HEILBRONN UNIVERSITY

Business Administration and Management

Diploma Thesis

SUCCESSFUL PROMOTION OF CONSUMER GOODS IN VIETNAM

AN EXPLORATORY INVESTIGATION OF VIETNAMESE

CONSUMERS AND CULTURE

Author:

Fabian Heymer

Winter Semester 2007/2008

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TABLE OF CONTENTS

LIST OF FIGURES

VI

LIST OF TABLES

VII

LIST OF ABBREVIATIONS

VIII

ACKNOWLEDGEMENTS

IX

1.

INTRODUCTION

1

1.1 Background

1

1.2 Problem Formulation

2

1.3 Purpose

3

1.4 Research Questions

3

1.5 Structure

4

2.

THEORETICAL FOUNDATIONS

6

2.1 Disambiguation

6

2.1.1 Promotion

6

2.1.2 Consumers and Consumer Goods

7

2.1.3 Culture

9

2.2 Introduction to Promotion Theory 10

2.2.1 Role of Promotion 10

2.2.1.1 Overview 10

2.2.1.2 Impacts on other Marketing Mix Elements 11

2.2.1.3 Impacts on Marketing Strategies 12

2.2.2 Communication Process 13

2.2.3 Promotion Mix 15

2.2.4 Integrated Marketing Communications 17

I

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3.

COUNTRY OVERVIEW 20

3.1 Key Data 20

3.1.1 History 20

3.1.1.1 Overview 20

3.1.1.2 Pre-colonial and Colonial History 20

3.1.1.3 Development of the Socialist Republic of Vietnam 21

3.1.1.4 Doi Moi Policy and Recent Milestones 23

3.1.2 Geography and Climate 24

3.2 Promotion Environment 27

3.2.1 Overview 27

3.2.2 Politics and Administration 27

3.2.3 Economy 29

3.2.3.1 Key Economic Ratios 29

3.2.3.2 Economic Structure 30

3.2.4 Legal Environment 31

3.3 Selected Industries 32

3.3.1 Consumer Goods Producing Industry 32

3.3.2 Promotion Industry 33

3.3.3 Retail Industry 35

3.3.3.1 Overview 35

3.3.3.2 Traditional Retail 36

3.3.3.3 Modern Retail 39

3.3.3.4 Other Formats 42

4.

CONSUMERS 43

4.1 Population and Employment 43

4.2 Living Conditions 46

4.2.1 Overview 46

4.2.2 Income 47

4.2.3 Working Conditions 49

4.2.4 Housing Conditions 49

4.2.5 Health Care 52

4.2.6 Other Factors 53

II

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4.3 Shopping Behaviour 54

4.3.1 Influences on Outlet Selection 54

4.3.2 Characteristics of Traditional and Modern Trade 56

4.4 Female population 58

4.5 North South Differences 59

5.

CULTURE 63

5.1 Cultural Influences 63

5.2 Categorizing Vietnam′s Culture 64

5.2.1 Core Cultural Dimension Models 64

5.2.2 Hofstede′s Five Dimensions of Culture 65

5.2.2.1 Overview 65

5.2.2.2 Power Distance 65

5.2.2.3 Individualism 66

5.2.2.4 Masculinity 67

5.2.2.5 Uncertainty Avoidance 67

5.2.2.6 Long-Term Orientation 68

5.2.3 Lewis Three Culture Categories 68

5.3 Elements of Culture 69

5.3.1 Overview 69

5.3.2 Education 70

5.3.3 Communication and Language 71

5.3.4 Social Organizations 73

5.3.5 Religion 74

5.3.6 Values and Attitudes 76

5.3.7 Aesthetics 79

5.3.8 Other Cultural Elements 80

6.

RESEARCH DESIGN 82

6.1 Overview 82

6.2 Secondary Research 83

III

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6.3 Primary Research 84

6.3.1 Overview 84

6.3.2 Expert Interviews 85

6.3.3 Focus Groups 86

6.3.4 Observation 87

6.4 Research Constraints 88

7.

