MINISTRY OF EDUCATION AND TRAINING
UNIVERSITY OF TRANSPORT AND COMMUNICATION
LE TIEN DUNG
RESEARCH APPLICATION MARKETING
SOLUTIONS TO RAILWAY PASSENGER
MAJOR : TRANSPORT ORGANIZATION AND
MANAGERMENT , Code No : 62.84.01.03
SUMMARY OF ECONOMIC DOCTORAL THESIS
HANOI - 2014
The Thesis is completed at : Hanoi University of Transport and
Supervisor : Excellent teacher, professor, Ph.D.Nguyen Huu Ha
The Thesis will be presented and approved by the Board of
Doctoral Thesis Examination Board
Presentation Hall : University of Transport and Communication.
At: ….…. Date …. Month……..Year 2014.
The subject’s urgency
The railway passenger transportation is comparetating with other
services such as road transport, airline ....which have special
advantages. Meeting to the demand of passengers on this service
and being able to compete with rivals as well has become the
biggest challenge for transport enterprises in general and for
railways in particular. In order to increase the transport market
share as well as the service quality with the limited resources , we
need to rerearch and apply marketing services to business of the
railway transport enterprises. Marketing solutions researching
applied for railway passenger transport is urgent, contains the deep
theoretics and practical meaning for the development of railway
Therefore, the Author has chosen the subject “ Rerearching the
marketing solutions applied for railway passenger transportation “
The research purpose :
This thesis’s purpose is systematization the basic knowledges of
marketing, expreriences and practical application of marketing to
Researching the marketing theory and using the marketing
solutions to implement the business of railway passenger
transportation in Vietnam.
Rerearching the marketing solutions to assist and make the
business of Vietnam railway passenger transportation more
Researched scope :
As the railway business field is huge, the Author just concentrated
in studying the main contents of marketing works in the railway
Establishing the theoretical basis and marketing proposals to renew
the railway transport business , improving efficiency and
competition of railway transport business in new condition.
Science and practical meaning:
Although, there are many research fields about organization,
business structures of railway transportation, the rereaching the
method to apply marketing to railway transport operation is still
new field which contains the science and practial meaning.
Summary of researched objects:
In order to apply the marketing services to control and manage
railway passenger transport basically and scientifically, must be set
the tasks as following :
Abroad marketing research projects
We have to base on the marking research projects from abroad.
There are many records of marketing research. However, we
mainly study the English documents such as ,  ( please find
the attached document)
- There is not any projects researching of transport marketing field
which we should develop. The research projects , ...
other in Vietnam in foreign languages have just studied of general
marketing, not concerned to transport marketing except one book
wrote in Russian language .
- Internal Marketing research projects
Regarding to marketing researches deeply for transport business
field , there are several hereinafter projects :
+ Projects  are the first enforces to apply marketing subject to
training program of University of Transport Technology. The
Projects ;  with the closed cooperation of railway sector, has
considered carefully and implemented marketing in the railway
transport business. Investigation methods, reports, information
settlement have been perfectly done. The project  has specially
studied the aspects of operation marketing such as proposal to set
up organization, human resources for marketing jobs… A part of
this project has been applied practically by Vietnam Railway.
However, these above projects have not been uniformed totally
about the theoretic and theory of development marketing in the
railway sector. The marketing solutions have not been really
effective yet. Currently, theory framework to create Mix marketing
policy of these above projects - 4P is fossilized. The application of
marketing system in passenger transport of railway sector still
obtains many unsolved omissions relating the theory aspect.
This Thesis used the synthetic of methods such as : Investigation
method, statistic method, analysis method, systematization method,
competitive knowledge logical method, social psychology ;
appraising specialist method, prediction method, optimization
method…to research the current real situation of marketing
activities in the railway sector.
