GROUP ASSIGNMENT CHAPTER 8 Transport services in destination areas

Transport services in destination areas

GROUP 3 NGUYEN HUU MINH

DOAN HONG PHAT THAO NGUYEN

HANOI, 2022

NATIONAL ECONOMICS UNIVERSITY

ADVANCED EDUCATION PROGRAMS

PROFRESSION-ORIENTED HIGHER EDUCATION (POHE)

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CHAPTER 8: Transport services in destination areas

Group 3 Neuyen Huu Minh Doan Hong Phat Nguyen Thao Nguyen Class POHE — Tourism Management 62 Supervisor Dr Tran Huyen Trang

HANOI, 2022

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1 The characteristics of consumer behaviour 1.1 Definition of consumer behaviour

Walters (1974) defines consumer behaviour as: " the process whereby individuals decide whether, what, when, where, how, and from whom to purchase goods and services."

Mowen (1993) provides a different definition by explaining consumer behaviour as: " the study of the buying units and the exchange processes involved in acquiring, consuming, and disposing of goods, services, experiences, and ideas" This definition focuses on buying units in an attempt to include not only the individual but also groups that purchase products or services

Schiffman & Kanuk (1997) define consumer behaviour as: "The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products, services, and ideas.” Schiffman & Kanuk (1997) elaborate on the definition by explaining that consumer behaviour is, therefore, the study of how individuals make decisions to spend their available resources (time, money, effort) on consumption- related items

U1 Definition:

- Consumer behaviour is the entire process of evolution, consideration and action of customers from recognizing needs until choosing to buy, use and give opinions after using products or services

- Customer behaviour can reflect the thoughts, feelings, attitudes, and actions of customers in the process of buying, consuming and after consuming products and services

- Customer behaviour is dynamic in nature and resistant to the mteraction of surrounding factors

According to Schiffman & Kanuk (1997: 6-7), two different types of consumers can be distinguished, namely personal and organisational consumers

- Personal consumers purchase products and services for personal or household use or as a gift to someone else Personal consumers, therefore, purchase for final consumption.

- Organisational consumers on the other hand purchase products and services to run an organisation, including profitable and non-profitable organisations, government organisations and institutions

1.2 The characteristics of consumer behaviour

There are five factors that determine the characteristics of consumer behavior: personal, psychological, social, cultural, and economic All factors have a major impact on a consumer’s behavior and the characteristics that define a customer will change as her/his life changes

1.2.1 Personal

Definition: The personal factors are the individual factors to the consumers that strongly influences their buying behaviors These factors vary from person to person that results in a different set of perceptions, attitudes and behavior towards certain goods and services

Some of the personal factors are: Age, Income, Occupation and Lifestyle

- Age: Age is a major factor that influences buying behavior The buying choices of youth differ from that of middle-aged people Elderly people have a totally different buying behavior Teenagers will be more interested in buying colorful clothes and beauty products Middle-aged are focused on house, property and vehicle for the family

- Income: Income has the ability to influence the buying behavior of a person Higher income gives higher purchasing power to consumers When a consumer has higher disposable income, it gives more opportunity for the consumer to spend on luxurious products Whereas low-income or middle-income group consumers spend most of their income on basic needs such as groceries and clothes

- Occupation: Occupation of a consumer influences the buying behavior A person tends to buy things that are appropriate to this/her profession For example, a doctor would buy clothes according to this profession while a professor will have different buying pattern

- Lifestyle: Lifestyle is an attitude, and a way in which an individual stay in the society The buying behavior is highly influenced by the lifestyle of a consumer For example when a consumer leads a healthy lifestyle, then the products he buys will relate to healthy alternatives to junk food.

Perception: Consumer perception is a major factor that influences consumer behavior Customer perception is a process where a customer collects information about a product and interprets the information to make a meaningful image of a particular product When a customer sees advertisements, promotions, customer reviews, social media feedback, etc relating to a product, they develop an impression about the product Hence consumer perception becomes a great influence on the buying decision of consumers

Leaming: When a person buys a product, he/she gets to learn something more about the product Learning comes over a period of time through experience A consumer’s learning depends on skills and knowledge While skill can be gained through practice, knowledge can be acquired only through experience Learning can be either conditional or cognitive In conditional learning the consumer is exposed to a situation repeatedly, thereby making a consumer to develop a response towards it Whereas in cognitive learning, the consumer will apply his knowledge and skills to find satisfaction and a solution from the product that he buys

Attitudes and Beliefs: Consumers have certain attitudes and beliefs which influence the buying decisions of a consumer Based on this attitude, the consumer behaves in a particular way towards a product This attitude plays a significant role in defining the brand image of a product Hence, marketers try hard to understand the attitude of a consumer to design their marketing campaigns.

