Atm Card Service for Student free essay sample

The author would like to gratefully acknowledge the numerous individuals, banks, universities and colleges that have contributed in one way or another, to help the author conduct this research. First of all, the author would like to express sincere thanks to all faculty members of the MBA program at CFVG where the author, over the past two years, has studied and gained valuable knowledge and expertise. Especially, the author would like to express the deep gratitude to Doctor Nguyen Thi Tuyet Mai for her enthusiastic guidance and encouragement that inspired the author a lot during the process of writing the thesis. The author’s special acknowledgment is due to the managers and staff of the following organizations, banks, universities and colleges whose contribution has helped conduct this research: Techcombank, Vietinbank, Vietcombank, Marintime bank, National Economic University, University of Technology, Banking Institution and to many marketers of different banks. Having integrating into WTO for nearly two years has brought Vietnam many chances and challenges. There are big changes in policies and environment of Vietnam economy. Therefore companies doing business in Vietnam have more efforts in such more dynamic economy. 2007 was the year witnessing a rapid and strong development of banking in Vietnam. However, in 2008, along with the world’s financial crisis, Vietnam inflation was tracking at 20. 3 percent for the first half of the year, much higher than the 3. 4 percent rate measured in 2000. This makes the business of Vietnam’s banks cope with so many difficulties such as high interest rate, lacking of capital for loans†¦ In addition, there have been the world’s top banks occupying in Vietnam for more than a decade such as Citigroup, HSBC, Deutschebank, ANZ, Standard Charter Bank†¦ For these significant reasons, Vietnam’s banking business is more and more cruelly competitive. Currently, the banking sector in Vietnam is held by state-owned commercial banks (SOCBs), joint-stock banks (whose shareholders include state-owned enterprises and private entities), foreign bank branches; and joint-venture banks. Founded on the 27th of September, 1993, Techcombank (TCB) is one of the first Commercial Joint Stock Banks of Vietnam born in the circumstance that the country was shifting to marketing economy. Techcombank (also known as Vietnam Technological and Commercial Joint Stock Bank) serves primarily the countrys small to medium enterprises, offering them deposit products, loans, leasing, cash management, and other services. At the beginning, TCB had the legal capital of 20 billion VND and its Head office was in Ha Noi. To 1994 – 1995, TCB raised its capital to 51. 915 billion VND and established TCB Ho Chi Minh branch, opened a fast – growing TCB in great urban in Vietnam. Afterward, TCB has been continuously expanding and raising its legal capital nearly every year. To the late of 2007, TCB, with about 130 branches and transaction office, became the bank having a transaction net ranked the second in commercial joint stock bank sector. Recently, Vietnam has moved to further op en its financial sector, giving approval for the first foreign banks HSBC Holdings Plc and Standard Chartered Plc to open wholly owned units in the country. These policies did a favor to the development and expand of TCB. On September, HSBC Holdings PLC raised its stake in Techcombank, to 20% from 14. 4%, at a cost of $77. 1 million. However, TCB, the same as other Vietnam banks, has the thread of being inferior to the international financial organizations in capital, technology, management, product, etc†¦ and also the way to satisfy customer’s needs. Marketing in banking business is considered an in-depth direction of applying marketing’s rules and principles to a specific service sector, aiming to find out how to meet customer’s needs about financial service, the way they choose and use product supplied by various banks. Techcombank’s marketing department is the unit which in charge of advertisement, communication with clients, event organization, market research, marketing plan, public relation. The most important function is doing market research, which is collecting information on market, identifying potential customers, making survey. Marketing department plays an important role in Techcombank’s development. 1. 2. Research problem Vietnam economy is growing fast; and Vietnam is a good market for other banks to go in. a lot of banks are going to operate in Vietnam. Techcombank is facing with competition from not only banks in Vietnam, but also banks in all over the world. To survive, all banks have to take some action, find new opportunities in this market. Now, Techcombank has service on many kinds of cards, almost for businessman, people with high income in Vietnam†¦ Recognizing there will be more and more students coming to Hanoi from other provinces, and they will need to use banking services. ATM card is one of their needs. This part is the growth of student number in Hanoi and Hochiminh city. And the percentage of them is from other provinces. Leaving far away from their parents, these students will need to use ATM card service for their financing demand. The necessary thing for Techcombank to do now is having knowledge about these independent students use ATM card service. This problem can be solved by doing research on students to learn the characteristics. And Techcombank can make sure that this is the new opportunity to consolidate its card market. 