Developing the business of commodity future contract at Techcombank - from a marketing perspective : Luận văn ThS. Kinh doanh và quản lý: 60 34 05

VIETNAM NATIONAL UNIVERSITY, HANOI
SCHOOL OF BUSINESS

M

— H S 13 —

1 H A D K R S M i P KX C » I I hNCfc

Nguyen The Tung

DEVELOPING THE BUSINESS OF COMMODITY FUTURE CONTRACT
AT TECHCOMBANK - FROM A MARKETING PERSPECTIVE

Major: Business Administration
Code: 60 34 05

MASTER OF BUSINESS ADMINISTRATION THESIS

Supervisors:
1. Dr. Tran Doan Kim
2. Ph.I) Candidate Tran Phuong Lan

Hanoi - 2009


T A B L E O F C O N T E N T S
A c k n o w l e d g e m e n t ......................................................................................................... i
A b s t r a c t ........................................................................................................................... ii
T ó m t ắ t ............................................................................................................................ V
T a b l e o f c o n t e n t s ......................................................................................................... v i

L i s t o f T a b l e s ................................................................................................................ X
L i s t o f F i g u r e s ............................................................................................................. x i

P R E F A C E ...................................................................................................................... 6

C h a p t e r 1. L i t e r a t u r e R e v i e w .................................................................................. 9

1 . 1 G e n e r a l t h e o r y o f M a r k e t i n g ............................................................................ 9
1 . 1 . 1 . D e f i n i t i o n o f M a r k e t i n g .................................................................................... 9
1 . 1 . 2 . E x t e r n a l a n d I n t e r n a l E n v i r o n m e n t s ............................................................... 9
1 . 1 . 2 . 1 . M a c r o E n v i r o n m e n t 1 ...................................................................................... 9
1 . 1 . 2 . 2 . I n t e r n a l E n v i r o n m e n t .................................................................................... 11
1 . 1 . 3 . S e l e c t i n g M a r k e t S e g m e n t 1 .............................................................................1 2
1 . 1 . 4 . P o s i t i o n i n g 1........................................................................................................ 1 4
1 . 1 . 5 . M a r k e t i n g M i x ' ................................................................................................. 1 6
1 . 1 . 5 . 1 P r o d u c t ............................................................................................................. 1 6
1 . 1 . 5 . 2 P r i c e ................................................................................................................... 1 7
1 . 1 . 5 . 3 P l a c e .................................................................................................................. 1 7
1 . 1 . 5 . 4 P r o m o t i o n ........................................................................................................ 1 8
1 . 1 . 5 . 5 P e o p l e ................................................................................................................ 1 9
1 . 1 . 5 . 6 P r o c e s s .............................................................................................................. 2 0
1 . 1 . 5 . 7 P h y s i c a l E v i d e n c e .......................................................................................... 2 0
1.2.

G e n e r a l C o n c e p t o f C o m m o d i t y F u t u r e C o n t r a c t ............................. 2 0

VI


1 . 2 . 1 . D e f i n i t i o n o f C o m m o d i t y F u t u r e C o n t r a c t ................................................. 2 0

1 . 2 . 2 . T y p e s o f C o m m o d i t y F u t u r e C o n t r a c t .......................................................... 2 2
1 . 2 . 3 . T h e d e v e l o p m e n t o f c o m m o d i t y f u t u r e c o n t r a c t i n t h e w o r l d 1................ 2 2
1 . 2 . 4 . B e n e f i t s o f C o m m o d i t y F u t u r e C o n t r a c t ..................................................... 2 4
1 . 2 . 4 . 1 . T a r g e t c u s t o m e r s o f t h e C o m m o d i t y F u t u r e C o n t r a c t ........................... 2 4
1 . 2 . 4 . 2 . B e n e f i t s o f c o m m o d i t y f u t u r e c o n t r a c t ..................................................... 2 5
1 . 2 . 5 . I s s u e s o n d e v e l o p i n g C o m m o d i t y F u t u r e C o n t r a c t ....................................2 7
1 . 2 . 5 . 1 . T h e S t a g e o f e c o n o m i c d e v e l o p m e n t .........................................................2 7
1 . 2 . 5 . 2 . P r i c i n g C o m m o d i t y F u t u r e C o n t r a c t ......................................................... 2 8
1 . 2 . 5 . 2 . 1 . G e n e r a l P r i c i n g M e t h o d s .......................................................................... 2 9
1 . 2 . 5 . 2 . 2 . P r i c i n g M e t h o d f o r C o m m o d i t y F u t u r e C o n t r a c t ................................ 3 0
1 . 2 . 5 . 3 . T h e d i s t r i b u t i o n c h a n n e l s ............................................................................. 3 1
1 . 2 . 5 . 4 . P r o c e s s i n d e l i v e r i n g c o m m o d i t y f u t u r e c o n t r a c t .................................... 3 2
1 . 2 . 5 . 5 . S p e c i f i c a t i o n o f t h e C o m m o d i t y F u t u r e C o n t r a c t ...................................3 5
1 . 2 . 5 . 6 . P e o p l e .............................................................................................................. 3 6
1.2.6. O v e r v i e w o f t h e d e v e l o p m e n t o f c o m m o d i t y f u tu r e c o n t r a c t in V i e t n a m
36

Chapter 2. Analyzing the marketing situation of TechcombankDs
Commodity Future Contact Business .................................................................. 3 8
2.1. Overview of Techcombank ............................................................................. 3 8
2 . 1 . 1 . I n t r o d u c t i o n a b o u t T e c h c o m b a n k .................................................................. 3 8
2 . 1 . 2 . V i s i o n a n d M i s s i o n .......................................................................................... 4 1
2 . 1 . 3 . M a n a g e r i a l S t r u c t u r e ........................................................................................ 4 1
2 . 1 . 4 . B r a n d C o m m i t m e n t .......................................................................................... 4 4
2 . 1 . 5 . C o r e V a l u e ......................................................................................................... 4 4

2.2. External and internal Environment......................................................... 45


2 . 2 . 1 . P E S T ' a n a l y s i s ................................................................................................... 4 5

2 . 2 . 1 . 1 . P o l i t i c a l F a c t o r s ............................................................................................ 4 5
2 . 2 . 1 . 2 . E c o n o m i c F a c t o r s ......................................................................................... 4 6
2 . 2 . 1 . 3 . S o c i a l F a c t o r s ................................................................................................. 4 7
2 . 2 . 1 . 4 . T e c h n o l o g i c a l F a c t o r s .................................................................................. 4 8
2 . 2 . 1 . 5 . I n t e r n a t i o n a l F a c t o r s .................................................................................... 4 8
2 . 2 . 2 S W O T a n a l y s i s .................................................................................................. 5 0
2 . 2 . 2 . 1 . S t r e n g t h F a c t o r s ............................................................................................ 5 0
2 . 2 . 2 . 2 . W e a k n e s s F a c t o r s ......................................................................................... 5 1
2 . 2 . 2 . 3 . O p p o r t u n i t y F a c t o r s ...................................................................................... 5 1
2 . 2 . 2 . 4 . T h r e a t F a c t o r s ................................................................................................ 5 2
2 . 3 . T a r g e t S e g m e n t ...................................... ...........................................................5 3
2 . 4 . P o s i t i o n i n g .......................................... ................................................................ 5 4
2 . 5 . M a r k e t i n g M i x ....................................... ............................................................5 5
2 . 5 . 1 P r o d u c t ................................................................................................................ 5 5
2 . 5 . 2 . P r i c e ...................................................................................................................... 5 6
2 . 5 . 3 P l a c e .....................................................................................................................5 7
2 . 5 . 4 P r o m o t i o n ........................................................................................................... 5 7
2 . 5 . 5 P e o p l e .................................................................................................................. 5 7
2 . 5 . 6 P r o c e s s ................................................................................................................. 5 8
2 . 5 . 7 P h y s i c a l E v i d e n c e ............................................................................................. 6 0
2 . 6 . R e m a i n e d p r o b l e m s .......................................................................................... 6 1
2 . 6 . 1 . E x t e r n a l .............................................................................................................. 6 1
2 . 6 . 2 . I n t e r n a l .............................................................................................................. 6 2
C h a p t e r 3. M a r k e t i n g R e c o m m e n d a t i o n s f o r d e v e lo p in g th e b u s in e s s o f
C o m m o d i t y F u t u r e C o n t r a c t s a t T e c h c o m b a n k .............................................. 6 4