1.2.3 Social

Definition: The Social Factors are the factors that are prevalent in the society where a consumer live in The society is composed of several individuals that have different preferences and behaviors These varied behaviors influence the personal preferences of the other set of individuals as they tend to perform those activities which are acceptable to the society

These factors are considered as social factors Some of the social factors are: Family, Reference Groups, Roles and satus

- Family: Family plays a significant role in shaping the buying behavior of a person A person develops preferences from his childhood by watching family buy products and continues to buy the same products even when they grow up - Reference Groups: A reference group is a group of people with whom a person

associates himself Generally, all the people in the reference group have common buying behavior and influence each other

- Roles and status: A person is influenced by the role that he holds in the society If a person is in a high position, his buying behavior will be influenced largely by his status.For example, a person who is a Chief Executive Officer in a company will buy according to his status while a staff or an employee of the same company will have different buying pattern

1.2.4 Cultural

Definition: The Cultural Factors are the factors that an individual learns at a very early stage of life due to socialization within the family and other key institutions, such as the set of values, preferences, behavior patterns, and perceptions are learned as the individual grows

Some of the cultural factors are: Culture, Subculture and Social Class

- Culture: Cultural Factors have a strong influence on consumer buying behavior Cultural Factors include the basic values, needs, wants, preferences, perceptions, and behaviors that are observed and learned by a consumer from their near family members and other important people around them

- Subculture: Within a cultural group, there exists many subcultures These subcultural groups share the same set of beliefs and values Subcultures can consist of people from different religion, caste, geographies and nationalities These subcultures by itself form a customer segment.

Social Class: Each and every society across the globe has the form of social class The social class is not just determined by the income, but also other factors such as the occupation, family background, education and residence location Social class is important to predict the consumer behavior

1.2.5 Economic

Definition: The Economic Factors are the factors that talk about the level of sales in the market and the financial position of the consumer, i.e how much an individual spends on the purchase of goods and services that contribute to the overall sales of the company

Economic factors bear a significant mfluence on the buying decision of a consumer Some of the important economic factors are: Personal Income, Family Income, Consumer Credit, Liquid Assets and Savings

Personal Income: When a person has a higher disposable income, the purchasing power increases simultaneously Disposable income refers to the money that is left after spending towards the basic needs of a person When there is an increase in disposable income, it leads to higher expenditure on various items But when the disposable income reduces, parallelly the spending on multiple items also reduced

Family Income: Family income is the total income from all the members of a family When more people are earning in the family, there is more income available for shopping basic needs and luxuries Higher family income influences the people in the family to buy more When there is a surplus income available for the family, the tendency is to buy more luxury items which otherwise a person might not have been able to buy

Consumer Credit: When a consumer is offered easy credit to purchase goods, it promotes higher spending Sellers are making it easy for the consumers to avail credit in the form of credit cards, easy installments, bank loans, hire purchase, and many such other credit options When there is higher credit available to consumers, the purchase of comfort and luxury items increases

Liquid Assets : Consumers who have liquid assets tend to spend more on comfort and luxuries Liquid assets are those assets, which can be converted into cash very easily Cash in hand, bank savings and securities are some examples of

liquid assets When a consumer has higher liquid assets, it gives him more confidence to buy luxury goods

- Savings: A consumer is highly influenced by the amount of savings he/she wishes to set aside from his income If a consumer decided to save more, then his expenditure on buying reduces Whereas if a consumer is interested in saving more, then most of his income will go towards buying products

2 Development of transportation products at the tourist destination 2.1 Road transportation

2.1.1 Infrastructure

Vietnam's road system currently has a total length of 570,448 km, of which national highways account for 24,136 km; highways occupy 816 km; provincial roads account for 25,741 km; district roads account for 58,347 km; urban road 26,953 km; commune road 144,670 km; village road 181,188 km; and inland road 108,597 km Road transport is considered the backbone of the country's transportation and supply chain (logistics) industry The current road network is relatively developed; However, due to congestion and unsafety, the average speed on national highways is only 50 km/h

Cars are very common, especially in cities; As of 2021, there are 4.5 million cars in circulation According to Nikkei Asia, in 2021, Vietnam is among the top 4 countries in terms of auto sales in Southeast Asia