DISCUSSION OF FINDINGS 89

7.1 Target Consumer Groups 89

7.2 Promotion Mix 91

7.2.1 Advertising 91

7.2.1.1 Overview 91

7.2.1.2 Role of Advertising in Vietnam 91

7.2.2 Sales Promotion 96

7.2.2.1 Overview 96

7.2.2.2 Role of Sales Promotion in Vietnam 96

7.2.3 Public Relations 102

7.2.3.1 Overview 102

7.2.3.2 Role of Public Relations in Vietnam 103

7.2.4 Personal Selling 106

7.2.4.1 Overview 106

7.2.4.2 Role of Personal Selling in Vietnam 106

7.3 Message 107

7.3.1 Message Content 107

7.3.2 Message Execution 107

7.4 Media 112

7.4.1 Overview 112

7.4.2 Television 113

7.4.3 Print 114

7.4.4 Outdoor 115

7.4.5 Internet 118

7.4.6 Radio 119

7.4.7 Others 120

IV

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7.5 Taboos 120

7.6 Outlook 122

7.6.1 Consumer Trends 122

7.6.1.1 Overview 122

7.6.1.2 Health Consciousness 122

7.6.1.3 Brand Consciousness 123

7.6.1.4 Confidence and Sophistication 125

7.6.1.5 Personal Appearance 126

7.6.1.6 Changing Shopping Preferences 127

7.6.1.7 Cultural Influences 127

7.6.1.8 Convenience 128

7.6.1.9 Scepticism towards Promotion 129

7.6.1.10 Other Consumer Trends 129

7.6.2 Future Challenges and Opportunities 131

7.6.2.1 Overview 131

7.6.2.2 Challenges 131

7.6.2.3 Opportunities 133

8.

IMPLICATIONS 135

9.

CONCLUSIONS 141

9.1 Addressing the Research Questions 141

9.2 Limitations 143

9.3 Further Research 144

APPENDIX A: Project Description

XI

APPENDIX B: Interview Introduction

XIII

APPENDIX C: Interview Guidelines

XV

APPENDIX D: Interview Rankings

XIX

APPENDIX E: Focus Group Guideline

XXI

REFERENCES

XXX

V

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LIST OF FIGURES

Figure 1: Illustration of Problem Formulation

2

Figure 2: Reference framework of consumer goods

7

Figure 3: Impacts of promotion 10

Figure 4: Communication process 13

Figure 5: Communication process in a marketing context 15

Figure 6: Comparison between Promotion Categories and AIDA model 17

Figure 7: Geography of Vietnam 25

Figure 8: Key Economic Rations 29

Figure 9: Window of opportunity analysis for retailers 2007 35

Figure 10: Retail Formats in Vietnam 36

Figure 13: Map of Vietnam′s population density 44

Figure 14: Age structure in Vietnam 45

Figure 15: Monthly declared household income 48

Figure 16: Number of household members 50

Figure 17: Reasons to shop at the supermarket 55

Figure 18: Shopping frequency at supermarkets 57

VI

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LIST OF TABLES

Table 1: Household durable consumer goods in Vietnam by residences 51

Table 2: Differences between North and South Vietnamese

60

Table 3: Strengths and weaknesses of qualitative research 85

Table 4: Advertising appeals and Hofstede′s cultural dimensions 110

VII

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LIST OF ABBREVIATIONS

ASEAN

Association of Southeast Asian Nations

FDI

Foreign

Direct

Investment

FMCG

Fast Moving Consumer Goods

GDP

Gross

Domestic

Product

GNI

Gross

National

Income

HCMC

Ho Chi Minh City

IMC

Integrated

Marketing

Communication

MPR

Marketing

Public

Relations

NLF

Nation Front for the Liberalisation of South Vietnam

PoS

Point

of

Sale

PR

Public

Relations

SOV

State

of

Vietnam

SRV

Socialist Republic of Vietnam

UNCTAD

United Nations Conference on Trade and Development

USD

U.S.

Dollar

USP

Unique

Selling

Proposition

VNAA

Vietnam

Advertising Association

VNI

Vietnam

Index

VTV

Vietnam

Television

VIII

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ACKNOWLEDGEMENTS

First, I would like to thank the DAAD (German Academic Exchange Service) for

their belief in my project and granting me a research scholarship which helped me

to finance my study trip to Ho Chi Minh City Vietnam.

Moreover, I remain grateful to all interview partners who received me and patiently

answered my questions, despite their busy schedules. Some of them

recommended me to other interviewees, supplied me with further information and

even became friends. Also, I would like to thank all participants of the focus

groups, who sacrificed their day off in order to take part in my project.

Special acknowledgement goes to my supervisor Prof. Dr. Löffler for supporting

my scholarship application and having confidence in my abilities. Due to the nature

of this project, I would not have been able to approach it without his flexibility.

For spontaneously initiating contact to Mr. Nguyen Van Trinh, Vice Dean of the

National University, who became my contact person in Vietnam, I am grateful to

Prof. Dr. Marsden.

I also want to thank my academic assistants, La Bao Chau and Nguyen Than

Thuy who supported me by translating Vietnamese sources and recruited the

participants of the focus groups. I also remain grateful to Le Phuong Hai for

introducing me to the Vietnamese culture and leisure time activities, being a good

friend and further updating me about current developments in Vietnam.

For giving me the opportunity to conduct the focus groups in the conveniently

located Goethe Institute in downtown Ho Chi Minh City, I would also like to thank

Mr. Helmut Frielinghaus.

This thesis marks the end of my studies at Heilbronn University. Hence, I would

like to express my sincerest thanks to my parents and my brother for their support

in all aspects of my life and encouraging me whenever they feel I have to be

heartened. Finally, in particular, my girlfriend Vanessa Wartusch needs special

acknowledgment for her emotional assistance during my studies and bravery to

accompany me on my field trip to Vietnam.

IX

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