3.1

. S t r a t e g i c O b j e c t i v e s o f T e c h c o m B a n k .......................................................... 6 4

3 . 1 . 1 T h e w h o l e B a n k ' s O b j e c t i v e s .......................................................................... 6 4
3 . 1 . 2 T h e C o m m o d i t y F u t u r e C o n t r a c t O b j e c t i v e s a t T e c h c o m b a n k ................ 6 5
3.2

M a r k e t i n g R e c o m m e n d a t i o n s f o r d e v e l o p i n g t h e b u s i n e s s o f ................... 6 6

C o m m o d i t y F u t u r e C o n t r a c t s a t T e c h c o m b a n k ..................................................... 6 6
3 . 2 . 1 E x t e r n a l f a c t o r s ................................................................................................. 6 6
3 . 2 . 2 I n t e r n a l f a c t o r s .................................................................................................. 6 7
3 . 2 . 2 . 1 . T a r g e t S e g m e n t .............................................................................................. 6 7
3 . 2 . 2 . 2 . P o s i t i o n i n g ...................................................................................................... 6 7
3 . 2 . 2 . 3 . M a r k e t i n g M i x ............................................................................................... 6 8
3 . 2 . 2 . 4 . B u d g e t f o r M a r k e t i n g ....................................................................................7 5
3.2 .2 .5 .

C h a n n e l D i f f e r e n t i a t i o n ............................................................................. 7 6

3.2 .2 .6 .

P u b l i s h i n g a h a n d b o o k f o r C u s t o m e r s .................................................... 7 7

C o n c l u s i o n ................................................................................................................... 7 9
R e f e r e n c e ...................................................................................................................... 8 1
A p p e n d i x 1 : Q u e s t i o n n a i r e ....................................................................................... 8 3
A p p e n d i x 2 : P r i c e D i f f e r e n t i a l o f C r u d e O i l a n d G o l d ........................................ 9 3
A p p e n d i x 3 : H e d g i n g R e g u l a t i o n s a n d M e t h o d s ................................................. 9 5
A p p e n d i x 4 : .................................................................................................................. 9 6
2.7.1.
2.7.2.

2.7.3.
2.7.4.

C om m od ity
C om m od ity
C om m od ity
C o m m o d ity

F utu re
F uture
F utu re
F utu re

C ontract
C ontract
C ontract
C ontract

for
for
for
for

R u b b e r ..................................................... 9 6
C o f f e e .................................................... 1 0 1
C b o t ....................................................... 1 0 3
M e t a l ..................................................... 1 0 4


List of Tables

a b l e 2 . 1 . M a n a g e r i a l S t r u c t u r e a t T e c h c o m b a n k ............
a b le 2.2. C o m m o d i t y F u tu re C o n tra c t at T e c h c o m b a n k

x


List of Figures

T a b l e 1 . 1 . P r i c e D i f f e r e n t i a l o f C r u d e O i l t o J u l y 2 0 0 8 ......................................8 8

T a b l e 1 . 2 . P r i c e D i f f e r e n t i a l o f G o l d t o J u l y 2 0 0 8 .............................................. 8 9

f a b l e 2 . 3 R u b b e r - P r i c e s a n d T r a d i n g V o l u m e ....................................................9 2

T a b l e 2 . 4 . P r i c e D i f f e r e n t i a l o f R u b b e r t o O c t o b e r 2 0 0 8 ................................... 9 5

T a b l e 2 . 5 P r i c e D i f f e r e n t i a l o f C o f f e e R o b u s t a t o O c t o b e r 2 0 0 8 ..................... 9 7
T a b l e 2 . 6 I n i t i a l & M a i n t e n a n c e M a r g i n E x c h a n g e M i n i m u m M a r g i n s ....... 9 8

T a b l e 2 . 7 . P r i c e D i f f e r e n t i a l o f S o y b e a n t o O c t o b e r 2 0 0 8 ................................ 9 9
T a b l e 2 . 8 . P r i c e D i f f e r e n t i a l o f T i n t o O c t o b e r 2 0 0 8 ..................................... 1 0 1

XI


Preface
G lo balization

and

Integrating

into

international

econom y

are

the

i n d i s p e n s a b l e t e n d e n c y t o o u r c o u n t r y ’s e c o n o m y , e s p e c i a l l y w h e n V i e t n a m
h a s j o i n e d W T O . T h e s e w ill b r in g b o th m a n y o p p o r t u n i t ie s a n d c h a l l e n g e s to
t h e f i e l d o f B a n k i n g a n d F i n a n c e o f V i e t n a m . It is p o s s i b l e t o s a y t h a t ,
in te rn a tio n al c h a n g e s h a v e m o re a n d m o re im p o rta n t im p a cts o n the B a n k in g
a n d F in a n c e o f th e C o u n try , th e se re q u ire that the B a n k in g In d u stry h a s to be
e x p l i c i t in i n f o r m a t i o n , e n c o u r a g e t h e l i q u id a tio n a b ility a n d to b e a c t i v e to
h a v e m e t h o d s a n d to o ls to p r e v e n t th e risk to d im i n i s h th e risk. A m o n g th e m ,
d e v e l o p i n g D e r i v a t i v e s M a r k e t i n g e n e r a l a n d F u t u r e M a r k e t i n p a r t i c u l a r is
o n e o f im p o rta n t so lu tio n s. B e c a u se , th e D e riv a tiv e s M a rk e t w ill c o n trib u te to
th e e n c o u ra g e m e n t o f three m ain

services,

in c lu d in g : s h a r in g th e risk,

liq u id a tio n a n d in fo rm a tio n that th e fin an cial m a rk e t h a s p ro v id e d .
T e c h c o m b a n k w ith o v e r 15 y e a r s o f e s t a b l i s h m e n t a n d d e v e l o p m e n t h a s

b e e n a w a r e o f this te n d e n c y as w e ll as a c c e p te d b y th e G o v e r n m e n t a n d th e
S ta te b a n k o f V i e t n a m , b e c o m i n g th e first b a n k o f V i e t n a m to p r o v i d e th e
C om m od ity

F u tu re C o n tr a c t to V ie tn a m e s e E n te rp ris e s w ith

p reventing

risk

from

price

differential

when

they

deliver

a view

to

physical

c o m m o d i t i e s in a h u g e m a r k e t w i t h m a n y c h a n g e s . T e c h c o m b a n k h a s b e e n
t r y i n g its b e s t to p r o v i d e th is s e r v i c e a c t iv e ly a n d e f f i c i e n t l y b u t m o r e a n d

m o r e B a n k s h a v e p r o v id e d th is serv ice s o T e c h c o m b a n k h a s to im p r o v e this
s e r v i c e m o r e t o a t t r a c t n e w c u s t o m e r s a n d m a i n t a i n c u r r e n t o n e s t o e n s u r e its
b u s i n e s s b e t t e r a n d b e t t e r . T h e r e f o r e , t h e t h i s t h e s i s is a i m e d t o s t u d y a n d
p r o p o s e s o l u t i o n s t o b o t h d e v e l o p t h e s e r v i c e p l a y i n g a n i m p o r t a n t r o l e in
b u s in e s s re s u lt o f th e B a n k as w e ll as a tool to h e lp e n te rp ris e s a v o id risk s
fro m p ric e differential w h e n d o in g business.

1


1. Research Objectives
•

L iteratu re re v ie w a b o u t S erv ice M a rk e tin g as w ell as F u tu re M ark et

•

A n a ly s is a n d p r o p o s e s o lu tio n s to d e v e lo p th e b u s in e s s o f C o m m o d i t y
F u tu re C o n tra c t at T e c h c o m b a n k .

2. Methodology
C ase S tudy

3. Research questions
T h e t h e s i s u s e s s o m e q u e s t i o n s a s f o l l o w s t o m a k e it c l e a r a b o u t t h e
situation o f T e c h c o m b a n k an d p ro p o ses solutions :
W hat Techcom bank

has

done

so

far to

develop

the

business

of

C o m m o d ity F u tu re C ontract?
W h a t C o n d i t i o n s a n d P r e - r e q u i s i t e s w i l l it n e e d t o d e v e l o p t h i s s e r v i c e
from a m ark etin g perspective?