1. 3. Research objectives This project is about to achieve the following objectives: ?Providing overall picture of students going to use ATM card service ? Understanding students in term of demographics, behavior characteristics and information reaching hobbies ? Identifying students’ perceptions of payment method and money transfer ? Checking students’ awareness on Techcombank service ?Providing marketing recommendations to attract more students using ATM card service of Techcombank Achieving these objectives will help Techcombank to expand its market, serving new customers – students, consolidate the card market and improve Techcombank’s position with sustainable quality products and services in customer’s mind. 1. 4. Research scope and limitation For the limited time and resources, this research is only performed in some universities in Hanoi. They are Hanoi University, University of Technology, National Economic University and Banking Institution. Almost data will be collected from students, who leave in hostel, boarding house, far away from their parents. 1. 5. Structure of the thesis This research includes five chapters, they are: Chapter 1. Introduction This chapter presents an overview of Vietnam economy and Vietname banking sector. A brief Techcombank and its marketing department are also ntroduced. Besides, research problems, objectives and scope of the research is also mentioned in this chapter. Chapter 2. Theoretical background This chapter presents some theories on marketing, banking products and services and customer’s behavior on banking sector. Chapter 3. Research methodology This chapter is aimed to show how data in this research is collected. Both quantitative and qualitativ e method is applied. Not only primary data is gathered from questionnaire, interview survey but also secondary data is selected on other studies in banking customers. Chapter 4. Research findings This chapter presents the results of this research, including overview of students’ demographics, buying behavior, awareness on banking services. The assessment of Techcombank’s services are also mentioned in this chapter. Chapter 5. Recommendations for Techcombank This chapter presents some recommendations for Techcombank to create a right ATM card services for students, choose suitable pricing policy, select channel of distributions and commit promotion activities. The concept of banking market 2. 1. 1. Marketing Nowadays, marketing is an important part making the success of not only business but also other activities in modern society. There are many definitions of marketing. The better definitions are focused upon customer orientation and satisfaction of customer needs. As Phillip Kotler stated: â€Å"Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others†. Another definition, the Chartered Institute of Marketing (CIM) efinition (in common with Barwells definition of the marketing concept) looks not only at identifying customer needs, but also satisfying them (short-term) and anticipating them in the future (long-term retention): â€Å"Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably†. In Palmer’s point of view, Marketing is essentially about marshalling the resources of an organization so that they meet the changing needs of the customer on whom the organization depends. And there is a more recent and very realistic definition of Bartles that looks at matching capabilities with needs: Marketing is the process whereby society, to supply its consumption needs, evolves distributive systems composed of participants, who, interacting under constraints technical (economic) and ethical (social) create the transactions or flows which resolve market separations and result in exchange and consumption. There are some of main factors that companies care of when they study and apply marketing in their business: -Profit and customer’s pleasure All enterprises have to equalize their profit target and customer’s requirement. If a company chooses to have high profit that doesn’t base on customer’s pleasure, this will make the negative effect in company’s future business because customers are treated only once. If a company chose to have low profit it can create customer’s pleasure in short-term, but it also means the company using ineffectively their resources in long–term that decreases capital for new product. -Customer needs and future demand To meet customer needs is the centre of all marketing activities and the decisive factor of marketing is imitating or introducing new product, service when customer needs change. The unchangeable factor of marketing is the trend of unceasingly changing. -Customer’s payable demand -Set target in business management The three most important targets of business in marketing are: -Making profit as planted -Direct customer at every issue and every level -Coordinate every activity toward the general target. 2. 1. 