the Company’s products are respondents of the survey.

•

Secondary data: relevant data on the current market and possible target market of the
Company and competition were collected from public media, the Ministry of Planning and
Investment, Vietnam Chamber of Commerce and Industry, from the Internet, and other
sources.

Data analysis:
Qualitative analysis was done for secondary data and primary data collected from interviews.
Quantitative analysis was done for primary data collected from the questionnaire survey in
order to evaluate consumer’s brand awareness, factors affecting their purchase decision, and
their attitudes towards LiOA’s AVS products. The software SPSS 10.0 was used to process
quantitative data.

2


1.5

Scope and Limitations of the Research

Though the Company’s products are available throughout the country, the customer survey was

done in Hanoi and its vicinity only, as Hanoi represents one of the two main markets of the
AVS products.
The research have some limitations due to following reasons: (i) Relevant data collected from
different sources may be inconsistent. (ii) It is difficult to get some sensitive information from
the Company’s managers. (iii) It is difficult to get an overall picture of the attitude of
consumers throughout the country towards the Company products when the customer survey is
only conducted in Hanoi.
1.6

Structure of the Research Report

The research report will be organized as follows:
Chapter 1: A general introduction, comprising rationale, identification of the problem,
objectives, methodology of the research study and its scope and limitations.
Chapter 2: Literature review.
Chapter 3: Analysis of the external environment and the Company’s strengths and weaknesses.
Chapter 4: The Company’s current branding situation.
Chapter 5: Findings of the survey on customer’s attitude towards the Company’s product.
Chapter 6: Developing a branding strategy for the Company.
Chapter 7: Conclusion and recommendations.

3


Chapter 2
LITERATURE REVIEW
2.1

Introduction

An increasing number of the world’s most influential companies have recognized the enormous
value of their brands. Well-developed bands have become an effective strategic weapon to win
consumer’s heart and mind. This applies for all companies, big and small alike.
Branding has become much more important recently because of the proliferation of choice that
is made available to consumers. To have competitive advantage within the whole industry, the
successful corporation should have not only good quality of products, services above other
competitors but also good image in the consumers' mind. That is brand name. Brand name
makes the company’s product distinctive from those of competitors.
This chapter will review the literature involving building and maintaining brand. The chapter
will also highlight the importance of branding in the marketplace.
2.2

What is a Brand?

There are many definitions of “brand”. Following are some of them:
Kotler (2000) defines a brand as “a name, term, sign, symbol, or design, or a combination of
them, intended to identity the goods or services of one seller or group of sellers and to
differentiate them from those of competitors.”
According to Hankinson and Cowking (1996), a brand is a simply a product or service
which can be distinguished from its competitors. The distinctiveness reflects a brand’s
positioning relative to the competition and by its personality. Successful brands are those
which meet the needs and aspirations of a defined target market.
Kapferer (1992) makes a clear distinction in writing that, “products are what the company
makes; what the customer buys is a brand.” Therefore brand can be understandable as the
product in the customer viewpoint. A brand is landmark. Buyers are actually purchasing a
position in the minds of potential customers be in the stalls or in the royal circle.
Arnold (1992) comments that brand is the personality or identity of a product, range of
products or an organization, derived from consumer perception of both tangible and
intangible attributes. Brands are recognized and understood on an emotional level, in a way
that most of their founders would find astonishing.

Tennant (1994) also has a similar definition of a brand as a sign of identification, the label
that differentiates your product from those of your competitor. A brand also can act as a
type of shorthand encapsulating the key features of the product such as its image, use and
price in an easily recognized and remembered form.
In short, all these authors agree that a brand identifies the seller or maker. Like identification
cards, it is a way of differentiating the company’s product from those of another company. This
becomes the increasingly important issue in fiercer competition nowadays, where consumers
always have a greater choice of offers.

4


2.3

The Importance of Brand Name

2.3.1 The main contribution of brands
As stated earlier, many companies have recognized brands as a powerful strategic weapon.
Power brands can provide their owners with considerable rewards if handled correctly and
managed sensibly. They can ensure a growth in market share and corporate profitability.
Stobart (1994) points out three reasons why brands play an important role to their owners:
•

To serve as a focus for consumer loyalty. Thus, they can be developed into assets that
generate steady and reliable streams of cash flow. They help to guard against competitive
encroachment.