4. Scope of work
T h e thesis studies on F u tu re M a rk e t as w ell as factors in flu en ce an d
m e a s u re b u s in e ss activities at T e c h c o m b a n k fro m 2 0 0 5 to 2 0 0 8

5. Data source
T h e thesis bases on tex tb o o k o f O p tio n s - F u tu re an d o th er D erivative,
M a rk e tin g M a n a g e m e n t, Sales F o rce M a n a g e m e n t as w ell as so m e w eb sites
a n d d o c u m e n ts re la tin g to this to p ic a lso u s e to c o lle c t in fo rm a tio n fo r th e
t h e o r y part, to a n a ly z e b u s in e s s a c tiv itie s at T e c h c o m b a n k .

6. Significance
T h e thesis stu d y a n d an a ly z e the b u sin e ss activities at T e c h c o m b a n k w ith

a v ie w to p ro p o s in g s o lu tio n s to d e v e lo p th e b u s in e ss o f C o m m o d ity F u tu re
C o n tra c t at T e c h c o m b a n k .


7. Limitation
T h e th e sis o n ly s tu d ie s at the B o a rd o f C o m m o d ity - T re a s u ry C e n te r o f
T e c h c o m b a n k , th e d a ta a n d in fo rm atio n are co llected fro m this B oard.

8. Expected Results.
S tu d y in g o n the th e o ry o f M a rk e tin g as w ell as the th e o ry o f F u tu re
M a r k e t a n d a n a l y z i n g t h e c a s e o f T e c h c o m b a n k to p r o p o s e s o l u t i o n s in o r d e r
t o d e v e l o p C o m m o d i t y F u t u r e C o n t r a c t a t T e c h c o m b a n k a n d m a k i n g it
b c c o m e o n e o f th e le a d in g b a n k s o f V ie tn a m to p ro v id e fin an cial in stru m en ts.

9. Structure
E x c l u d i n g P r e f a c e , c o n c l u s i o n a n d r e f e r e n c e p a rt, t h e r e a r e 3 p a rts in th is
t h e s i s a s c h a p t e r 1, c h a p t e r 2 a n d c h a p t e r 3.
C h a p te r 1 : S h o w i n g th e g e n e ra l th e o ry o f Serv ice M a r k e tin g as w e ll as
C om m od ity

F utu re

C ontract,

and

the

overv iew

on

developm ent

of

C o m m o d i t y F u t u r e C o n t r a c t in V i e t n a m .
C hapter

2:

A n alyzin g

the

m arketing

situation

of

T e c h c o m b a n k ’s

C o m m o d ity F u tu re C o n tra c t B usiness.
C hapter

3:

M ark etin g

proposals

for

developin g

the

business

of

C o m m o d i t y F u t u r e C o n t r a c t i n c o m i n g y e a r s a n d a s a r e s u l t o f t h i s is t h a t t h e
b u s in e ss resu lt o f th e B a n k w ill b e b e tter as w ell as p ro v id in g a b etter
f i n a n c i a l t o o l f o r e n t e r p r i s e s t o a v o i d r i s k s in p r i c e d i f f e r e n t i a l u n d e r t h e
p o l i c y o f t h e P a r t y a n d t h e G o v e r n m e n t w h e n V i e t n a m j o i n e d W T O f r o m 1 st
January 2007.

3


Chapter 1. Literature Review
1.1 General theory of Marketing
1.1.1. Definition of Marketing
T h ere are m a n y definitions o f m arketing. T h e y are fo cu sed on c u sto m e r
orientation

and

satisfaction

o f cu stom er needs.

As

for Philip

K otler :

M a r k e t i n g is t h e s o c i a l p r o c e s s b y w h i c h i n d i v i d u a l s a n d g r o u p o b t a i n w h a t
they n e ed an d w a n t th ro u g h creatin g an d e x c h a n g in g p ro d u cts a n d v a lu e w ith
others.

1.1.2. External and Internal Environments
1.1.2.1. Macro Environment1
B ecause

the

business

en viro nm en t

is

m ore

and

m ore

changing

a b n o r m a l l y i n s i d e a n d o u t s i d e t h e c o u n t r y . T h e r e f o r e , it n e e d s t o s p e c i f y t h e s e
e x t e r n a l f a c t o r s b e c o m i n g a n i n d i s p e n s a b l e r o l e in b u i l d i n g s t r a t e g y f o r
e n te r p r is e s . T h e s e a r e m a c r o f a c t o r s in th e m a c r o - e n v i r o n m e n t e f f e c t i n g th e
e x iste n c e o f a n y o rg a n iz a tio n . T h e y are political factors, social factors,
e c o n o m ic fa c to rs, te c h n o lo g ic a l facto rs, e n v ir o n m e n ta l facto rs, legal facto rs
a n d in te rn a tio n al factors. T h e r e a re sev era l m o d e l u s e d to a n a ly z e m a c r o
e n v i r o n m e n t , t h e y a r e P E S T ( P o l i t i c a l , E c o n o m i c , S o c i a l , T e c h n o l o g i c a l ),
P E S T E L ( P o l i t i c a l , E c o n o m i c , S o c i a l , T e c h n o l o g i c a l , E n v i r o n m e n t a l , L e g a l ),
S L E P T (S o c ia l, L eg al, E c o n o m ic , Political, T e c h n o lo g ic a l).

Political factors'. T h e s e r e f e r t o g o v e r n m e n t p o l i c y s u c h a s t h e d e g r e e o f
i n t e r v e n t i o n in th e e c o n o m y . W h a t g o o d s a n d s e r v i c e s d o e s t h e G o v e r n m e n t
w a n t t o p r o v i d e ? T o w h a t e x t e n t d o e s it b e l i e v e i n s u b s i d i z i n g f i r m s ? W h a t
a r e its p r i o r i t i e s in t e r m s o f b u s i n e s s s u p p o r t ? P o l i t i c a l d e c i s i o n s c a n h a v e a
'C h a p ter 5 - U n d e rsta n d in g m ark et, M a rk e t D e m a n d an d the m a rk e t
E nvironm ent, M acro -en v iro n m en t T rends and Forces
M a rk e tin g M a n a g e m e n t. S e c o n d E d itio n - P hilip K o tler

4


c o n s id e r a b le im p a c t o n m a n y vital a re a s for b u s in e s s s u c h as th e e d u c a tio n o f
th e w o rk fo rc e , th e h e a lth o f the n atio n a n d the q u a lity o f th e in frastru ctu re o f
th e e c o n o m y s u c h a s th e r o a d a n d rail s y s te m .

Economic factors : T h e s e

include

interest

rates,

tax ation

changes,

e c o n o m ic g r o w th , in fla tio n a n d e x c h a n g e rates, in c o m e d istrib u tio n , sav in g ,
d e b t an d credit av ailability. F o r ex am p le:
- h i g h e r i n t e r e s t r a t e s m a y d e t e r i n v e s t m e n t b e c a u s e it c o s t s m o r e t o
borrow .
- a s t r o n g c u r r e n c y m a y m a k e d i f f i c u l t e x p o r t i n g b e c a u s e it m a y r a i s e t h e
p r i c e in t e r m s o f f o r e i g n c u r r e n c y .
- inflation m a y p r o v o k e h ig h e r w a g e d e m a n d s fro m e m p lo y e e s a n d raise
costs.
- h ig h e r n a tio n a l i n c o m e g r o w t h m a y b o o s t d e m a n d fo r a firm 's p ro d u c ts .

Social factors: C h a n g e s i n s o c i a l t r e n d s c a n h a v e a c o n s i d e r a b l e i m p a c t
o n th e d e m a n d fo r a firm 's p ro d u c ts a n d th e a v a ila b ility a n d w illin g n e s s o f
in d iv id u als to w o rk . A g e , p o p u latio n , g en d er, race, ed u catio n , religion,
m a rita l status, la n g u a g e , m o b ility , se x u a l o rien ta tio n , o w n e rs h ip , in c o m e are
s o c i a l f a c to r s n e e d to b e t a k e n in to c o n s i d e r a t i o n . In V i e t N a m , f o r e x a m p l e ,
the

population

has

been

young.

T his has

increased

th e co sts

for the

G o v e r n m e n t a n d F irm s to b u ild in frastru ctu res fo r th e Y o u th to en tertain
t h e m s e l v e s a f t e r a h a r d w o r k i n g d a y b e c a u s e its s t a f f s a r e still y o u n g .

