Brand Development: Shortest Way to Boost Exports

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Building and developing strong brand names to boost exports is one of the top priorities of Vietnam. However, such problems as lack of sustainable export strategies, weak marketing capability of localities, international trade disputes which are beyond the ability of a company, an industry or a locality are causing pressures on Vietnam’s exports. On the other hand, added value in total goods value structures is quite low because of branding weakness, a hard nut to crack for any Vietnamese entity.

Many shortcomings

Mr Do Thang Hai, Director of the Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade, said: “The more deeply integrated into the world economy, the more weaknesses Vietnamese branded goods are exposed. They are overshadowed by foreign brands in the domestic market and have to rely on foreign brands to penetrate into world markets in the form of subcontractors. They have their intellectual property rights infringed by competitors or disadvantageously exploited on world markets. Therefore, building a national programme aimed at increasing awareness and supporting enterprises to build, protect, promote and develop brands is an urgent and strategic requirement.

Knowing this importance, many localities have focused on developing industry brands. Some brands have been protected like green-skinned Ben Tre pomelo, Phu Quoc pepper, Thanh Ha litchi, Binh Thuan dragon fruit and Tien Giang agricultural specialties. The selection of industries for branding has met a lot of criteria. Firstly, chosen industries must have high export values in order to have sufficient investment for quality guarantee, branding strategy, and production improvement. For instance, rice, coffee, tea and cashew nuts are key industries representative of Vietnamese agricultural exports.

He said some Vietnamese enterprises have made significant progress in brand building and development, thus raising the competitiveness of their products against imported ones. However, a majority of Vietnam enterprises lack experience and capacity to develop and use their brands as a true marketing tool. They are even not fully aware of branding, leading to their improper investment for branding strategies. They run after branding for their face while forgetting that values that create the strong foundation for a brand are the quality of products and services and the efficiency of production and business processes. This approach stains the image of their products on the domestic market, weakens their competitiveness against imports or rivals made by multinational companies in Vietnam. Meanwhile, the strong economic integration process also facilitates multinational companies to buy into Vietnamese companies or grant franchises to local firms. This negatively impacts the development of Vietnamese product brands as it stirs up the keenness on foreign brand names of Vietnamese consumers. Besides, there are too many brand awards organised annually, causing confusions in brand recognition.

While Vietnamese goods brands have not secured a strong footing on world markets, the cooperation between the State and the business community to build a common image for Vietnam exports and strongly popularise that image on world markets is a cost-effective, time-saving way to build the foothold in markets for individual brands.

Implementing national brand programme

The National Brand Programme is the only programme the Government of Vietnam carries out to promote the country’s image and national brand through product brands. This is a long-term national trade promotion programme aiming to build and advertise brands of products and services, trade names, geographical indications, and appellations of origin of goods on Vietnamese and foreign markets.

The symbol of national brand, called Vietnam Value, is attached to trademarked products and services that meet requirements for national brand labelling. Companies with products and services selected to participate in the programme must pursue and share the values the country is perusing in the integration period: Quality – Innovation, creativity – Leadership. The programme is not a brand award. The selection of products and services qualified for “Vietnam Value” label is only the beginning for chosen companies to become programme partners. The State does not do this for enterprises but it will sponsor quality, well-reputed product and service brands to build a strong footing on domestic market and seek to expand their presence to the world.

According to the Vietnam Trade Promotion Agency (Vietrade), the selection of Vietnam Value-labelled products is organised every two years. At the first selection in 2008, based on meticulous, scientific criteria, the programme selected 30 “Vietnam Value” companies. In 2008 – 2010, despite economic slump, “Vietnam Value” companies still expanded 15 per cent onwards, with a company even enlarging 121 per cent during this period. The market value of 30 companies in 2008 was VND155,277 billion. In the second choice in 2010, as many as 43 companies were certified the National Value. Although global and Vietnamese economies slowed down in this period, these companies still expanded. Their revenue and profit increased. A company made a record growth of 207 per cent in this period.

To date, about 2,500 businesses nationwide have registered to join the programme.

Huong Giang – Cong Thang

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