[Vnbiz] Lexis Nexis Brand Strategy

[Craig Stevenson]

Brand Strategy
September 14, 2006
*SECTION:* Pg. 30

*LENGTH:* 1508 words

*HEADLINE:* BRAND PAPERS - *VIETNAM*;
Good morning *Vietnam*

*BODY:*


*Vietnam* may be behind India and China economically but its geography,
infrastructure and work ethic set the scene for a boom, says Ralf Matthaes

*Vietnam:* the name itself used to conjure up images of helicopters,
soldiers clad in black, and Apocalypse Now. But not any more. It has taken *
Vietnam* around 25 years to rise from the ashes of war to become Asia's next
burgeoning economy - but it has arrived.

*Vietnam's* recent social and economic achievements provide a better
understanding of where this country is heading. In the past three years, *
Vietnam,* which has 82 million residents, has enjoyed an annual GDP growth
of more than seven per cent. This year and those beyond are already
earmarked for eight per cent growth.

*Vietnam* has recently been lauded by the United Nation's Kofi Annan as
having the best global track record for poverty reduction over the past 10
years. Microsoft founder Bill Gates, on a recent visit, claimed that he and
his corporation would enjoy returning to *Vietnam* and investing in this
"vibrant country." Investment bank Goldman Sachs has observed that
*Vietnam*will be an emerging economy for investors over the next five
years.

But *Vietnam* is a market frequently overlooked by businesses drawn to the
bright lights of China and India. This is understandable, because
*Vietnam*is operating on a much smaller scale and China's advertising
and marketing
is light years ahead of *Vietnam.*

In China, national ad spend per head of population in 2003 was $15 (#8),
compared with $340 (#187) in the UK, or just $5 (#2.75) per head in *
Vietnam.* But Vietnamese ad spend is growing at more than 30% per annum. *
Vietnam's* World Trade Organisation accession is anticipated to be
formalised in November 2006 and this will send the country into acceleration
mode. Foreign direct investment (FDI) grew, in real terms, by 19.3% in 2005,
reaching $6.3bn (#3.41bn). *Vietnam* should not be overlooked.

Colonial hangover

But there is still work to be done. Marketers in *Vietnam* are still
suffering from what could be called 'colonial marketing practices'. Because
the French dominated the country's economy from the late 1850s until the
early 1950s, marketing and advertising is still often based on adaption from
other markets. A 'wait and see' attitude prevails with regard to seeing if
foreign ideas and concepts will work; this needs to be reviewed if
*Vietnam*is to become a major marketing power.

Vietnamese society and family life also has a distinctive structure. The
Vietnamese have a long history of fighting for their independence. Despite
being invaded by the Chinese, French, Japanese, Americans and Khmer Rouge in
the last 100 years, the nation has maintained its independence.

This streak of independence has manifested itself in all elements of
Vietnamese life - but nowhere is it more visible than in
*Vietnam's*cornerstone of society, the family. The average Vietnamese
family is not one
of homogeny, but rather a close-knit, eclectic collection of non-related
friends and distant family.

Over the years, the migration of Vietnamese both within the country's
borders and abroad has been significant; most Vietnamese now have family
members across the nation and overseas, with the majority of Viet Kieu
(overseas Vietnamese) residing in America, France, Canada and Australia.

This has greatly influenced the Vietnamese consumer's decision-making
process and has prompted the evolution of a phenomenon rarely seen in other
countries - the development of a three-plus breadwinner family. This unique
marketing concept, along with the introduction of 5,000 new consumer
products to the shelves every year, has turned *Vietnam* into a branding
minefield.

In a recent national 'well-known brands' survey, nearly half of the listed
brands were local Vietnamese. Though a 'well-known brand' is a vague measure
of the power of marques, the survey at least highlights that *Vietnam* is
not a one-dimensional market catering only to foreign brands. There is a
plethora of brands to choose from and, more importantly, an array of
decision makers to target in every household.