The thesis’s contributions
Systematizing and theoretical concertizing marketing for
transport field. Based on the research results, characters of
transport services and technical exploitation conditions of railway,
this thesis has proposed the new marketing policy, it is 7P + S. This
is basic guideline to settle the marketing works concerning to
Developing the research methodology of passenger’s
behavior. Developing a theoretical base for the renewal of the
marketing applications into the passenger transportation business in
accordance with market.
Developing the solutions to apply Marketing to the railway
passenger transportation such as : increasing transportation market
the transport schedule to ascertain the
Developing the methods to analysis the customer’s
behaviors in using railway transport, setting up the marketing
activities in Vietnam Railway General Corporation..
Developing the marketing information system, designing
new products for passenger railway transport services, setting up
the freight price policy, distributing products, marketing promotion
and improving the services for supplying ticket.
The thesis’s frame : Opening, Conclusion, Recommendation, The
main content of this thesis includes 3 Chapters, 150 pages, 29
sheets, 18 charts
OVERVIEW OF VIETNAM RAILWAY CORPORATION
RAILWAY PASSENGER TRANSPORTATION
1.1 Summary of Vietnam Railway General Corporation.
The Vietnamese Prime Minister has issued the Decision 1883/QDTTg regarding to establishing the Head Corporation – Vietnam
Railway Corporation on 13th November 2009. Afterward, on 25th
June 2010, The Vietnamese Prime Minister has issued the Decision
973/QD-TTg converting Vietnam Railway Corporation to
Company Limited One Member, Owned by State. Head office of
Vietnam Railway Corporation locates at No 118, Le Duan Street,
1.1.1 Current Organization Chart of Vietnam Railway
BOARD OF MEMBERSHIP
GENERAL DIRECTORS AND
- Hanoi, Saigon Railway
- Healthy Railway
- UPS Centre
- DiAn Train Co.,Ltd
– one member
- 11 Services and material
- 2 Railway Printing JSC
- 15 Constructions JSC
- 3 Machenic JSC
- 15 Railway
- 05 Railway Signal
- 6 Project
- Railway training
Chart 1.1: Organization Chart of Vietnam Railway Corporation
1.1.2 The branches of Vietnam Railway Corporation and current
status of material and technical foundation.
Railway length total is 3.141,69 km including 2.632 km main
railway, 402,69 km station railway, 107,95 km sub-railway
(excluding over 100 km railway managing and exploiting by other
enterprise : Lao Cai Apatit Company, Vinacomin)
1.2. Railway passenger transportation
This Thesis has recommended aspect of railway passenger
transportation. Business result of Railway transportation in
Vietnam these years is descripted in hereinafter sheet:
Sheet 1.4: Commodities , passengers, luggage transportation
Income from passenger
Railway Luggage (tons)
quantity (tons . km)
Income from luggage
Income Total (1000 vnd)
2.360.291.957 2.682.723.677 2.921.801.720
2.421.527.855 2.747.426.902 2.991.960.370
(Vietnam Railway Statistical Yearbook)
1.3 Marketing activities in Vietnam Railway Corporation
Current status of marketing activities in transport business of railway
sector is presented via the factors such as market, product, competitor,
product contribution and macro environment. For the Railway sector,
neither General Corporation or Station Units does not have separated
Marketing department, all departments are appointed to undertake
Almost the railway products are distributed directly
By this performance, the customers is hard to purchase, the
railways products also have not widely advertised, the price
policies have not supported , these reasons reduced the attraction of
Conclusion : Therefore, railway enterprises in our country have
operated specially: trading and services. Trading is known as
using income from transportation to cover all transport activities
without funding from State. Service is known as keeping trains
running the routes which are lose, without benefit to guarantee the
normal economic circle of society. In this circumstance, railway is
the hot topic, requested for reasonable solution to adjust. It is the
serious imbalance in the transport demand of passengers annually.
THE THEORETICAL BASES APPLICATION MARKETING
TO RAILWAY PASSENGER TRANSPORTATION IN
2.1. The conception of marketing , transport marketing.
2.1.1 The conception of marketing
In this Thesis we define the meaning of Marketing as : Marketing is
science subject specially studying to create popular products and
their consumers the most useful for the enterprise and society.