In addition to personal vehicles, a network of subsidized bus services is spread throughout Ho Chi Minh City (HCMC) and Hanoi to serve passengers in the inner city In all major cities, private car and motorbike taxi services are common as traditional or technological operations (eg Grab, Gojek, Be) In addition, after more than 10 years of construction, Vietnam has opened the first high-speed train line in Hanoi in 2021 and the first metro line in HCMC is expected to open in 2023 According to the plan The plan will have 8 tram lines in Ho Chi Minh City and 6 lines in Hanoi ODA capital and poor management are the two leading causes of delays in the construction and operation of metro lines in both cities

2.1.2 Road development planning and strategy 2.1.2.1 Goals to 2023

Develop a road traffic network step by step synchronously, a number of modern and high-quality works, meeting the needs of socio-economic development and ensuring national defense and security, improving the competitiveness of the country economy,

curbing towards gradually reducing traffic accidents and limiting environmental pollution, forming a reasonable transportation system between modes of transport, contributing to basically turning our country into a developing country Develop modern industry with high average income by 2030 with a number of specific goals as follows:

In terms of transport, passengers reached about 9,430 million passengers (90.16% market share); domestic passengers 283.6 billion passengers.km drifted about (72.83% market share)

Regarding infrastructure, forming a system of highways connecting economic and political centers, key economic regions, seaports and international gateway airports; step by step upgrading national highways, specifically:

+ To basically complete inter-regional highways, connecting international gateway seaports, international airports, major international border gates with large import and export demand for goods, high-class urban areas in particular, class I; convenient connection of national highways to seaports of class II, international airports, large inland waterway ports, major railway stations, and urban traffic hubs of class II and below Strive to build and complete about 5,000 km of expressways

+ Focus on upgrading road surface, enhancing traffic safety system, dealing with black spots, renovating and upgrading weak bridges on national highways and upgrading a number of key national highways connecting to hubs Major transport (seaports, inland waterway ports, airports, railway stations) do not have parallel expressways

2.1.2.2 Road network planning a Expressway system

The expressway network is planned for 41 routes, with a total length of about 9,014 km, specifically:

North - South vertical axis:

+ The North-South expressway to the east from Huu Nghi border gate, Cao Loc district, Lang Son province to Ca Mau city, Ca Mau province, about 2,063 km in length, with a scale of 4 to 10 lanes

+ The North-South Expressway to the west from Tuyen Quang city, Tuyen Quang province to Rach Gia city, Kien Giang province, about 1,205 km in length, with a scale of 4 to 6 lanes

Northern area, including 14 routes, about 2,305 km in length, with the size of 4 to 6 lanes

The Central region and the Central Highlands, including 10 routes, about 1,431 km in length, with a scale of 4 to 6 lanes

The southern area, including 10 routes, about 1,290 km in length, with a scale of 4 to 10 lanes

Urban belt of Hanoi capital and Ho Chi Minh City:

+ Hanoi urban belt, including 3 routes, about 429 km in length (excluding sections that coincide with other highways), with 6 lanes

+ Urban belt of Ho Chi Minh City, including 2 routes, about 291 km in length, with 8 lanes

b Highway system

The national highway network consists of 172 routes, with a total length of about 29,795 km, specifically:

North - South vertical axis

+ National Highway |: From Huu Nghi border gate, Cao Loc district, Lang Son province to Nam Can district, Ca Mau province, about 2,482 km in length, meeting grade III standards, 4 lanes

+ Ho Chi Minh road: From Pac Bo, Ha Quang district, Cao Bang province to Dat Mui, Ngoc Hien district, Ca Mau province, about 1,762 km in length, meeting the minimum standard of grade III, 2-4 lanes

Northern area

+ Major national highways, including 21 routes, about 6,954 km in length, with a minimum scale of grade III, 2 to 6 lanes, some sections of the route through difficult terrain areas, at least grade IV, 2 lanes car

+ Amuinor national highway, including 34 routes, about 4,007 km in length, with a minimum scale of grade III, 2 to 4 lanes, some sections of the route through difficult terrain areas, at least grade IV, 2 lanes car.