Technological factors : N e w t e c h n o l o g i e s n o t o n l y c r e a t e n e w p r o d u c t s
a n d n e w ’ p r o c e s s e s b u t a l s o p l a y a n i m p o r t a n t r o l e in r e d u c i n g c o s t, i m p r o v i n g
q u a lity a n d le a d in g to in n o v a tio n . T h e s e d e v e lo p m e n ts c a n b e n e fit c o n s u m e rs
as w e ll as th e o rg a n iz a tio n s that are p ro v id in g p ro d u c ts a n d services. M P 3
p l a y e r s , c o m p u t e r g a m e s , o n l i n e g a m b l i n g a n d h i g h d e f i n i t i o n T V s a r e all
n e w m arkets created by tech n o lo g ical advances. O n lin e sh o p p in g , bar co d in g

5


a n d c o m p u t e r a id e d d e s i g n a r e all i m p r o v e m e n t s to t h e w a y w e d o b u s i n e s s a s
a result o f b e tter technolog y .

Environmental factors : T h e s e i n c l u d e c h a n g e s o f w e a t h e r a n d c l i m a t e

w h ic h c a n h a v e an im p o rta n t im p a c t o n m a n y in d u strie s like tex tile &
g a r m e n t , f a r m i n g , t o u r i s m . A n o t h e r i s s u e o f e n v i r o n m e n t a l f a c t o r s is t h e
g r o w i n g d e s ire to p ro te c t th e e n v ir o n m e n t fro m th e G o v e r n m e n t th a t w ill
in c re ase o p e ra tin g costs o f m a n y firm s

Legal factors: T h e s e a r e l e g a l r e g u l a t i o n s o f t h e G o v e r n m e n t i n u s i n g
lab o r, tr e a tm e n t to e m p lo y e e s , m i n i m u m w a g e s , re c y c lin g , etc. T h e s e la w s
c a n i n f l u e n c e a f i r m ’s c o s t s a s w e l l a s t h e d e m a n d f o r its p r o d u c t .
B e s id e s , g lo b al facto rs are also m a c r o - e n v ir o n m e n ta l facto rs that are
t a k e n in a n a l y s i s re c e n tly . G l o b a l i z a t i o n , fre e tr a d e a r e a s b ila te r a l/m u ltila te r a l/
tr a d e a g r e e m e n t s , c u ltu ra l e x c h a n g e , etc. c a n in flu e n c e th e b u s in e s s o f a firm .

International factors'. V i e t n a m is i n t e g r a t i n g i n t o t h e w o r l d a n d r e g i o n a l
e c o n o m y . O n e e n v i r o n m e n t is s a i d t h a t I t w i l l b e v e r y s e v e r e f o r V i e t n a m e s e
en terp rises. D o in g re se a rc h o n international e n v iro n m e n t facto r w ill h elp
specify

its in f l u e n t i a l le v e l t o t h e o p e r a t i o n o f V i e t n a m e s e e n t e r p r i s e s .

I n t e g r a t i n g is w h e n V i e t n a m r e m o v e b a r r i e r s s o V i e t n a m e s e a n d f o r e i g n
en terprises

w ill jo in

one

m arket

that

has

m ore

exciting

and

severe

en viro nm en t.

1.1.2.2. Internal Environment
B elow

is v e r y u s e f u l f a c t o r s f o r e n t e r p r i s e to m a k e d e c i s i o n in its

e n te rp ris e re la tin g to th e e x iste n c e an d d e v e lo p m e n t o f th e F irm . T h e y are
S tren g th , W e a k n e ss, O p p o rtu n ity , T hreat.

Strength Factors: T h e y a r e c o r e a n d o b v i o u s c o m p e t e n c e s o f o n e
e n te rp ris e as w ell as th e ab ilities to d e v e lo p th e c o m p e titiv e a d v a n ta g e , su c h
as: patent, w ell k n o w n an d fa m o u s brand , getting lo w co st b e c a u se o f co re

6


m anufacture,

abilities

to

approach

the

luxury

natural

resources

and

distribution netw ork.

Weakness Factors: T h e F i r m t h a t h a s n o s t r e n g t h f a c t o r is o n e o f
w e a k n e s s f a c t o r . A n d in s o m e c a s e s , o n e w e a k n e s s f a c t o r w i l l b e a b l e t o b e a
s t r e n g t h f a c t o r a n d v i c e v e r s a , f o r e x a m p l e : h i g h p r o d u c t i v i t y is c o n s i d e r e d a s
o n e o f s t r e n g t h f a c t o r s t h a t n o a n y c o m p e t i t o r h a s it b u t it is a l s o a w e a k n e s s
f a c t o r if t h e F i r m d o e s f o c u s o n i n v e s t i n g m o r e in p r o d u c t i v i t y , th is w ill m a k e
th e firm u n a b le to ed it q u ic k ly to satisfy th e d e m a n d o f c u s to m e rs .

Opportunity Factors: E x t e r n a l e n v i r o n m e n t c a n o p e n m o r e o p p o r t u n i t i e s
t o c r e a t e p r o f i t a n d d e v e l o p f o r t h e F i n n , s u c h a s : c u s t o m e r ’s d e m a n d is
u n sa tisfie d , th e a p p e a ra n c e o f n e w te c h n o lo g y , w e a k m a n a g e m e n t o f law , the
a b o lish m e n t o f international c o m m e rc e barriers

Threat Factors: T h e c h a n g e s o f t h e c o n d i t i o n s a n d e n v i r o n m e n t c a n

m a k e th re a ts fo r th e firm , s u c h as: th e c h a n g e s o f c u s t o m e r s ’ a ttitu d e fro m
o n e p r o d u c t o r serv ice o f th e firm to a n o th e r, th e a p p e a r a n c e o f s u b s titu tio n a l
p ro d u c t/s e rv ic e , n e w law sy ste m , n e w c o m m e r c ia l barriers.

1.1.3. Selecting Market Segment1
A m a r k e t s e g m e n t is a s u b g r o u p o f p e o p l e o r o r g a n i z a t i o n s s h a r i n g o n e o r
m o r e ch ara c te ristic s that c a u s e th e m to h a v e sim ila r p ro d u c t a n d /o r s e rv ic e
n e e d s . A t r u e m a r k e t s e g m e n t m e e t s a l l o f t h e f o l l o w i n g c r i t e r i a : it is d i s t i n c t
from

other

segm ents

(different

segm ents

have

different

needs),

it

is

h o m o g e n e o u s w i t h i n t h e s e g m e n t ( e x h i b i t s c o m m o n n e e d s ) ; it r e s p o n d s
s i m i l a r l y t o a m a r k e t s t i m u l u s , a n d it c a n b e r e a c h e d b y a m a r k e t i n t e r v e n t i o n .

T h e t e r m is a l s o u s e d w h e n c o n s u m e r s w i t h i d e n t i c a l p r o d u c t a n d / o r s e rv ic e
n e e d s are d iv id e d u p into g ro u p s so th e y c a n b e c h a rg e d d iffe re n t a m o u n ts.
C h a p te r 9 - Identifying M ark et S eg m en ts an d selecting target m arkets.
M a rk e tin g M a n a g e m e n t, S e c o n d E d itio n - Philip K o tler

7


1h e s e c a n b r o a d l y b e v i e w e d a s ' p o s i t i v e ' a n d ' n e g a t i v e ' a p p l i c a t i o n s o f t h e
s a m e idea
In o r d e r to e v a l u a t e a n d c h o o s e th e m a r k e t s e g m e n t , th e f ir m m u s t lo o k
at tw o

f a c to r s : t h e s e g m e n t ' s o v e r a l l a t t r a c t i v e n e s s a n d t h e c o m p a n y ’s

o b je c tiv e s a n d r e s o u rc e s . First, th e firm m u s t ask w h e t h e r a p o te n tia l s e g m e n t
h a s t h e c h a r a c t e r i s t i c s t h a t m a k e it g e n e r a l l y a t t r a c t i v e , s u c h a s s i z e , g r o w t h ,
p ro fita b ility , s c a le e c o n o m i e s a n d lo w risk. S e c o n d th e firm m u s t c o n s id e r
w h e th e r investin g
objectives and

in t h e s e g m e n t c o u l d

m a k e s s e n s e g i v e n t h e f i r m ’s

reso u rces. S o m e attractive se g m e n ts co u ld be d ism isse d

b e cau se th e y d o not m e sh w ith the c o m p a n y 's long term objectives, so m e
s h o u ld b e d is m is se d if the c o m p a n y lacking o n e o r m o re o f th e c o m p e te n c ie s
n e e d e d to o ffe r s u p e rio r valu e. T h e re are five p a tters o f targ et m a rk e t

selectio n , su c h as: S in g le -S e g m e n t C o n c e n tra tio n , S e le c tiv e S p e cializ atio n ,
P ro d u c t S p e c ia liz a tio n , M a rk e t S p e cializ atio n a n d Full M a rk e t C o v e ra g e