Vietnamese understanding of the value of brands is still in its infancy.
Many still believe that a brand is simply a registered trademark or logo.
But with companies such as Unilever, P&G and Nestle leading the way, many
Vietnamese are beginning to recognise a brand as a 'promise' or a 'badge' to
reflect the company's image.

Glass half full

The Vietnamese are optimistic, with more than 70% believing that their
standard of living will increase over the next 12 months. Optimism, coupled
with key social traits such as respect for elders, respect for education,
humility, resourcefulness and a belief in hard work, contributes towards the
potential for Vietnamese consumers becoming a very solid and significant
consumer-based nation. But to better understand *Vietnam's* emerging
consumer classes, it is essential to break down these consumers into
individual demographics.

Three-quarters of Vietnamese live in rural areas; this large and mostly poor
demographic has a very different attitude towards brands than its urbanised
cousins. Branding does have an influence - providing it is conveyed by the
marketer in the appropriate way. At a rural wedding, men will smoke branded
cigarettes and drink branded beer and spirits, highlighting the perceived
value of premium brands for consumption on special occasions, in all sectors
of society.

Urban consumers in *Vietnam's* political capital Hanoi and its economic
capital, Ho Chi Minh City (formerly Saigon) are rather more brand savvy.
Nokia, Cartier, Mercedes-Benz and Heineken are all expensive luxury brands
appreciated for their quality and the image they convey.

The country's 15 million urban consumers are starting to desire the means to
differentiate themselves from others in society. Although Vietnamese
continue to show humility with regard to wealth, they have also started to
use brands to demonstrate success.

Gender is another major factor driving the power of brands in
*Vietnam.*Personal-care products spend is growing at a rate of up to
24% in some
categories. For the first time, women are making their own money - taking up
senior positions in local and foreign companies. Although brands are
important to them, these women are currently more interested in the efficacy
than the image of brands. Men, on the other hand, are driven more by the
'badge' of a brand and express their aspirations and success through
products.

Age also has a crucial role to play when developing a strategy to promote a
brand or service in *Vietnam.* Fifty-two per cent of the population are
under the age of 24 - barely old enough to have their own financial power.

Since the introduction of a capital market economic policy in 1989, *
Vietnam's* entire education, economic and social system has been upgraded to
meet the challenges of entering the global economy. It is easy to understand
that these young, aspiring consumers - as a major proportion of the
Vietnamese population - are keen to accept new ideas and concepts.

Regardless of this, *Vietnam's* traditional belief in taking time over
important matters is showing itself in the very gradual evolution of its
consumer economy. Brands in *Vietnam* must prove themselves and deliver on
their promises, making it even more important that companies are armed with
all the consumer insight and understanding available to secure their
success.

Marketing media

When you consider that the first international advert ever aired in *Vietnam
* was only in 1992, the power of television has grown enormously. More than
70% of viewers now claim that TV ads are the most trusted source of
information - making this medium one of the most important marketing and
communications tools.

*Vietnam* has a high literacy rate of more than 90% so the development of
the printed word also has had a serious impact on brands. Radio is seeing a
resurgence, with the increase in car usage making it the third key
communication medium.

But it is the liberalisation of *Vietnam's* economy and society which has
had the greatest impact on consumer culture. Government policy progressions,
massive increases in urban wealth and the arrival of the internet have taken
brand experience to new levels. Today, 84% of 15-19 year-old urban youths
are surfing the internet on a weekly basis, which has had a huge impact on
brand recognition and the consequent evolution of *Vietnam's* consumer
culture.

*Vietnam* is no longer China's poor relation. If you consider
*Vietnam's*geographical uniqueness, some would argue that the country
is in a better
position to succeed than China - with its sole dominant ethnic group, single
language, one coast and one major highway linked to its major ports, air
routes and population bases.

These factors make infrastructure development and the creation of an equal
standard of living a realistic and practical aspiration for *Vietnam.* The
country has huge potential, which is already being realised - and it really
is a marketer's dream.

Ralf Matthaes is managing director, TNS *Vietnam.*

ralf.matthaes at tns-global.com

*LOAD-DATE:* September 15, 2006
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