2. Banking business -Banking The definition of a bank varies from country to country. Under English common law, a banker is defined as a person who carries on the business of banking, which is specified as: †¢Conducting current accounts for his customers †¢Paying cheques drawn on him, and †¢Collecting cheques for his customers. In most English common law jurisdictions there is a Bills of Exchange Act that codifies the law in relation to negotiable instruments, including cheques, and this Act contains a statutory definition of the term banker: banker includes a body of persons, whether incorporated or not, who carry on the business of banking. Although this definition seems circular, it is actually functional, because it ensures that the legal basis for bank transactions such as cheques do not depend on how the bank is organized or regulated. The business of banking is in many English common law countries not defined by statute but by common law, the definition above. In other English common law jurisdictions there are statutory definitions of the business of banking or banking business. When looking at these definitions it is important to keep in minds that they are defining the business of banking for the purposes of the legislation, and not necessarily in general. In particular, most of the definitions are from legislation that has the purposes of entry regulating and supervising banks rather than regulating the actual business of banking. However, in many cases the statutory definition closely mirrors the common law one. Examples of statutory definitions: †¢Banking business means the business of receiving money on current or deposit account, paying and collecting cheques drawn by or paid in by customers, the making of advances to customers, and includes such other business as the Authority may prescribe for the purposes of this Act; (Banking Act (Singapore), Section 2, Interpretation). Banking business means the business of either or both of the following: 1. Receiving from the general public money on current, deposit, savings or other similar account repayable on demand or within less than [3 months] or with a period of call or notice of less than that period; 2. Paying or collecting cheques drawn by or paid in by customers -Banking pr oduct In the tangible goods domain the notion of what constitutes a product is pretty- straight forward, as it comprises palpable physical characteristics. However, the situation is less straightforward when it comes to financial services because product comprises both utility features and service features. The former concerns the primary need for which the product was bought – for example, a personal pension to provide an income in retirement. Amongst the utility features associated with a pension may be a choice of investment funds, the ability to switch between funds, and an option for income drawdown. Services features are somewhat analogous to the process element of the extended marketing mix of the 7-Ps. In the case of a personal pension, it could include ability to access a fund’s value and make additional contributions on-line, or perhaps access to information and assistance via a 24/7 call-centre. Sometimes the boundary between the two types of feature can appear to be somewhat blurred. An additional dimension to appreciate is the role played by service features where third-party intermediaries form part of the distribution processes of a product provider. In these cases, real competitive advantage can be achieved by providing intermediaries with a range of helpful and responsive service features such as the ability to input new cases on-line and the provision of connectivity between the IT systems of the provider and the intermediary. Thus, when we refer to terms such as product, product management and product development in the context of financial services, we must ensure that both utility and service features are given due consideration. Products are only purchased because they provide these benefits to the consumer. Therefore, in order to understand products and how they should be managed, it is important to understand what those benefits are and how they are provided. Understanding the nature of the service product requires an understanding of both the needs of customers and the organization’s ability to meet those needs. In different countries and different historical periods, there are various detail regulars about banking business. According to Vietnam current law, banks are financial organizations set up to do currency business and others banking services such as deposit, credit, payment services Followed are some main functions of banks: Capital mobilization: Receive deposits from individuals, organizations and other banks under the forms of unfixed-time limit saving, fixed-time limit saving and others savings. Issue bond, value note to mobilize capital domestically or abroad. Mobilize capital from other credit agencies or State bank. -Grant credit terms -Fund and payment service Payment service: Supply payment means, doing domestic or international payment, doing payment order, receipt order and other payment services. Fund service: Receive and pay pretty cash to customers 2. 1. 