Single-Segment Concentration'. T h r o u g h c o n c e n t r a t e d m a r k e t i n g , t h e
F i r m g a i n s a t h o r o u g h u n d e r s t a n d i n g o f t h e c h o s e n s e g m e n t ’s n e e d s a n d
ach iev es a stro n g m a rk e t presence. F urtherm ore, each firm en joys op eratin g
e c o n o m y b y s p e c i a l i z i n g i n i t s p r o d u c t i o n , d i s t r i b u t i o n a n d p r o m o t i o n . I f it
gains

leadership,

it c a n

earn

a

high

return

on

investm ent.

H ow ever,

c o n c e n tra te d m a r k e tin g in v o lv e s risks; th e s e g m e n t m a y tu rn s o u r b e c a u s e o f
c h a n g e s in b u y i n g p a t t e r o r n e w c o m p e t i t i o n . F o r t h e s e r e a s o n s , m a n y F i r m s
p r e f e r to o p e r a t e in m o r e th a n o n e s e g m e n t .

Selective Specialization'. T h e f i r m s e l e c t s a n u m b e r o f s e g m e n t s , t h a t a r e
q u ite o b je c tiv e ly a ttra c tiv e an d a p p ro p riate. A n d e a c h s e g m e n t p ro m is e s to b e
a m o n e y m a k e r . T h i s s t r a t e g y h a s t h e a d v a n t a g e o f d i v e r s i f y i n g t h e f i r m ’s
risk.

8


Product Specialization: A n o t h e r a p p r o a c h is t o s p e c i a l i z e i n m a k i n g a
c e rta in p ro d u c t for sev era l se g m e n ts . T h e firm m a k e s d ifferen t m ic ro s c o p e s
f o r d i f f e r e n t c u s t o m e r g r o u p s a n d b u i l d s a s t r o n g r e p u t a t i o n in t h e s p e c i f i c
p r o d u c t a r e a . T h e d o w n s i d e r i s k is t h a t t h e p r o d u c t m a y b e s u p p l a n t e d b y a n
en tirely n e w tech n o lo g y .

Market Specialization: T h e F i r m c o n c e n t r a t e s o n s e r v i n g m a n y n e e d s o f
a p a r t i c u l a r c u s t o m e r g r o u p . T h e F ir m g a in s a s tr o n g r e p u ta tio n in s e r v i n g this
c u s to m e r g ro u p a n d b e c o m e s a ch an n e l for further p ro d u c ts that the c u sto m e r
g r o u p c a n u s e . T h e d o w n s i d e r i s k is t h a t t h e c u s t o m e r g r o u p m a y s u f f e r f r o m
b u d g e t cuts.

Full Market Coverage: T h e F i r m a t t e m p t s t o s e r v e a l l c u s t o m e r g r o u p s
w i t h all th e p r o d u c t s t h e y m i g h t n e e d . O n l y v e r y la r g e f ir m s s u c h a s I B M ,
G e n e r a l M o t o r s C o c a C o l a c a n u n d e r t a k e a full m a r k e t c o v e r a g e s tra te g y .
L a rg e F irm s ca n co v er a w h o le m arket th ro u g h und ifferentiated m ark etin g th e firm ig n o re s s e g m e n t d ifferen ces a n d g o e s after the w h o le m a rk e t w ith
o n e m a r k e t o f f e r i n g o r d i f f e r e n t i a t e d m a r k e t i n g - th e f ir m o p e r a t e s in s e v e r a l
m a rk e t s e g m e n ts a n d d e sig n s d ifferent p ro g ra m s for ea ch seg m e n t.

1.1.4. Positioning1
P o s i t i o n i n g is t h e a c t o f d e s i g n i n g t h e c o m p a n y ’s o f f e r i n g a n d i m a g e t o

o c c u p y a d i s t i n c t i v e p l a c e in t h e t a r g e t m a r k e t ’s m i n d . T h e e n d r e s u l t o f
p o s i t i o n i n g is t h e s u c c e s s f u l c r e a t i o n o f a m a r k e t - f o c u s e d v a l u e p r o p o s i t i o n ,
a c o g e n t reaso n w h y th e target m a rk e t sh o u ld b u y the p ro d u ct.

Two views o f positioning: T h e w o r d p o s i t i o n i n g w a s p o p u l a r i z e d b y
tw o ad v ertisin g ex ecutiv es. T h e y are seen p ositionin g as a creative ex ercise
d o n e w ith an ex istin g product.
'C h a p t e r 10 - D e v e lo p in g , P o s itio n in g a n d D iffe re n tia tin g P ro d u c t th ro u g h
the L ife C y cle. M a rk e tin g M a n a g e m e n t, S e c o n d E d itio n - P hilip K o tler

9


Positioning s t a r t s w i t h a p r o d u c t . A p i e c e o f m e r c h a n d i s e , a s e r v i c e , a
c o m p a n y , a n i n s t i t u t i o n o r e v e n a p e r s o n h u t p o s i t i o n i n g is n o t w h a t y o u d o t o
a product.

Positioning i s w h a t y o u d o t o t h e m i n d o f t h e p r o s p e c t . T h a t is, y o u
p o s i t i o n t h e p r o d u c t in t h e m i n d o f t h e p r o s p e c t .
R ies

and

T rout

argue

that w e ll-k n o w n

p rodu cts

generally

hold

a

d i s t i n c t i v e p o s i t i o n in c u s t o m e r s ’ m i n d . C o c a - C o l a , f o r e x a m p l e , h o l d s t h e
p o s i t i o n o f w o r l d ’s l a r g e s t s o f t - d r i n k f i r m . T o c o m p e t e a g a i n s t t h i s k i n d o f
p o s i t i o n , a r i v a l c a n s t r e n g t h e n i t s o w n c u r r e n t p o s i t i o n i n t h e c o n s u m e r ’s
m i n d ( t h e w a y 7 - U p A d v e r t i s e d i t s e l f a s t h e U n c o l a ), g r a b a n u n o c c u p i e d
p o s i t i o n ( a s S n a p p l e d i d w i t h i t s t e a - b a s e d b e v e r a g e s ) , o r i m p l y t h a t i t i s in
the c lu b w ith th e “ b e st” .
T re a c y an d W ie rs e m a p ro p o se a different p o sitio n in g fram e w o rk called

Value disciplines. W i t h i n i t s i n d u s t r y , a f i r m c o u l d a s p i r e t o b e t h e product
leader, t h e operationally excellent firm o r t h e customer intimate firm. T h i s is
b a se d o n th e n o tio n that e v e ry m a rk e t c o n ta in s a m ix o f th ree ty p e s o f
c u s t o m e r . S o m e c u s t o m e r s f a v o r t h e f i r m t h a t is a d v a n c i n g t h e t e c h n o l o g i c a l
fro ntiers

(product

leadership),

other

custom ers

want

highly

reliable

p e r f o r m a n c e ( o p e r a t i o n a l e x c e l l e n c e ) , a n d s t i l l o t h e r s w a n t r e s p o n s i v e n e s s in
m e e tin g their in d iv id u al n e ed s (c u s to m e r intim acy). T o su cce ed , a b u sin e ss
sh o u ld b e c o m e th e b est at o n e o f these v alu e disciplines, p e rfo rm ad eq u a tely
in t h e o t h e r d i s c i p l i n e s a n d c o n t i n u e i m p r o v i n g in all d i s c i p l i n e s to f e n d o f f
rivals.
E a c h F i r m m u s t d e c i d e h o w t o s t r e s s in its p o s i t i o n i n g . R i e s a n d T r o u t
f a v o r o n e c o n s i s t e n t p o s i t i o n i n g m e s s a g e . W i t h t h i s a p p r o a c h , e a c h b r a n d is
t o u t e d a s “ n u m b e r o n e ” o n a p a r t i c u l a r a t t r i b u t e , s u c h a s “ b e s t q u a l i t y ” , ’' b e s t
serv ice”, “ lo w er p rice” or ‘ m o st ad v an ced tec h n o lo g y ” . If a F irm h a m m e rs

10


a w a y a t o n e p o s i t i o n i n g a n d d e l i v e r s o n it, it w i l l p r o b a b l y b e b e s t k n o w n a n d
reca lled fo r this strength.