•

To capture the promotional investment put into it. Enormously valuable brands like Coca,

Kodak, Pepsi and Marlboro are still benefiting massively from the past huge advertising.
This ability to capture promotional investment is in direct contrast to what happens with
generic goods or commodities, which have no brand name or image.

•

To be of critical strategic importance to their owners. In fact, brands enable manufacturers
to communicate directly with consumers regardless of the actions of the middleman. This
communication gives their producers power toward retailers.
Temporal (2000) indicates the benefits of power brands towards companies and consumers
as bellows:
The market power of brands: Here are some ways in which strong brands can transform
ordinary businesses into elite ones

•
•
•
•
•
•
•

Survival in adverse condition
Longevity
Transportability across national cultures
Greater distribution power
Crossing market boundaries
Staff motivation, recruitment and loyalty
Moving away from commodity status

The financial rewards of brands: Powerful brands provide long-term security and growth,
higher sustainable profits, and increased asset value because they achieve:
•
•
•
•
•

Competitive differentiation
Premium prices
Higher sales volumes
Economies of scale and reduced costs
Greater security of demand

5


For consumers, they buy branded products because of the following reasons:
• Brands generate choice
• Brands simplify decisions
• Brands offer quality assurance and reduce risks
• Brands help self-expression
• Brands offer friendship and pleasure
2.3.2 A brand is more than a product
Brand is more than a product. Branding is about the way people perceive, not about the
products in isolation (Aaker, 1996).
A brand represents a pact between brand owner and consumer. Brand allows consumers to shop
with confidence in what is an increasingly complex world. The brand offers the consumer a
guarantee of quality, value and product satisfaction.
Products cannot speak for themselves. The brand is what gives them meaning and speaks for

them. Figure 2.1 describes all possible attributes of a brand.
The most important attribute of a successful brand is, of course, the product itself. Creating a
brand image for a product, which does not match the consumers’ expectation, is a formula for a
certain failure (Tennant, 1994).
However, non-tangible factors have come to play an increasingly important role. Recently, the
way in which branded products or services have been distinguished from one another has
increasingly concerned non-tangible factors rather than tangible factors. Therefore, branding
has become a highly skilled and specialized discipline. It concerns with managing and
maintaining a mix of factors, both tangible and intangible to attract consumer loyalty (Stobart,
1994).
BRAND
BRAND
Organizational
Associations

Brand
Personality

PRODUCT

Country of Origin

Scope
Attributes
Quality
Uses

User Imagery
Self-Expressive
Benefit

Symbol
Brand-Customer
Relationships

Emotional
benefit

Figure 2.1A Brand Is More Than a Product
Source:

Aaker (1996)
6


2.4

The Brand Equity

Upshaw (1995) defines “the brand equity is the total accumulated value or worth of a brand; the
tangible and intangible assets that the brand contributes to its corporate parent both financially
and in terms of selling leverage.”
Brand equity can be defined as the added value provided to a product or company by its brand
identity. It is the set of associations and behaviors that increase or decrease the value of the
brand compared to its financial value alone (Pettis, 1995).
It is pointed out that brand equity does not just happen; it is a combination of quality product,
advertising, marketing programs, point-of-sale programs - a bundle of consumer experiences
that create the ultimate brand image. It requires a long sophisticated process of the brand
building and maintaining.
According to Kotler (2000), a brand can convey up to six levels of meaning. There are

attributes, benefits, values, culture, personality and users. The challenge in branding is to
develop a deep set of meaning for a brand, it is called as a deep brand; otherwise it is a shallow
brand. For instance, Mercedes is a deep brand because we understand its meaning along all six
dimensions.
This author also suggests five measurements of brand equity. Brands vary in the amount of
power and value they have in the marketplace:
•

Brand unawareness: most buyers in the marketplace do not know that brand.

•

Brand awareness: brands for which buyers have fairly known (measured either by brand
recall or recognition).