2.1.2 Marketing definition in the transport field.
Marketing work is not the sole responsibility of passenger station’s
staffs, train operators, is the common task of all officials and
employees in the railway transportation sector.
2.1.3 Analysis the fluctuation of transport business environment
In order to apply Marketing to transport sector we have to fully
understand its production business environment to find out the
reasonable measure to enhance the development of production
business. The railway transport business environment is controlled
by other sectors’ business environment and by inner sector. The
conversion mechanism of economic management in Vietnam from
the central planning to international integrations has changed the
factors relating to railway business field.
2.2. Market research and consumer’s demand of transportation
2.2.1. Transport market and its specifications
Transport market : Market is the place happened the purchasing of
commodities or services, there are many definitions for Market.
Transport market’s specification:
Transport products don’t have form, dimension, transport
manufacturing procedure does not make the new product, just
transporting commodities and passengers from this location to
Transport procedure is happened in the large area, among
provinces, areas in a country or even international locations
The effective factors to transport market.
- Factor group includes Society, politic and psychophysiology
- Factor group includes macroeconomic management and micromanagement
- The micro-management of transport enterprise as following :
- Factor group includes natural condition.
Analysis the business environment of transport enterprises
B1. The macro environment of transport enterprise
- People factor:
- Economy factor includes:
- Natural factor:
- Science technology factor:
- Politic factor:
- Cultural Factor
B2. The micro environment of transport enterprise
- Public :
Research the competition of enterprise
Price, the differences in product, product quality, supply capacity,
well advertising, working performance.
Measure and predicate the demand of transport market
Demand of transport market consists the transport goods and
passengers undertaken by transport means
2.2.2. Transport demand in the market
The concept concerning to passenger transport demand.
The trip: is a travelling according to 1 direction in the preset
timeframe between 2 locations, normally 2 different locations in
the particular route, basing on the certain transport mean.
Travelling demand: is the number of longest trips of people
within a period in the research area.
Travelling demand by railway: is the total of travelling
demand of passengers by railway in a period
2.2.3. The Market share of Passenger Transport.
The market share of transport and effective factors
The transport market share of any transport means (or transport
enterprise) is the scope of transport demand which obtained by that
transport mean or enterprise and total of transport demand in the
market. The transport market is effected by elements such as scale
factor, the character of transport demand, geographic location,
natural condition, publication.
2.2.4 The market share of railway transport
With the length of rail network which is not too long, around over
2400 km, running through 30 provinces, Vietnam railway is a key role
in the passenger transportation of our country. In these years, the
market share of railway transport is always reduced by affection of the
international integrations market mechanism.
of the transport
competitions among them
to select the
- The competition among enterprises with the similar transport means
purchasing with the different transport means
- The -competition
processing and demand of passengers
2.3.1 The transport processing of passengers
-Check in and get the luggage receipt
The passenger’s processing is implemented as following :
- Request for hand caring bags
- Demand of relax, shopping in the departure hall
- Demand in the transport means
- Demand at the arrival hall
Chart 2.4. Passenger’s transport processing
2.3.2 Demand of Passengers in transportation:
Passenger transportation has been developed in quantity and quality
these years. The number of passengers travelling for business trip,
study, tours and foreigner has increased.
2.3.3 Passenger’s demand travelling by railway
The demand of passenger travelling by railway includes : safety,
ontime, fast, convenience, comport and ticket price
2.3.4. Overview the passenger’s psychology.
Based on the psychological field , demand creates the motive, when
the condition is met, motive will create action. During the acting
enclosing the diverse psychological processes which will affect
directly to the result of action.
2.3.5. Classification Passenger
In order to classify the market, this thesis has proposed the
classification passenger as following:
The trip’s purpose
The request to be served
The distance transport
The social component
2.3.6. Investigation the passenger’s opinion
Investigation must ensure the science, general summary and detail.