2.2

+ National highways in the area of Hanoi capital from the 4th belt onward are organized, managed and maintained according to the Law on Capital

Central region and Central Highlands

+ Major national highways, including 24 routes, about 4,407 km in length, with a minimum scale of grade III, 2 to 4 lanes, some sections passing through difficult terrain areas, at least grade IV, 2 lanes car

+ A muinor national highway, consisting of 47 routes, about 4,618 km in length, with a minimum scale of grade III, 2 to 4 lanes, some sections of the route through difficult terrain areas, at least grade IV, 2 lanes car

Southern area

+ Major national highways, including 17 routes, about 2,426 km in length, with a minimum scale of class III, 2 to 4 lanes, some routes with large traffic volume of class III, 4 to 6 lanes

+ A munor national highway, consisting of 27 routes, about 3,139 km in length, with a minimum planning scale of grade III, 2 to 4 lanes

+ National highways in Ho Chi Minh City are managed and maintained by the locality

Railway transportation 2.2.1 Infrastructure

Vietnam Railways includes the following main railway lines: Hanoi - City Ho Chi Minh City (1,726km long) Hanoi - Lao Cai

Hanoi - Hai Phong Hanoi - Quan Trieu Hanoi - Dong Dang Kep - Uong Bi - Ha Long Double - Luu Xa

International train Hanoi - Beijing (China), through Dong Dang station (Lang Son)

The current railway network has a total length of 3,163 km, of which narrow gauge (1m gauge) tracks account for 84% of the total length (2,656 km) — while most countries in the world no longer use them Standard gauge (gauge 1,435m) accounts for

190 km or 6% of the total, while 10% of the current tracks are mixed gauge (standard gauge and narrow gauge) The average speed of freight trains is 50-60 km/h and passenger trains are 80-90 km/h, which is significantly lower than other advanced countries (150-200 km/h) In addition, Vietnam's railways still use diesel fuel - the second generation technology (the first technology is steam locomotives) Meanwhile, third-generation technologies — electrification and fourth technology — electromagnetism — have been deployed in other countries

The general condition of the railway's infrastructure is only poor to moderate, most of the tracks need to be renovated and upgraded Vietnam's railway industry has faced a chronic underinvestment, with only 3% of the total infrastructure budget allocated to railways compared to 90% of road investment

2.2.2 Railway transport development planning 2.2.2.1 Goals to 2030

To renovate and upgrade to effectively exploit the existing railway lines, smoothly connecting the international intermodal railway; complete the investment preparation, arrange resources to start a number of new railway routes, in which priority is given to the North - South high-speed railway, routes connecting international gateway seaports, international airports, and international airports economic, railway hub in big cities, study to deploy Ho Chi Minh City - Can Tho railway line, with some specific objectives:

- Transport: The volume of freight reached 11.8 million tons, accounting for about 0.27% market share; passenger transport volume reached 460 million passengers, accounting for about 4.40% of the market share (of which the national railway was 21.5 million passengers, accounting for a market share of about 1.87%)

- In terms of infrastructure: To upgrade and renovate to ensure safe train operation of 07 existing railway lines; invest in two priority sections of the North - South high-speed railway (Hanoi - Vinh, Nha Trang - Ho Chi Minh City); give priority to the construction of a number of railway lines connecting international gateway seaports, especially in the area of Hai Phong and Ba Ria - Vung Tau; connecting Ho Chi Minh City with Can Tho, connecting internationally with China, Laos and Cambodia in accordance with international transport agreements and in sync with the investment progress of countries in the region

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In the plan to restructure the railway industry, the Government aims to build 9 new railway lines, 2,362 km long in the period 2021-2030 Vietnam Railways also has the potential to connect with the Cambodia Railway network, Thailand and Malaysia to reach Singapore and Laos railway when developed

2.2.2.2 Railway network planning

National railway network up to 2030: existing railway lines include 07 lines, total length of about 2,440 km:

Hanoi - Hai Phong route from Gia Lam station to Hai Phong station: single track, width 1,000 mm, length 102 km

Hanoi - Thai Nguyen route from Dong Anh station to Quan Trieu station: single track, cage gauge of 1,000 mm and 1,435 mm, length of 55 km

National important projects, first investment projects:

Hanoi - Lang Son route from Hanoi station to Dong Dang station: single track, double gauge 1,000 mm and 1,435 mm, 167 km long

North-South high-speed railway line from Hanoi to Ho Chi Minh City (priority is given to deploy the Hanoi - Vinh section and Nha Trang - Ho Chi Minh City section)

To renovate and upgrade existing railway lines

Deploy new railway routes and sections to enhance connectivity (prioritize construction of routes connecting seaports in Hai Phong, Cai Mep - Thi Vai, and Hanoi railway hubs)

Waterway transportation

2.3.1 Infrastructure

Vietnam has about 47,130 km of waterways - playing an important role in transporting both people and goods The tributaries of the Mekong and Red Rivers form the most important waterway networks Inland waterways transport about 4.7% of

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