UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Cao My Anh LOW LEVEL OF SALESPERSON COMPETENCIES AT EAST SAIGON BRANCH OF VIETINBANK, HO CHI MINH CITY, VIET NAM ID: 22 13 00 03 MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Dr. LE NHAT HANH Ho Chi Minh City – Year 2016 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Table of Contents CHAPTER 1: PROBLEM IDENTICATION .2 Background of problem .1 Symptom of business problem .2 Justify the existence .3 Justify the importance. 21 CHAPTER 2: ALTERNATIVE SOLUTIONS.2: Comparison among possible solutions. 29 CHAPTER 3: ACTION PLAN .3: Financial analysis among solutions.
31 Table 3: Detailed implementation plan. 35 CHAPTER 4: SUPPORTING INFORMATION .1: Lending interest rate (%) in ASEAN .2: Opening questions for management staff .3: Problems were indicated in VES.5: Sales Competencies Questionnaire in East Saigon Branch of VietinBank.6: Standard scores ten .8: Sale competencies questionnaires in Agribank.9: Causes were reflected in VES. 44 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.10: Manager Interview transcript .1: Comparison the number of agreements among solutions. 51 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLES Table 1.1: Lending interest rate (%) in ASEAN .2: Opening questions for management staff .3: Problems were indicated in VES.4: Initial cause and effect map .5: Sales Competencies Questionnaire in East Saigon Branch of VietinBank.6: Standard scores ten .7: The final causes and effects map .8: Sale competencies questionnaires in Agribank.9: Causes were reflected in VES.10: Manager Interview transcript .1: Comparison the number of agreements among solutions .2: Comparison among possible solutions .3: Financial analysis among solutions.
31 Table 3: Detailed implementation plan. 32 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF ABBREVIATIONS Agribank………………………Vietnam Bank for Agriculture and Rural Development ARM………………………………………………….Associate Relationship Manager RM……………………………………………………………….Relationship Manager SCQ……………………………………………The Sales Competencies Questionnaire VES……………………………………………….VietinBank East Saigon branch VietinBank ………….Vietnam Joint Stock Commercial Bank for Industry and Trade LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Executive summary East Saigon Branch plays a significant role in sale performance and development activity in VietinBank. Nevertheless, the low level of salesperson competences in Marketing Department is affecting to employees and operation in branch. Moreover, this issue will bring the potential sequences in VES as this problem has existed for next years.
Especially, the company has faced to decreasing income and high turnover rate. The main purpose of this thesis is to suggest the solutions to enhance the level of salesperson skills in Marketing Department in VES. In order that we could find out the best solution, we have to make step by step from the analysis to the illustration. They contain collecting symptoms, analysing problem, identify potential causes which is training programme, organizational climate, product knowledge, etc.
They are discovered from the textbook. Additionally, depended on the root cause of the problem, the probable strategies to improve the level of salesperson competencies in the transactions also are found out. From the possible strategies such as updating organizational procedures, adjusting reward system, and improving training program, the efficient key to a difficulty will be built and recommend to VES. Nonetheless, the best answer is to be adjusting training program.
Because that solution is the most economical and most profitable in the future. Actually, the profit is VND 1,025 million while the expense is VND 200 million (Table 2. The cost of two remain solutions is VND 800 million and VND 1000 million respectively. Meanwhile, the profit is merely VND 200 million and VND 20 million respectively.
In order to handle training course, the bank should carry out implementation plan in chapter 3. Because this action plan use willing resources such as trainers who is the experience employees LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com in sale performance and study place where is the meeting room in the bank? It brings benefit and convenience for both employees and company. Furthermore, the recommendations have to be tested for the purpose of ensuring the most suitable for the branch and all the employees. The thesis use the qualitative method which is face to face the interview of 5 managers and 53 staffs in Marketing Department.
Besides that, this thesis makes reference to the literature from the theory, textbook, and previous academic papers in order to verify the main problem, as alternative solutions, and as implementation plan. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Running head: LOW LEVEL OF SALESPERSON COMPETENCIES IN VES 1 CHAPTER 1: PROBLEM IDENTICATION 1.1 Company background Vietnam Joint Stock Commercial Bank for Industry and Trade is abbreviated to VietinBank. VietinBank is one of the two banks in Vietnam to enter into the Global 500, recognizing the world’s most value banking brands in 2015 according to Brand Finance – the world’s famous ratings agency and brand valuation consultancy firm (Annual report 2014). For 10 consecutive years, VietinBank has been in the Top 10 National Brands and the holders of Vietnam Value Award for three straight years.
That’s why the branches of VietinBank have the advantage of brand and prestige in the financial market. This thing is represented obviously in East Saigon branch of VietinBank. In 1991, East Saigon branch of VietinBank was established in Thu Duc district. The branch has 155 employees and 2 transaction offices.
It is focusing business customers due to its location on industrial zone. In addition, the scope of operation include Fund Mobilization in the form of Term Deposits for Retail and Corporate clients, Foreign Exchange, Guarantees, International Settlements, Letter of Credit, Capital Markets, Money Markets, Bonds, Equity Investments, Correspondent Banking, Internet Banking, and other innovative financial and investment services and solutions licenced by the State Bank of Vietnam. The thesis concentrates on the Marketing Department, which consist of over 50 employees and is divided into 5 groups. Each group has 8 members to 12 members who is called Associate Relationship Manager.