1.1.5. Marketing Mix'
E v e r y o n e k n o w s that, th e s u c c e s s fu l m a r k e tin g c a m p a ig n d e p e n d s o n
a d d r e s s i n g s o m e k e y i s s u e s . T h e y a r e i s s u e s , s u c h a s : w h a t a f i r m is g o i n g t o
m a n u f a c t u r e , h o w w i l l it b e in p o s i t i o n i n g i n c u s t o m e r ’s m i n d , h o w w i l l it
d e l i v e r t o c u s t o m e r s , h o w m u c h d o e s it c o s t a s w e l l a s h o w w i l l c u s t o m e r s t e l l
a b o u t t h e s e r v i c e w h i c h t h e y h a v e p u r c h a s e d . A s t h i s s t u d y is r e l a t e d t o a
b a n k , th e re le v a n t m a rk e tin g m ix to b e s tu d ie d s h o u ld b e th e 7 P s o f
M a rk e tin g . They are: P ro d u c t, Price, p lace, p ro m o tio n , p e o p le , p ro c e ss a n d
physical ev idence.

1.1.5.1

Product

I t ’s n o u s e t o d e v e l o p a p r o d u c t o r s e r v i c e t h a t n o o n e w a n t s t o b u y it.
M a n y f ir m s d e c id e to p r o d u c e first a n d th a n e x p e c t to fin d c u s to m e r s fo r th e ir
p ro d u c ts a n d services. V ic e versa, m a n y su cce ssfu l firm s w ill fo cu s on
fin d in g o u t w h a t c u sto m e rs w a n t o r n e e d a n d th e n th e y p ro d u c e th e right
p ro d u c t o r s e rv ic e w ith th e rig h t level o f q u a lity to m e e t th e n e e d s o f
custom ers.
T h e F i r m m u s t g i v e its c u s t o m e r s w h a t t h e y w a n t , n o t w h a t t h e F i r m
t h i n k s t h a t C u s t o m e r s w a n t . T h e F i r m m u s t s h o w t h a t t h i s is t h e p e r f e c t
p r o d u c t o r s e r v i c e b y p r o v i d i n g its v a l u e in t h e e y e s o f t h e b e h o l d e r s .
T h e r e is a l w a y s a n i n s u r a n c e p o l i c y w i t h t h e p r o d u c t / s e r v i c e o f t h e
F irm to a p p ro v e th e p e rfe c tn e s s o f th em .
A lw a y s c h e c k in fo rm a tio n fro m c u s to m e r s to k n o w w h a t c u s to m e rs th in k
a b o u t the p ro d u c t / service, a b o u t the su p p o rtin g se rv ic e a n d w h a t th ey w a n t
’M a r k e t i n g a n d T h e 7 P s
T h e C h a rte d Institute o f M a rk e tin g

11


n o w in o r d e r f o r t h e F i r m t o h a v e t i m e l y c h a n g e s t o m e e t its c u s t o m e r s .
T h e s c o p e o f a s e rv ic e that a b a n k o ffe rin g in c lu d e s p riv a c y as w ell as
su p p o rtin g e le m e n ts su ch as w arran ties, g u a ra n te e s an d su p p o rt. O n e thing
t h a t is v e r y i m p o r t a n t is t h a t , w e h a v e t o c r e a t e v a l u e m o r e t h a n e x p e c t e d . W e
m u s t c re a te e x c e e d in g e x p e c ta tio n s fro m c u sto m e rs, so c u s to m e r s w ill find us
w h e n t h e y h a v e d e m a n d t o u s e . E x c e e d i n g e x p e c t a t i o n is t h e w a y b y w h i c h
v a l u e is c r e a t e d a n d t h e y g e t s o l d . T h e f i r m c a n e x c e e d e x p e c t a t i o n s i n p r i c e ,

q u a l i t y o r s e r v i c e a n d e v e n p o s s i b l e all t h r e e f a c t o r s b u t t h e F i r m m u s t
u n d e r s t a n d w h a t it r e a l l y m e a n s t o e x c e e d e x p e c t a t i o n s b e f o r e t h e F i r m c a n
a c t u a l l y d o it.
1.1.5.2

P rice

T h e p r o d u c t o r s e r v i c e is w o r t h b y z e r o i f c u s t o m e r s d o n ' t d e c i d e t o b u y
it. T h e r e f o r e , t h e p r i c e n e e d s t o b e c o m p e t i t i v e , b u t t h i s d o e s n o t m e a n t h a t
t h e p r i c e is m u c h c h e a p e r t h a n t h o s e o f r iv a ls . B e c a u s e n o o n e w o r k s n o
salary so th e F irm can ad d m o re s o m e ele m e n ts for the p ro d u c t / service w ith
t h e s a m e p r i c e c o m p a r e d t o t h o s e o f r i v a l s . T h e F i r m ’s p r i c i n g p r o v i d e s n o t
o n ly a profit, b u t also m a k e s su re that the m o r e th e F irm c h a rg e s, th e m o re
v a l u e o r q u a l i t y its c u s t o m e r s w i l l e x p e c t t o g e t w h e n b u y i n g its p r o d u c t o r
service.
Based
found ation

on

d e m a n d , cost, p rice an d e x p e n s e s o f riv als w ill b e th e

for the F irm

to p r i c e its p r o d u c t / s e r v i c e , i n c l u d i n g : M a r k u p

P ricing , T a rg e t - R etu rn P ricing, P erce iv ed - V a lu e P ricing , V a lu e Pricing,
G o i n g R a te P ric in g w ith a v ie w b o th to r e c o v e r in g th e initial c o st a n d g a in in g
profit.
1.1.5.3

P lace

T h e p l a c e w h e r e t h e c u s t o m e r d e c i d e s t o b u y p r o d u c t o r s e r v i c e is v e r y
im p o rta n t, this reflects th e m e a n s o f d is trib u tin g p r o d u c t o r s e rv ic e to


c u s to m e r s . It's n o t o n ly a p p r o p r ia te h u t a ls o c o n v e n i e n t fo r c u s to m e r s to
p u r c h a s e i t s p r o d u c t / s e r v i c e . 1’h i s is " d i s t r i b u t i o n c h a n n e l ' ’. T h i s w i l l s h o w
h o w b i g y o u r d i s t r i b u t i o n is, is it e n o u g h t o c o v e r a l l a r e a s i n s i d e a n d o u t s i d e
the co untry.

There

are so m e

m em bers

to d istrib u te

p ro d u c t/s e r v ic e to

c u sto m e rs, in c lu d in g : D irect S elling, su c h as w ith an o u tb o u n d sales force or
v ia m ail o rd e r, in tern et a n d te le p h o n e sales. A g e n t, w h o ty p ic a lly sells
d i r e c t l y o n b e h a l f o f th e p r o d u c e r . D i s t r i b u t o r ( w h o l e s a l e r ) w h o se ll to
retaile rs. R e ta ile r ( d e a le r o r re se lle r) w h o sell to e n d in g c u s to m e rs .
B u t t h e p r o d u c t / s e r v i c e m u s t b e e n s u r e d t o b e a v a i l a b l e in t h e r i g h t p l a c e ,
at the rig h t tim e a n d the right quantity , w h ile k e e p in g sto rag e, in v e n to ry an d
d is trib u tio n c o s ts to a n a c c e p ta b le costs.