After finishing, you must summary the ideas of passengers in
accordance with contents:
- Research the behaviors of railway passengers
- Consider the comfortable level (%) of passenger
- The most comfortable thing of passenger
- What makes passenger unhappy
- what makes passenger strictly reaction
- Other matters are not descripted in the poll forms
- Organization method to ask for passenger verification
2.4. The specifications of research activities and application
Marketing in transport sector
Marketing in transport sector is new science subject and related
document is almost from abroad, So Marketing research in
transport field should be implemented following the certain
procedure. This procedure is displayed in hereinafter chart:
airline and railway
theoretical base for
in Vietnam Raiway
Chart 2.5. Research procedure Marketing in Vietnam railway sector
2.5. Determining the Mix marketing policy for railway
Firstly, we consider the passenger transportation is a service and
we have some elements creating Mix marketing framework as
Marketing framework mix 7P with elements approved and used in
some marketing researches in transport services as a perfect
equipment. However, if we carefully research these above
researches we will find that the policies creator has dismissed an
important factor which come from the specification of passenger
transportation. The difference with other normal business fields the
employee to server in the passenger transportation is human. First
of all, under the humanism, the employee need to be protected and
taken care at the best. While other factors can accept the relativity,
safety requirement must be absolutes. This factor is very important
affecting to the results of the transport business, because the
passengers always consider the safeness is the most important thing
to select any transport services.
As the safeness is not an independent element in the Mix marketing
frame, so the research projects to build the marketing policy
usually do not attach special importance to it. Many research
projects do not mention to the safeness, or spare writing. In order to
make it to be received the attention as it should be, we need to
consider it as an important element in the Mix marketing frame.
MIX Marketing frame
Chart 2.7. Marketing frame- MIX 7P+S
Therefore, we should supplement the safety factor in the theoretical
marketing policy. We can suggest to apply this theoretical frame to
the marketing policies in the passenger transport services as
The above marketing frame can be 7P + Safety. The factors in that
mix marketing frame such as : product, procedure, price,
distribution, service promotion, material environment and Labor
supplying services. We just clarify the Safety factor.
The safety is peaceful status, without dangerousness, without
problem happened in the passenger’s trips.
The safety includes :
Keeping safety for passengers whole their trip. This object is top
priority in the design section the transport service products. It is
noted that , in the Mix marketing frame, the product policy and
safety policy are separated but they directly concern to each other.
It’s simple that whenever passengers select any transport service
products they always care about its safeness.
Ensuring that passengers can be taken care and healthy whole their
trips. This period is calculated from departure time to arrival time.
The passengers can be received insurance indemnity for any
risks happened or for the bad service quality.
By these above contents, the research scope of safeness must be
included macro policies of safety, the technical specification
exploitation process, infrastructure, the railway technical
equipment…and other factors relating to railway transport safeness.
Addition the safety factor into Mix marketing frame (7P) shall
make this factor getting the attention and research of safety in the
marketing policies more completed. All the policies ultimately are
built to serve people, so we can not make light of this factor role in
the marketing policies.
2.6. The principles to select Marketing solution for the transport
- Based on the technical economic bases.
- Marketing applications must follow the general regulations
concerning to marketing activities issued by the railway sector.
- Marketing solutions must be synchronized
- Marketing solutions must be practically tested.
- Marketing solutions must be verified and adjusted
2.7. The passengers ‘selection of journeys.
a/ The options for journey from i location to j location:
Firstly, we list all options for journey. The process of interaction
between supply and demand had created the option for journey
from i to j location. Each option may include one or several of
transport means, may directly travel or transit
Please prefer to the relative typically options for the journey from
Haiphong to Dalat via hereinafter chart.