3. Marketing in banking business and application of marketing in Vietnam banks’ business Doing business in the competitive economy, banks are not outside organizations that have to apply marketing in their business. Experts affirmed marketing is considered a management science and is equipment of managers. Marketing have its role at all in business as well as structure of banks. In recent years, baking business is rapidly develop in Vietnam. Since Vietnam integration into WTO, there are many opportunities but also many threatens to Vietnam economy in general and baking business in particular. The legal frame is somehow more relevant to domestic banks, but this also allows foreign banks expending their business in Vietnam. In addition, there is the setting of series of new domestic banks. These factors encourage banks to compete and marketing is more and more appreciated in such cruel competition. 2. 2. Customer behavior in the banking industry 2. 2. 1. Factors influence to the needs of banking service The majority of organizations offer a range of products to a variety of customer groups in order to meet a variety of customer needs. In financial services, the prime customer groups are personal, institutional and corporate. In personal markets, financial institutions will often separate high net-worth individuals (HNWI) from other customer groups. In the corporate markets, banks will typically separate large corporations from small and medium-sized enterprises. These customer groups have a wide variety of financial needs. The need to move money and make payments (e. g. current accounts, ATMs debit cards) oThe need to earn a return on money (e. g. savings accounts, unit trusts, bonds) oThe need to defer payment or advance consumption (e. g. loans, credit cards, mortgages) oThe need to manage risk (e. g. life insurance, general insurance) oThe need for information (e. g. share price information services, product information) oThe need for advice or expertise (e. g. tax planning, inve stment planning, advice on IPOs, advice on mergers and acquisitions). Because of the limitation of this thesis which study marketing on card service, so we will concentrate on individual customer. During decades, there have been many important eco-social trends influence to banking services for individual customer. Financial organizations in general and banks in particular need to know they are doing business with whom and what are the trends of market: -The range customer’s age are widen In 1980, the tradition target customers of financial organizations in developing countries are under forty-year old men. However, the change in developing countries’ age structure make banks has to adjust their customer policies when customers become older and more long-lived. In a developing country like Vietnam, according to the figure of Statistic Bureau in 2007, Vietnam population has a trend of being older, the proportion of old people increased (percentage of people under fifteen-year old decreased from 33% to 26%, the rate of people over sixty-year old increased 6% to 7% compared with the year of 1999). Moreover, thanks to the development of the eco-social, there are more and more young people using banking services. These changes not only create opportunities for bank to supply new product and widen business net but also require banks to have better awareness about their customer. -The more importance of female customer Another social trend influence to banks’ customer determination is the increase of female labor resource. The needs of economy, the desire of increasing living standard, the personal success make women have their own jobs and earn their own incomes. In 2006, UNDP reported the proportion of women contributing in social activities such as being member of National Assembly, chief executive officer, expert†¦ reaches 50% in some countries. In Vietnam, the number of working women remarkably increasing. -The various incomes Incomes and asset of customer most influence in demand of using banking services. During some decades, people have the trend of being richer and more using banking services. The shift in job type impact differently to banking services demand. In Vietnam, companies are more professional in paying salary to employees’ accounts. The eventful stock marketing in recent years also creates banking transaction needs†¦ -Customers are more unstable In the past, banks’ customers were supposed to be loyal, loyal in behavior and loyal in opinion. About behavior, they used banking services of a certain bank as a habit; they didn’t want to waste their time in looking for another bank. About opinion, customers are in favor of a certain bank – they are satisfied, they are chosen as basic customers by that bank, so they supposed that their bank are better than others. However, at this stage, the tendency of changing appears clearer. Firstly, customers are more complicated, their awareness of banking service makes them confidently change their chosen bank. Secondly, there are much more information and the multiform of banking product make customer’s unstable minds. -Customers pay more attention to society Since 1980, customers have cared much about society, environment, and liberty†¦ that impact on consumptions decision. Customers not only want to invest but also want to know surely that their money is being invested in right way, for suitable purpose and adaptation with their moral value.