1.1.5.4

Promotion

P r o m o t i o n is t h e w a y t h a t a F i r m c a n c o m m u n i c a t e w h a t it d o e s a n d w h a t
it c a n

o ffer custom ers.

ad vertisin g,

co rpo rate

It i n c l u d e s
identity,

sales

activities,

such

m anagem ent,

as:

B randing ,

special

offers

PR,
and

ex h ib itio n as w ell as im p le m e n tin g an u n iq u e selling propo sal. P ro m o tio n
m u s t g a i n a tte n tio n , b e a p p e a l i n g , tell a c o n s is te n t m e s s a g e a n d a b o v e all e ls e
g iv e c u s to m e r s a re a s o n to c h o o s e th e p ro d u c t o r se rv ic e o f th e F irm rath e r
t h a n t h a t o f r i v a l s . R e m e m b e r t h a t g o o d p r o m o t i o n is n o t o n l y o n e - w a y
c o m m u n i c a t i o n b u t a l s o a d i a l o g u e w i t h c u s t o m e r s , it s h o u l d c o m m u n i c a t e
th e b e n efits that c u sto m e rs g ain fro m th e p ro d u c t or serv ice - n ot the features
f r o m it. T h e p r o m o t i o n s h o u l d b e e a s y t o r e a d a n d it e n a b l e c u s t o m e r s t o
id en tify w h y th e y sh o u ld b u y th e p ro d u c t o r service.
M oreover,

P rom otio n

does

not

only

m ean

co m m u n icatin g

to

the

c u s to m e r s b u t also e n su re th e internal s ta k e h o ld e rs w h o are a w a r e o f th e v a lu e
a n d a ttrib u te fro m th e p r o d u c t o r s e rv ic e o f th e F irm . In a d d itio n , this m e a n s

13


c o m m u n i c a t i n g to th e staffs, e m p l o y e e s so that th e y c a n b e k n o w l e d g e a b l e
an d share ex pertise w ith custom ers.

1.1.5.5

People

P e o p l e h e r e c a n b e all s t a f f s w o r k i n g f o r t h a t F i r m , e v e n t h e d i r e c t o r .
B e c a u s e ea c h p o sitio n w ill re q u ire e a c h p ro fe ssio n a l k n o w le d g e a n d m a n a g e
ea ch specific m a rk e tin g . T h ere are four g ro u p s o f p eo p le, including:
C o m m u n i c a t i n g g r o u p o f p e o p le : T h is g r o u p u s u a lly c o n ta c ts to
c u s t o m e r s , h a s h i g h p o s i t i o n in t h e F i r m , m a k i n g d e c i s i o n in
b u sin e ss strategy an d g iv in g out m a rk e tin g cam p aig n .
A c t i v i t y g r o u p o f p e o p l e : T h i s g r o u p h a s s m a l l e r p o s i t i o n in t h e
F irm , u su ally c o m m u n ic a te s w ith cu sto m ers, u n d erstan d s w h a t
cu stom ers w ant and

finds th e w a y to m e e t th e d e m a n d

of

custom ers.
T h e e ffe c t g r o u p o f p e o p le : T h is g r o u p d o e s n o t c o n ta c t to

c u sto m e rs a n d im p le m e n t th e service. T h e s e p e o p le h a v e an
im pacts on

m a rk e tin g strategy, re search in g

m arketing

plans,

in n o v a tin g n e w p ro d u c ts o r se rv ic e s as w e ll as o th e r m a rk e tin g to
attract n e w c u sto m e rs an d m a in tain cu rren t cu sto m e rs.
T h e i n d e p e n d e n t g r o u p o f p e o p l e : T h i s g r o u p h a s e a c h p o s i t i o n in
th e F irm , d o e s not o ften c o n ta c t to c u sto m e rs a n d im p le m e n t the
service.
P e o p le h ere are sa le -m e n o r activity g ro u p o f p e o p le so a n y o n e c o m in g
into co n tact w ith c u sto m e rs m u st m a k e an im p ressio n an d p u t p ro -fo u n d
i m p a c t o n c u s t o m e r ’s s a t i s f a c t i o n . T h e r e f o r e , t h e y m u s t b e a p p r o p r i a t e l y
tra in e d , w e ll m o tiv a te d a n d h a v e a rig h t attitu de. M a k in g s u re that, th e p e rs o n
w h o h a s c o n t a c t w i t h c u s t o m e r s is n o t o n l y t h e p r o p e r l y t r a i n e d p e r s o n b u t
a ls o th e right k in d o f th e p e rs o n for th e jo b . T h e level o f after-sales s u p p o rt

14


a n d a d v ic e p ro v id e d by th e p e o p le that th e F irm a s s ig n e d are o n e w a y o f
a d d in g v a lu e to w h a t the F irm offers, a n d ca n g iv e th e F irm an im p o rta n t e d g e
o v e r th e c o m p e tito rs . M a y b e , this w ill b e c o m e m o r e im p o rta n t th a n p ric e
w h e n c u s t o m e r s start to b u y at th e first tim e .

1.1.5.6

Process

T h e p ro c e ss o f g iv in g a service, an d the b e h a v io u r o f th o se w h o d e liv er
a re c ru c ia l to c u s t o m e r s ’ sa tisfa c tio n . Issu e s s u c h as: w a itin g tim e s, th e
in f o r m a tio n g iv e n to c u s to m e r s a n d th e h e lp fu ln e s s o f s ta f f a re vital to k e e p
c u s t o m e r s h a p p y . C u s t o m e r s a r e n o t i n t e r e s t e d in d e t a i l o f h o w t h e F i r m r u n s .
W h a t m a t t e r s t o t h e m is t h a t s y s t e m w o r k s .

1.1.5.7

Physical Evidence

A s e r v i c e c a n ' t b e a p p r e c i a t e d b e f o r e it is d e l i v e r e d t o c u s t o m e r s . T h i s
m e a n th a t c h o o s in g to u se a serv ice ca n b e p e rc e iv e d as a risk y b u s in e ss
because you

are b u y in g s o m e th in g in tan g ib le. U n c e rta in ly , this c a n b e

red u c ed by h elp in g potential cu sto m ers see w h a t they are buy ing. T h e
physical

ev idence

dem onstrated

by

an

organ ization

m ust

co nfirm

the

a s s u m p t i o n s o f c u s t o m e r s . A f i n a n c i a l s e r v i c e p r o d u c t w i l l n e e d t o d e l i v e r in
a f o r m a l s e t t i n g w h i l e a c h i l d r e n ’s b i r t h d a y e n t e r t a i n m e n t c o m p a n y s h o u l d
adopt a m o re relaxed approach.
E a c h e l e m e n t o f t h e m a r k e t i n g m i x is a k e y t o s u c c e s s . N o o n e e l e m e n t
c a n b e c o n s i d e r e d in i s o l a t i o n . F o r e x a m p l e : Y o u c a n ' t d e v e l o p a p r o d u c t
w i t h o u t c o n s i d e r i n g t h e p r i c e o r h o w w i l l it r e a c h f o r c u s t o m e r .

1.2. General Concept of Commodity Future Contract
1.2.1. Definition of Commodity Future Contract
T o fu lly u n d e r s ta n d a b o u t th e C o m m o d i t y fu tu re C o n tra c t, y o u n e e d to
know

w h a t c o m m o d itie s a n d F u tu re F a c to rs are. T h e M e rria m -W e b s te rs

d ic tio n a r y d e f i n e s t h e m a s " a rtic le s fo r sa le " . In th e f in a n c ia l w o r ld , th e y a re