•

Brand acceptability: most consumers would not resist buying these brands.

•

Brand preference: brands that are enjoy a high degree of brand preference. Consumers
would select those brands over the others.

•

Brand loyalty: brands command high degree of brand loyalty. The loyal consumer will walk
out of the store to buy it elsewhere in case of stock-out of his favorite brand.

It is noted that brands have become tradable assets. There have been many big mergers and

acquisitions over last decades. In most cases, the price of the acquired company highly exceeds
its tangible assets (example the cases of Nestle and Rowntree). It is reasonable to think that the
extra value comes from the company’s brand.
2.5

Brand Identity

2.5.1 Definition
A brand identity provides direction, purpose and meaning for the brand. Aaker (1996) gives a
variety of definitions of brand identity such as:
•

Brand identity is a unique set of brand associations that the brand strategist aspires to create
or maintain. These associations represent what the brand stands for and imply a promise to
customers’ form the organization member.

•

Brand identity should help establish a relationship between the brand and the customer by
generating a value proposition involving functional, emotional or self-expressive benefits.

7


•

Brand identity consists of twelve dimensions organized around four perspectives - the
brand-as-product, brand-as-organization, brand-as-person, and brand-as-symbol.

•

Brand identity structure includes a core, extended and proposition identity. A brand identity
is to brand strategy what “strategic intent” is to a business strategy. Strategy intent involves
an obsession with winning real innovation, stretching the current strategy and a forwardlocking dynamic perspective.

2.5.2 The brand position trap
A brand position has been defined as “the part of the brand identity and value proposition that is
to be actively communicated to the target audience and that demonstrates an advantage over
competing brands”.
Thus, the brand position guides the current communication programs and is distinct from the
more general brand identity construct. There is a distinction between three related constructs as
illustrated in the Table 2.1.
The brand position trap occurs when the research for a brand identity becomes a search for a
brand position, stimulated by a practical need to provide objectives to those developing the
communication programs. The goal becomes an advertising tag line rather than a brand identity.
Table 2.1 The Brand Position Trap
Brand Image

Brand Identity

Brand Position

How the brand is
now received

How strategists want the
brand to be perceived

The part of the brand identity and
value proposition to be actively

communicated to a target audience

Source: Aaker (1996)
2.5.3 Four brand identity perspectives
Aaker (1996) classifies brand identity into 4 categories:
(1) The brand-as-product
Although strategists should avoid the product-related associations, they remain to be an
important part of a brand identity as they are directly linked to brand choice decisions and the
use experience. Product-related associations may comprise product-scope, product attributes,
quality/value, uses, users and country of origin.
(2) The brand-as-organization
The brand-as-organization perspective focuses on attributes of the organization rather than
those of the product or service. Such organizational attributes as innovation, a drive for quality,
and the concern for the environment are created by the people, culture, values, and programs of
the company. Organizational attributes are more enduring and more resistant to competitive
claims than are product attributes. It is difficult to duplicate an organization with unique people,
values, and programs. These attributes may apply to a set of product classes.

8


(3) The brands-as-person: brand personality
The brand-as-person perspective suggests a brand identity that is richer and more interesting
than one based on product attributes. Like a person, a brand can be perceived as being upscale,
competent, impressive, trustworthy, fun, active, humorous, casual, formal, youthful, or
intellectual. A brand personality can create a stronger brand in several ways. First, it can help
create a self-expressive benefit that becomes a vehicle for the customer to express his or her
own personality. Second, brand personality can be the basis of a relationship between the
customer and the brand. Third, a brand personality may help communicate a product attribute
and thus contribute to a functional benefit.

(4) The brand-as-symbol
A strong symbol can provide cohesion and structure to an identity and make it much easier to
gain recognition and recall. Its presence can be a key ingredient of brand development and its
absence can be substantial handicap. Symbols involving visual imagery can be memorable and
powerful. A strong symbol can be the cornerstone of a brand strategy.
2.5.4 The identity structure
Brand identity consists of a core identity and an extended identity. In addition, the identity
elements are organized into enduring patterns of meaning, often around the core identity
elements (Aaker, 1996).
(1) Core identity
The core identity represents the timeless essence of the brand, which contains the associations
that are most likely to remain constant as the brand enters to new markets and products classes.
In addition, the core identity for a strong brand should be more resistant to change than
elements of the extended identity. Ultimately, the core identity follows from the answers to
some tough, introspective questions, such as:
•
•
•
•

What is the soul of the brand?
What are the fundamental beliefs and values that drive the brand?
What are the competencies of the organization behind the brand?
What does the organization behind the brand stand for?