Additionally, team head is called Relationship Manager. Associate Relationship Manager and Relationship Manager are abbreviated to ARM and RM respectively. Furthermore, each team is responsible for a LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LOW LEVEL OF SALESPERSON COMPETENCIES IN VES 2 customer group permanently. More specifically, each individual person is responsible for his own customers.
At the same time, they have to seek potential customers for the company.2 Background of problem 1.1 Symptom of business problem For 3 consecutive years, the annual report between 2012 and 2014 of the firm describes that the revenue decreased from 3,594 billion Vietnam Dong to 1,724 billion Vietnam Dong. Moreover, during the period of 3 years from 2012, net income also dropped significantly from 49.4 billion Vietnam Dong to 5.1 billion Vietnam Dong. In 2014, the number of customers increased insignificantly around 320 customers. While planned figure was over 800 customers.
The table below will illustrate the details. 2014 2013 2012 Revenue 1,724 2,100 3,594 Net income 5.4 The real number of 320 609 658 customers grew The schedule number of 800 835 800 customers (Annual report 2012, 2013, 2014) LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LOW LEVEL OF SALESPERSON COMPETENCIES IN VES 3 According to interview results with 53 staffs in Marketing Department of bank, they disclosed many problems which had an effect on turnover and income in the branch. Average score of listening skill and motivation merely reaches at 4. They indicated that they are less developed competencies.
In point of fact, Mr Ha, as a manager in Marketing Department, she believed that motivation provides a stimulus to encourage employee’s performance and greater involvement in business success. Essentially, much motivation can come as employees are encouraged to grow in their competencies through education, training, and experience. It is an internal state that leads to the pursuit of objectives. From the standpoint of manager, motivation is an activity carried on to get them to achieve results.Those problems is discussed more detailed in Section 1.
Overall, the data described ineffective performance in East Saigon branch of VietinBank. Especially, the number of customers reduced from 2012 to 2014. What is actual cause that it is really affect a downward trend in revenue and profit in the bank? Which methods are handled to seek root cause? 1.2 Possible problem In the current context for the Vietnamese economic and the present situation of banking sector, association with another elements, VES copes with a several problems. They are causes lead to decline of profitability in the bank.
Following a financial crisis developed with remarkable speed starting in the late summer of 2008, as mortgage-related securities that had spread through the US and global financial system suddenly collapsed in value. This crisis has undermined many of the largest financial institutions in the US and elsewhere, as well as severely damaging a large LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LOW LEVEL OF SALESPERSON COMPETENCIES IN VES 4 part of the world's financial system. Recently the financial crisis has been joined by a gathering recession in the non-financial sector in the US and global economies (Kotz, 2009). In Vietnam, the real estate and securities market are freezing.
Specially, the banking industry has been influenced dramatically by the crisis. According to the information of Ms Nguyen Thi Ngoc Han, as a manager in branch, the credit growth decreased sharply in annual report from 2012 to 2014. By contrast, the bad debt ratio increased significantly between 2012 and 2014 (Annual report 2012, 2013, and 2014). Furthermore, the interest rate dropped from 17% to 8.7% between 2011 and 2014 (Table 1.
It is meaning that there were fluctuations of bank rate. That is why the customers was not interested in borrowing in the bank. As a result, there was a downward trend in the number of the corporate customers. Because the clients whose bank and Thu Duc District are business customers by concentration on industry zones there.
It generates that bank profit decline significantly. In point of fact, there were 12 employees in 53 interviewees, they affirmed that this is the problem which decrease revenue (Table 1. Next, the second aspect was mentioned that there was trade competition between alternative banks in the same area. According to Ms Vo Thi Hong Khanh, as a manager in team 1, banking industry have occurred to merge the small banks into one larger one.
Nonetheless, the financial market also appeared the strong banks such as ACB and BIDV. Their smooth operation and working capital provided customers with various products and good service. Besides that, the foreign banks with high technology of system, strong capital, and flexible transactions are supplying many choices for customers in the market. In general, VES were facing the main challenges LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LOW LEVEL OF SALESPERSON COMPETENCIES IN VES 5 from these business rivals.
Therefore, the necessary responsibility was set up to improve the quality of bank service in order to rise the corporate customers. In fact, 8 individuals of 53 interviewees asserted that this is the problem lead to reduce income in VES (Table 1. Last but not least, human capital can embody intangible assets such as unique configurations of complementary skills, and tacit knowledge, painstakingly accumulated, of customer wants and internal processes (Bontis, 1999). Especially, sale competencies are learned proficiency at performing tasks necessary for a sale job.
They are among the most important predictors of sales performance (Rentz, Shepherd, Tashchian, Dabholkar, & Ladd, 2002). In fact, results from the interviews with 53 staffs and 5 managers in VES, there were 33 staffs reflect that salesperson competencies were low level (Table 1. That is an important problem generates to decline revenue. They supposed that there was not enough product knowledge and presenting skill for consultancy with customers.
The customers usually wait a long time when they asks questions about bank services. When the salesperson performance failure that it is difficult for the bank to maintenance the loyalty of customers. Consequently, the net income will decline in the following days.