Improving competitiveness through branding development
Saturday, 2017-07-01 10:23:39
NDO – Developing a brand is currently an urgent issue, especially in the context of Vietnam's deeper integration into the global economy, and the effectiveness of the National Branding Programme in the international markets has begun to take effect.
Some importers have paid close attention to cooperating with Vietnamese partners, who have developed a national brand. Therefore, enterprises should attach significant importance to building and promoting their brand value in order to stand firm in the domestic market whilst expanding their export market.
Platform for business
Statistics show that throughout the nation there are nearly one million enterprises in operation. But 80% of them use only 5% of their turnovers for promoting their brands. As a result, even though many made-in-Vietnam products are of good quality, they are not in a dominant position, neither in the domestic nor international market.
Developing brands is an urgent matter in improving the competitiveness of Vietnamese enterprises in this period of global economy integration. In reality, Vietnamese enterprises have not promoted their strengths or products when compared to foreign companies in the domestic market. According to Deputy Head of the Vietnam Trade Promotion Agency, under the Ministry of Industry and Trade, Do Kim Lang, who also is Deputy General Secretary of the National Branding Programme, the National Branding Programme will support businesses in developing, protecting and promoting their brand in the context of fierce competition.
Traphaco Joint Stock Company is a good example of a company that has benefited from developing it’s brand. Over the 5 years since being recognised as National Brand, the company has achieved outstanding growth, showing an 18 percent increase in revenue and 20 percent increase in profit and Traphaco is one of the 50 top enterprises listed on the Vietnam stock market. According to Dao Thuy Ha, the marketing manager of Traphaco, her company’s brand building efforts, through the years, have been based on high quality and organic ingredients, a modern distribution system and technology application in order to have the best products in the market.
Sharing his thoughts on branding development, Dr. Declan P. Bannon, of the British University in Vietnam, says that Vietnamese companies need to define their objectives and set up plans to have better strategies than those of their competitors. Especially, they need to focus on their regular customers.
According to the National Office of Intellectual Property (NOIP) under the Ministry of Science and Technology, in building and developing brand, the geographical indication plays a very important role. It is increasingly protected and developed by nations, as it is considered as an effective tool to enhance economic value and affirm the reputation of the product. According to statistics of the NOIP, Vietnam has nearly 950 places to be used for specific local products and services. As of January 2017, a total of 55 geographical indications have been registered in Vietnam, 49 of which are Vietnam geographical indications, along with six geographical indications of foreign countries.
In order to be able to use geographical indications, companies should commit to quality assurance and comply with strict control requirements in the production process that helps to create a healthy business environment and enhance the prestige of businesses. Through geographic indications, businesses can create and develop a specialized market.
According to the survey, consumers in Europe are willing to pay a premium of 20-25% for protected geographical indication (PGI) products. In recent years, statistics have shown that prices and output consumption of PGI products increased by 1.5 to 2 times, compared to before the products were protected. Obviously, the combination of the geographical indications and the enterprises’ branding development system will bring great value added to products.
Sustainable branding development
According to economic experts, enterprises should pay attention to their development plan and branding development, especially taking into account consumer trends, to develop a better strategy than their competitors.
Dang Thuy Ha, from Nielsen Vietnam, pointed out that approximately 80-90% of Vietnamese consumers consider branding as one of the most influential factors in their purchase decisions. In addition, consumers are becoming more aware and making wiser decisions in choosing their products. They prefer healthier products that ensure environmental protection and health. They are also willing to pay more for a better customer experience. At the same time, it is necessary to improve customer interaction to assure 3R (reach, resonance and reaction). “4 out of 5 Vietnamese consumers are willing to pay a higher price for products from enterprises that give something back to society and the environment”, said Dang Thuy Ha.
Under the 2020 orientation, the National Brand program will create an appropriate environment for the development of branding through an integration of multiple programs and activities of similar purposes from the relevant ministries and industries in order to save resources. It will continue to assist enterprises in developing brand names, through training and informative consultation programs, so as to strengthen their business capacities and product competitiveness.
The orientation includes increasing exports, domestic market expansion and identifying the export market to build the foundation for national branding. The strategies for branding of major export items should be based on the combination of the products’ branding and geographical indications. Meanwhile, the products that achieve the national brand names will be advertised through the media and promoted in international trade fairs. Also the 2020 orientations include nurturing national pride through using products with Vietnamese brand names.