(2) Extended Identity
The extended brand identity includes elements that provide texture and completeness. It fills in
the picture, adding details that help portray what the brand stands for. Important elements of the
brand’s marketing program that have become or should become visible associations can be
included. A brand personality does not often become a part of the core identity. However, it can

be exactly the right vehicle to add needed texture and completeness by being part of the
extended identity (Aaker, 1996).
The extended brand identity may include product scope, retail experience, slogan, logo,
personality, and relationship.
2.6

Value Proposition

Aaker (1996) stated that “a brand’s value proposition is a statement of the functional, emotional
and self-expressive benefits delivered by the brand that provide value to customer. An effective
value proposition should lead to a brand-customer relationship and derive purchase decision.”
9


Propositioning is a description of an appeal of a brand to its consumers. It offers the reason why
a consumer might prefer the brand. There are three types of benefit, which brand name
product/service can bring to consumers:
•

Functional benefit: The benefit based on a product attribute that provides functional utility
to the consumer. Such a benefit will usually relate directly to the functions performed by the
product or service for the customer. The functional benefits have limitation of failure to
differentiate, easy to copy. Other benefits attributes can overcome those limitations.

•

Emotional benefit: When the purchase or use of a particular brand gives the customer a
positive feeling, that brand is providing an emotional benefit. It adds richness and depth to
the experience of owning and using the brand.

•

Self-expressive benefit: A brand can provide a self-expressive benefit by providing a way
for a person to communicate his or her self-image.

For each individual, the people will have an associated self-concept and a need to express that
self-concept. The purchase and use of brands is one way to fulfill this need for self-expression.
For example, using a positioned brand name products/ service with strong personality
associated with a visible athlete generates self-expression (Aaker, 1996).
2.7

Strategic Brand Management

Brand management is above all about balancing variety of inputs. Balances have to be struck
between the external market and internal capabilities of the company; between the company’s
inputs into the product and the influences on the consumer perception; between the short-term
need to maximize profit and the long-term need to invest and develop (Arnold, 1992).
This author also suggests a model for the brand management process containing five steps as
illustrated in Figure 2.2.
This model describes the brand management process as an incremental one, which stands at the
junction of company and consumer. Brand management encompasses all steps of this process.
Step 1: Market analysis
Basic market analysis is above all the tracking of trends. Information must be gathered
continuously, like military intelligence. A company must understand the following aspects of its
territory:
•
•
•
•

The size and scope of the market;
The segment in the market;
The players in the market and their positions;
The trends in all these areas.

10


Market Analysis
Market Analysis
Market definition
Market definition
Market segmentation
Market segmentation
Competitor positions
Competitor positions
Trends
Trends
Market Analysis
Market Analysis
Brand personality/
Brand personality/
Individual
Individual

Targeting Future Positions
Targeting Future Positions
Future development/
Future development/
Brand strategy

Brand strategy

Testing New Offers
Testing New Offers
Individual elements of mix
Individual elements of mix
Test markets (total offer)
Test markets (total offer)

Planning & Evaluating Performance
Planning & Evaluating Performance
Level of expenditure
Level of expenditure
Type of support activity
Type of support activity
Measurement against objectives
Measurement against objectives

Figure 2.2: The Brand Management Process
Source:

Arnold (1992)

Step 2: Brand situation analysis
Brand situation analysis should produce:
• An in-depth understanding of the brand personality and values;
• A picture of the brand anatomy, and how its attributes are contributing to its overall
position;
• The same information for competitors brands.
Step 3: Targeting future position

The strategy formulation phase should produce:
• A view on the future character of the market;
• A strategy outlining the future targeted brand position;
• Benefits offered;
• Brand personality development;
• Scope of brand;
• Target segment.
11


