Individual Assignment Subject:Marketing Management

INDIVIDUAL ASSIGNMENT
Subject : Marketing Management

INTAKE 14

Student’s name : Bùi Vạn Thành

ID : VN100…......
Date of completion : 07/06./2019

Topic : “Brand Competition: Prioritizing, Ranking, and Evaluating Popular Brands”

CONTENT

Introduction:

Vietnamese market has archived a big improvement for the last thirty years. Restructure
and politic had started since 1986 giving a push to the economy and big growth, through
those Vietnam quickly is from one of the most poverty countries to be the one has the
low- middle income index. The market keeps developing with positive results, going
along with solid domestic demand and assemble to finish products in order to export.
According to Worldbank report, Vietnam market growth increases from 6,8% in 2017 to
7,1% in 2018 by all industries. One of business lines which is quite new but dramatically
growing called Insurance. Vietnam Insurance business established quite late comparing
in other countries due to objective and subjective matters. However, recently, Vietnam
Insurance is gradually able to be at the developing standard not only local but also
international and prove its standing in the market. After 1995, it was the time that this
type of business actually booming; a lot of brands new-established : Bao Minh, VINARE,
PVI, PJICO.. and Join-stock companies (JSC) such as: UIC,VIA, ACA,… In addition,
 Individual Assignment Subject:Marketing Management

more than 40 subsidiary offices of foreign companies and 70,000 retailers in Insurance
market developing day after day. Free market for insurance industry as well as new
companies has created advantages for developing but competing. Every companies
continuously update their products/services, also focusing on research & development
(R&D) team in order to bring more attracting related products which are various.
Technology is developing day after day, so that risks/ catastrophes are less and less
happened. The consequence is premium decreasing but more new entries coming due to
save investments; which makes the market harder. In order to confirm the standing in the
market and increase brand-awareness toward customers, Insurance companies consider
marketing management is one of the main activities in an organization. There are three
brand names which represent this type of business are PVI, Bao Viet, and PJICO. In this
study, we will go through each company’s background, then a deep SWOT analysis and
lastly is a comprehensive brand discussion regarding in company statistics and operation
to have an insight understanding and decide which company is the best out of three.

Background:

Petro VietNam Insurance Joint Venture Stock company (PVI) was established in 1996,
developed as a subsidiary of Petro Vietnam National Company (PVN) taking care of
internal insured. After more than 20 years of development, PVI has become the leading
non-life insurance business in the Vietnamese market, especially in Energy division
(almost 100%), marine, property- mechanic; Importantly, the company is targeting to be
 Individual Assignment Subject:Marketing Management

an international insurance-capital company. Within first 5 years, PVI has sustained and
restrained its business lines with the revenue 516 billion VND, tax to the government up
to 48 billion and with 30 billion net income. This is the time which company paid most of
the time for training their staff and set up the systems. The company is one of a few
organizations in VietNam has rating from A.M Best, which is an international standard to
clarify the creditability and financial strength. In addition, Brand Finance organization
ranks PVI to be in top 30 the most value brand in Vietnam 2016, and the best 50 listed
company as well as 40 company brands have the most value in the market 2016 by
Forbes magazine.

Bao Viet insurance company is the first insurance organization in the region since 1965.
The company is a subsidiary of Bao Viet Group with 100% shares (a state-own company
under Financial Department). More than 50 years of establishing and developing, Bao
Viet is proud of being a leading company continuously many years in market share,
premium revenue and equity size. The company focuses on life and non life business. In
life division, Bao Viet is leading in health care and has a good standing in the market.
Although the company was launched early 1965, the company actually made a big move
which 970 billion VND revenue: 882 billion in non-life business and 80 billion in
investment.

PJICO (Petrolimex Group Insurance Company) is a captive of Petrolimex company,

which is one of the biggest national oil distributer in Vietnam. Established in 1995 as
PVI, PJICO is a company in top 5 insurance branding in the market. Within the first 5
years, the company actually made the first step which was 125 billion VND and from 5 to
12 subsidiaries.

SWOT analysis

Firstly, we will go through the strengths of each companies.

Strengths PVI BAO VIET PJICO

 Individual Assignment Subject:Marketing Management

Sources (Capital) State-own Owned by Finance Biggest fuel

company, 51% Department, capital distributor in the
owned by Talant, a reserved since market owns.
big company in establishing.
Germany.

Advantages Leading energy Leading healthcare Leading

business. construction and
property.

Outstanding A.M best rating, Strong relationship Prime location in

elements, which the high creditability to with schools, where the major cities,
others are not able local and foreign most of the areas have the most
to do better. investors/customers. healthcare revenue footprints.
coming from.

Where is the lowest Marketing due to Marketing Operating cost

cost? customers mostly (rental offices)
are under the same
“mother” company.