15


o fte n k n o w n as ra w m a terials. C o m m o d itie s are o fte n item s that y o u see
e v e r y d a y . T h e s e in c lu d e oil, g ra in s , s u g a r , a n d m a n y m o r e . T h e s e ite m s a re
b o u g h t a n d so ld by in vesto rs, p ro d u cers, an d users. T h e f u tu re F acto rs h ere

a re that, th e p rice s o f th e se c o m m o d itie s w ill b e fo re c a ste d so th e y flu c tu a te
g r e a t l y b a s e d o n s u p p l y , d e m a n d a n d e x t e r n a l f a c t o r s . W h e n t h e r e is le s s
d e m a n d o r m o r e s u p p l y o f a p r o d u c t , t h e p r i c e d r o p s . W h e n t h e d e m a n d is
h i g h e r o r t h e s u p p l y is l o w e r , t h e c o m m o d i t y i s i n g r e a t e r d e m a n d b y t h e
p u b l i c s o t h e p r i c e r is e s . F o r e x a m p l e , i f t h e r e is t u r m o i l in t h e M i d d l e E a s t ,
t h e p r i c e s o f o i l w o u l d r i s e b e c a u s e it w o u l d t h r e a t e n o u r o i l s u p p l i e s .
H o w e v e r , if th e M id d le E a st a n n o u n c e s th a t th e y a re g o in g to in c re a s e
p r o d u c t i o n , t h e n p r i c e s w o u l d fall b e c a u s e t h e r e w o u l d b e g r e a t e r s u p p ly .
T h e s e p r i c e s a r e c o n s t a n t l y c h a n g i n g a n d h e r e is w h e r e t h e f u t u r e s c o n t r a c t s
c o m e in.
S o , A C o m m o d i t y f u t u r e s c o n t r a c t is a f i r m c o n t r a c t u a l a g r e e m e n t m a d e
a n d trad e d on the E x c h a n g e b e tw e e n a b u y e r a n d a seller for specified
c o m m o d i t y o n a f i x e d d a t e in t h e f u t u r e . T h e c o n t r a c t p r i c e w i l l v a r y
a c c o r d i n g t o t h e m a r k e t p l a c e b u t it is f i x e d w h e n t h e t r a d e is m a d e . T h e
c o n t r a c t a l s o h a s a s t a n d a r d s p e c i f i c a t i o n s o b o t h p a r t i e s k n o w e x a c t l y w h a t is
b e i n g t r a d e d 1.
S in c e b o th the p arties are u n a w a re o f e a c h other, th e e x c h a n g e p ro v id e s a
m e c h a n i s m to g iv e th e p a rty a s s u r a n c e o f h o n o r e d c o n tra c t. T h e risk to th e
h o l d e r i s u n l i m i t e d , a n d b e c a u s e t h e p a y o f f p a t t e r n is s y m m e t r i c a l , t h e r i s k t o
t h e s e l l e r is u n l i m i t e d a s w e l l
M o n e y lost a n d g a in e d by e a c h p a rty o n a fu tu res c o n tra c t are e q u a l a n d
o p p o s i t e . I n o t h e r w o r d s , f u t u r e s t r a d i n g is a z e r o - s u m g a m e . T h e s e a r e
b a sic a lly fo rw a rd co ntracts, m e a n in g th ey rep resen t a p le d g e to m a k e a certain
n) O p tio n s - F u tu re a n d o th e r D e riv ativ es

16


tr a n s a c tio n at a f u tu r e d a te . T h e e x c h a n g e o f a s s e ts o c c u r s o n th e d a te
s p e c i f i e d in t h e c o n t r a c t . T h e s e a r e r e g u l a t e d b y o v e r s e e i n g a g e n c i e s , a n d a r e

g u a ra n te e d by c le a rin g h o u se s. H e d g e rs often trade futures for the p u rp o se o f
k e e p i n g p r i c e r is k in c h e c k .
F u t u r e c o n t r a c t s a r e o f t e n u s e d b y c o m m e r c i a l e n t e r p r i s e s a s ‘h e d g i n g
to o ls ’ to r e d u c e th e risk o f e x p e c te d

future p u rc h a se s or sales o f the

u n d e rly in g asset. If u s e d to sp ecu late, risk in creases. S o risk d e p e n d s o n the
u n d e r ly in g in s tr u m e n t a n d th e u se o f th e future.

1.2.2. Types of Commodity Future Contract
F ro m th e b e g in n in g y e a r o f 1848, there w a s only C h ic a g o B o ard o f T ra d e
( C B O T ) in tr o d u c e d to tr a d e F u tu re c o n tra c t. A n d n o w , th e re are 4 ty p e s o f
C o m m o d ity F u tu re C o n tra c ts, in c lu d in g : M etals, Softs, E n e rg y a n d G ra in s &
O i l s e e d s . I t ’s s a i d t h a t C o m m o d i t y F u t u r e C o n t r a c t s h a v e b o t h d e v e l o p e d i n
quality a n d q u a n tity w h ic h are s h o w e d specifically b elo w .
-

C om m o d ity

F utu re

C ontract

o f M etals

includes:

Base,

P recious,

S trateg ic/ M in o r
-

C o m m o d ity F u tu re C o n tract o f S oils (A g ricu ltu re) includes : C offee,
co coa, su g a r an d others

-

C o m m o d ity F u tu re C o n tra c t o f E n e rg y in c lu d es : C ru d e , O il P ro d u c ts,
Gas

-

C o m m o d ity F u tu re C o n tract o f G rain an d O ilsee d s includes : G rain s,
O il S ee d s, L iv e S to c k a n d F ibers

1.2.3. The development of commodity future contract in the world1
The

m odern

co m m odity

m a rk e ts h a v e their roots

in t h e t r a d i n g o f

ag ric u ltu ral p ro d u c ts. W h ile w h e a t a n d c o m , cattle a n d pigs, w e re w id e ly

t r a d e d u s i n g s t a n d a r d i n s t r u m e n t s in t h e 1 9 th c e n t u r y in t h e U n i t e d S ta te s ,
1h t t p ://. w w ' w . c f t c . g o v

17

DA! H O C w u O C

G

im

hrt

RUNG TAM THONG TIN THL
THU VI E N


o t h e r b a s i c f o o d s t u f f s s u c h a s s o y b e a n s w e r e o n l y a d d e d q u i t e r e c e n t l y in
m o s t m a rk e ts. F o r a c o m m o d i t y m a r k e t to b e e s ta b lis h e d , th e re m u s t b e v e ry
b r o a d c o n s e n s u s o n t h e v a r i a t i o n s i n t h e p r o d u c t t h a t m a k e it a c c e p t a b l e f o r
o n e purpose or an other
F ro m b e g in n in g y e a r o f 1848, C o m m o d ity F u tu re C o n tra c t w a s traded
s e p a r a te ly , all t r a n s a c t i o n s w e r e tr a d e d w ith b r o k e r o r E x c h a n g e , at th e f ix e d
place. W h e n
outside,

C om m od ity

this tra d in g

was

F u t u r e C o n t r a c t b e c a m e p o p u l a r in U S A
controlled

by

the

G overnm ent

w ith

and

specific

re q u ire m e n ts as fo llo w : R e q u ire m e n ts for D e sig n a tio n as a C o n tra c t M a rk e t
u n d e r th e F u tu re T r a d in g A c t o f 1921 a n d R e q u ir e m e n ts fo r D e s ig n a tio n as a
C o n tra c t M a r k e t u n d e r th e G ra in F u tu re s A c t o f 1 92 2 w ith a v ie w to m a k in g
c u sto m e rs trad e m o re c o m fo rta b ly , safely a n d legally th a n b efo re.
H o w e v e r , t h e C o m m o d i t y s t a t u s o f l i v i n g t h i n g s is a l w a y s s u b j e c t to
d o u b t it w a s h a r d t o v a l i d a t e t h e h e a l t h o r e x i s t e n c e o f s h e e p o r g o a t s .
Excuses

for n o n -d e liv e ry

w ere

not

unknown,

and

there

are

recovered

S u m e r ia n letters th a t c o m p la in o f sic k ly g o a ts, s h e e p th a t h a d a lr e a d y b e e n
fleeced,

etc. I f a s e lle r's

reputation

w as good,

ind iv id u al

"backers"

or

" b a n k e rs " c o u ld d e c id e to ta k e the risk o f " c le a rin g " a trad e. T h e o b s e r v a tio n
t h a t t r u s t is a l w a y s r e q u i r e d b e t w e e n m a r k e t p a r t i c i p a n t s l a t e r l e d t o c r e d i t
m o n e y . B u t until re la tiv e ly m o d e rn tim e s, c o m m u n ic a tio n a n d cre d it w e r e
prim itive.

B u t f r o m t h a t t i m e t o 1 9 7 4 , t r a d i n g a c t i v i t i e s w e r e o n c h a o s s o it n e e d e d a
c o m m i t t e e to c o n t r o l a c t i v i t i e s . T h a t ’s w h y t h e C o m m o d i t y F u t u r e T r a d i n g
C o m m i s s i o n ( C F T C ) w a s e s t a b l i s h e d in 1 9 7 4 a s a n i n d e p e n d e n t a g e n c y w i t h
t h e m a n d a t e to r e g u l a t e c o m m o d i t y f u tu r e s a n d o p t i o n m a r k e t s in t h e U n i t e d
S tates. T h e a g e n c y 's m a n d a te has b e e n re n e w e d a n d e x p a n d e d se v e ra l tim e s

18