Step 4: Testing new offers
The practice of advance testing is designed to do the following:
• Gain understanding of contribution of individual brand attributes to the overall position;
• Assess how changes to any element of the brand will influence its position;
• Test the total brand proposition when attacking new markets or after fundamental change.
Step 5:

Planning and evaluating performance

Planning and tracking activities are designed to provide the following:
• A clear plan for timing and objectives (in consumer terms) of marketing activity;
• A basis for judging the level of activity and in particular the level of expenditure necessary
to achieve those objectives;
• A program of evaluation mechanisms to monitor progress;
• A basis for continuing market analysis.
2.8

Brand position

Brand position is the part of the brand identity and value proposition that is actively

communicated to the target audience and that demonstrates an advantage over competing
brands.
The four salient characteristics of a brand position as reflected by the phrases “part,” “target
audience,” “actively communicated,” and “demonstrates advantage.”
(1) A part of the identity/value proposition
When a brand position exists, the brand identity and value proposition can be developed fully,
with texture and depth. They do not have to be concise statements of what is to be
communicated, because the brand position takes on that role.
Brand position can be changed without changing the identity or value proposition of which it is
a subset. The brand position includes the core identity, points of leverage within the identity
structure, and the value proposition (benefits that drive relationships).
(2) The target audience
The brand position should also target a specific audience, which may be a subset of the brand’s
target segment. There can also be a primary and secondary target audience.
(3) Active communication
That implies that there will be specific communication objectives focused on changing or
strengthening the brand image or brand-customer relationship. These objectives, if feasible,
should be accompanied by measurement.
Brand image reflects current perceptions of a brand. Like brand identity, brand position is more
aspirational, reflecting perceptions that strategists want to have associated with the brand.
Comparison of the identity with image will usually result in one of three different
communication tasks being reflected in brand position statement: augmenting an image,
reinforcing an image or diffusing an image.
(4) Demonstrate an advantage
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Finally, brand position should demonstrate an advantage over competitors. The bottom line is
that the position should specify a point of superiority that is a part of the value proposition. The
point of advantage should resonate with customers and be differentiating-that is, represent

something different from what competitors provide.
2.9

Communication Program

The communication program consists of the following activities (Kotler, 2000)
1.
2.
3.
4.
5.
6.
7.
8.

Identifying the target audience
Determining the communication objectives
Design the message
Select communication channels
Establish the total marketing communications budget
Decide on the communication mix
Measure the communications’ results
Manage the integrated marketing communication process

2.10 Brand Leverage
One recipe for strategic success is to create and leverage assets. With its awareness, perceived
quality, associations and customers loyalty, a brand is usually the most powerful asset that a
firm owns. A strategic question, then, is how that brand can be leveraged to create larger and
stronger business entities.
LEVERAGING

LEVERAGING
THE BRAND
THE BRAND

Line Extensions
Line Extensions
in existing
in existing
Product Class
Product Class

Stretching the
Stretching the
Brand Vertically
Brand Vertically
in existing
in existing
Product Class
Product Class

Stretching
Stretching
Down
Down

Brand
Brand
Extensions
Extensions in
in

different Product
different Product
Class
Class

Stretching
Stretching
Up
Up

Ad Hoc
Ad Hoc
Brand
Brand
Extensions
Extensions

Co-Branding
Co-Branding

Creating aa
Creating
Range Brand
Range Brand

Figure 2.3 : A Variety of Ways of Leveraging Brand
Source: Aaker (1996)

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2.11 Important Factors For Building Strong Brands
To make brands strong, the following guidelines in order should be implemented (Aaker, 1996)
1. Brand identity
2. Value proposition
3. Brand position
4. Execution
5. Consistency over time
6. Brand system
7. Brand leverage
8. Tracking brand equity
9. Brand responsibility
10. Invest in brands

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Chapter 3
ANALYSIS OF THE COMPANY CURRENT SITUATION
3.1