What makes the Strong growth, Brand-awareness Slightly none

company stand out capital and good more than others.
from the others? creditability.

Factors make Customer Customer behavior Prime locations

company has power relationship, spread (afraid of (petrolimex gas
of sales of branches. changing), a lot of stations)
branches.
 Individual Assignment Subject:Marketing Management

Then we move to their weaknesses.

Weaknesses PVI Bao Viet PJICO

Need improvements Paper works, long Long processes in Reinsured market

policy contracts, reimbursement, relationship
weak online sale sales in main (London,
channel. website. Singapore)

What should they increasing Lack of Not aggressive, not

avoid? premium, lack of competition, long scale up more
individual customer queue for offices.
relationship. healthcare claim
due to its massive
policies.

Weak elements in Healthcare segment Property and energy Healthcare and

market to the loss segment energy segment
of revenue

Opportunities are what we consider now besides Strengths and weaknesses.

Opportunities PVI Bao Viet PJICO

Good chances in With a qualified Huge healthcare Distribution

the market. rating by A.M segment database and location
best, they have a high experiences in
higher priority in this specific market.
the market than
others.
 Individual Assignment Subject:Marketing Management

Size of market Potential. People is more aware of risks and how benefit
insurance brings to them.

Politics More government documents support people by encouraging

individual/companies buying insurance.

Lastly, threats are the last elements in the analysis.

Threats PVI Bao Viet PJICO

Obstacles they are Soft market, fee decreasing. Market is full capacity. In addition,
facing. policy is hard to change the format due to the after service
issues.

Changing scope of Relationship is more important than expertise, need more soft
works. skills.

Technical impacts Quite a lot. Nowadays, people seek the most convenience way to
buy everything including insurance policy.

Comprehensive analysis

In order to keep growing in this competitive era, companies have to think a bigger
game: increase foreign portion. Insurance companies want to keep more premium than
before instead of reinsuring to a bigger market; however, limited capital to cover the risk
is a headache issue. PVI and Bao Viet are two of many companies trying to open more
rooms for foreign investors. The charts following is shown recent percentage owned by
the foreigner and international trading volume increasing in 2016-2017 respectively PVI
and Bao Viet.
 Individual Assignment Subject:Marketing Management

With PVI, the open more room (up to 100%) for foreign investor process will be proceed
in 2018-2019. This is a good news to the company due to the non-life insurance revenue
in 2018 has increased 12% which is 46,914 billion VND.

According to a report, the vehicle market will upstream up to 7%/year dramatically than
before due to the own vehicle percentage is low comparing in the South East Asia. In
addition, in 2018, total forecast own vehicle will increase 8.1% when the imposed tax
comes to 0% for ASEAN members. Hence, the insurance market expected to 8.8%
increased in 2018 (for vehicle cover policies only).

Regarding in operating and strategy, Bao Viet tries to restructure all life insurance
products to improve its margin up to 18.4% by pushing secondary product sales. By
reallocating cash flow from insurance side to financial investment, the company’s earning
growth in investing is 29.3% as 5390 billion VND. As reported, net income
approximately is 1473 billion VND, increasing 17.3%, which earning per share (EPS) is
1,877 VND/ share.
 Individual Assignment Subject:Marketing Management

In contrast, in 2018-2019, PVI will have more income from investment as well. Because
the biggest money coming from energy side, it is a good news that the oil price is
increasing lately. The overall growth increases 7% and total premium reaches 6.522
billion VND. The company recently focuses on improving online channel to increase the
market share by collaborating with some foreign IT which keen in expand their platform
in the market.

Conclusion

After a SWOT and comprehensive analysis, we have an overview how the Vietnamese
insurance industry works. However, the market is competitive day after day, leaving the
companies no choice to take over each other market shares. To me, in overview, Bao Viet
is the top 1 in the market regarding size, total revenue; however, a successful company is
knowing how to divide their “eggs” and do not “ put it in the same basket”. In a long
term, PVI has a plan to expand over the boundary; Therefore, they did the A.M best to
confirm its standing in local and international markets. Hence, PVI is number 1, followed
by Bao Viet, and then PJICO.

Reference

https://www.worldbank.org/ Vietnam overview.

https://www.pjico.com.vn/wp-content/uploads/2016/06/timeline.jpg PJICO history Eng.ver.

https://www.baoviet.com.vn/Tap-doan-Bao-Viet/Lich-su-Tap-doan/1995--
2001/25/2608/ArticleDetail/ Eng version.

http://pvi.com.vn/index.html English version.

https://webbaohiem.net/rating-bao-hiem-quan-trong-cung-phai-tu-tu.html information extracted.

https://www.bloomberg.com/asia
Individual Assignment Subject:Marketing Management