External Environment Analysis

A company’s external environment consists of the industry environment in which the Company
competes and the country in which it is located. In this chapter, factors influencing AVS
industry will be considered.
3.1.1 Macro Environment
Economic Environment
In an effort to overcome the currently stagnant trend and try to boost the economic growth of
the country, the Vietnamese government has implemented the open-door and reform policy

since 1986. As a result, the country has achieved considerable economic development since
then.
From its low level of GDP growth of 4% in 1987, the annual growth rate increased to 8-9%
since the early 1990s, averaging 7.3 percent annually for the past decade. Due to the Asian
financial crisis, however, the GDP growth fell to 5.8 and 4.7 percent in 1998 and 1999,
respectively. In 2000, the GDP increased to 6.75%, signaling the beginning of a recovery period
(Vietnam Statistics Office, 2000).
Table 3.1: Vietnam’s Economic Indicators
Economic indicators

1993

1994

1995

1996

1997

1998

1999

2000*

GDP growth rate (%)

8.1

8.8

9.0

9.3

8.8

5.8

4.7

6.75

GDP (US$ billion)

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17.7

19.4

21.2

23.1

24.4

25.5

30.2

Export Growth rate(%)

N/A

N/A

N/A

36.6

26.6

1.9

23.1

20.2

Import Growth rate(%)

N/A

N/A

N/A

33.2

4.0

-0.8

0.9

26.5

Inflation rate (%)

5.2

14.4

12.7

4.5

3.6

8.2

0.1

-0.5

Exchange rate (VND/US$)

10,800 11,000 11,200

11,100

13,000 14,000 14,040

14.560

Source: General Statistic Office, (2000) and (*) Vietnam Venture Group, (2001)
For many years, the inflation rates have been kept under control. From 800% in 1987, the
inflation rate was brought down to a reasonable level (Table 3.1). In 1999, the inflation rate was
further decreased to 0.1% and -0.5% in 2000. That was caused by low purchasing power of
Vietnamese people.
After a booming period from 1988 to 1996, foreign direct investment (FDI) has decreased since
1997 (Figure 3.1). This downturn has affected the economic growth and development in recent
years.

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9000
8000
7000
6000
5000
4000
3000
2000
1000
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Number of projects

Registered capital (million US$)

Figure 3.1: Changes in Foreign Direct Investment
Source: Data of 1988 to 1997: MPI, 1998; Data of 1998-2000: Nguyen, 2001.

In deed, the Asian financial crisis forced a number of foreign investors in Vietnam to withdraw
or restructure their business. In addition to numerous high risks associated with the Vietnamese
market (e.g. poor infrastructure and a lack of transparency in the legislative system), foreign
investors are generally becoming more prudent in direct investment. The slowdown in FDI
activities is negatively affecting the demand for industrial AVSs, as foreign investors used to
buy a large amount of AVSs for their investment projects.
Another important event is that Vietnam is expected to join AFTA in 2003, i.e. the tariffs for
many import and export products will be removed or reduced. On the one hand, it will be much
easier for companies to import materials with lower prices and expand its market to other
neighboring countries. The competition will be stronger as foreign competitors will also extend
their market to other countries. Therefore, private enterprises can favorably expand its market
internationally. They, however, have to prepare for coping with future foreign competitors.
The analysis of the economic environment has shown that Vietnam’s economy has slowed
down since 1997. This results in a slow growth of some industries like construction, and of
the purchasing power of Vietnamese consumers. Therefore, this may in turn cause low
demand for electric home appliances as well as AVSs. From 2003 on, private enterprises
will be able to expand their market to other countries, as a result of Vietnam joining AFTA
but to do so they also have to cope with fierce competition from foreign producers.
Demographic and Social Environment
With the population of around 80 million at present (General Statistics Office, 2000), Vietnam
is among the most populous countries in the world. Its urban population is 23.5% in 1999
(19.4% in 1989 census), and the urbanization rate is still on the rise due to the current
industrialization drive of the country.
The educational levels of the Vietnamese people have been increased together with their income
per capita also increases, especially in large cities such as Hanoi and Ho Chi Minh Cities. In

addition, the number of personal computers has been increased rapidly, which heighten the
demand for AVS and UPS.

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