Chart 2.8. Options for journey from Haiphong to Dalat
- 1st option : Haiphong - Dalat by car bed , non-stop
- 2nd option : Haiphong - Saigon, then Saigon – Dalat by airline
- 3rd option : Haiphong - Danang, then Danang –Datlat by airline
- 4th option : Haiphong –Hanoi by bus, then Hanoi – Dalat by
- 5th option : Haiphong – Hanoi by bus, Hanoi – Nhatrang by train,
Nhatrang – Dalat by bus
- 6th option : Haphong – Hanoi by train, Hanoi- Saigon by train,
Saigon – Datlat by bus
Sheet 2.4. The journey option’s specification
Option Option Option Option Option Option
( Datasheet of annual everage ticket price for transport means in 2013).
The specifications of these options are bases for the passengers to
chose. Each passenger has her/his own view on each option. To
know their selletion we must analyis and figure to some different
b/ Analytics the passenger of each journey.
Each passenger has her/his own characters which are selfom
changed such as healthy, income....however, there are change
requirements for each trip/journey , depening on their trip’s
purpose. Basing on the selection of passenger which is depened on
many factors, we shall descrip the main kinds of passenger as
Using these 3 criterions for description the passenger’s portraits of
the journey from i to j location.
- Estimated arrival time : Hard means on time (signal a1) ; Soft
means arrival before or after estimated time. (signal a2)
- Travelling time : Closed means rush travelling (signal b1);
Comfortable means unlitmited time (signal b2)
- Expenses ability : Unlimited (signal c1), Limited (signal c2),
Difficult ( signal c3)
Basing on these above criterions we can indicate the passenger’s
portraits in detail :
- Group of passengers who need to arrive ontime, need to departure
urgently with 3 different financial abilities a1.b1.c1- passenger T1 ;
a1.b1.c2 – passenger T2 ; a1.b1.c3 – passenger T3
- Group of passengers who need to arrive ontime but having much
free time, with 3 different financial abilities a1. b2. c1 – passenger
T4 ; a1. b2. c2 - passenger T5; a1. b2. c3 - passenger T6.
- Group of passengers who don’t need to arrive ontime but limited
time with 3 different financial abilities a2. b1. c1 - passenger T7 ;
a2. b1. c2 - passenger T8; a2. b1. c3 – passenger T9
- Group of passengers who don’t need to arrive ontime and having
much free time with 3 different financial abilities a2. b2. c1 passenger T10; a2. b2. c2 - passenger T11; a2. b2. c3 -passenger
c/ The passenger’s selection of journey option.
With the specifications of options (sheet 3.2) and passenger’s
characters, the passenger can sellect the best option basing on these
criterions : D1-travelling time ; D2-non-stop/no transit; D3- means’
amenities ; D4 – travelling cost; D5- safety level.
Basing on the each option and 5 above criterions each passenger
can approbate each options by their own ways. If scoring, , each
criterion can get score such as : score 0 means very bad, score 1 means
acceptable , score 2 means passable , score 3 mean good.
The option with the highest score is priority sellected by the passenger.
Inwhich : Dti,j is the score given by passenger i for the option j.
Dj, k is the score for the criterion k of the option j.
However, different passengers will give different scores for the
same option, same criterion.
The formular (2.1) creates the 3 visions, are score given to the
criterion k of the option j by passenger. With 12 different
passengers we can separate into 12 twin visions. The hereinafter
sheet is 2 of 12 twin -visions
Sheet 2.5 Passenger T1 give scores for options.
The passengers T1 need to arrive ontime, the limited time, they have
money and of cause they approve these 6 options with above scores.
So, they will sellect option 2 and 3
Sheet 2.6. Passengers T11 give scores for options.
The passengers who have much time but their financial ability is
limited, they approve these 6 options with different scores, meaning
they will sellect option 5 and 6.
Analysic to recognize the actions of passengers has the pratical
meaning for transport enterprises to set up strategic for investment
2.8 Developing the methods to measure the passenger’s
Research the customer’s behavior is the important job of transport
marketing science. To attract more customers, the transport
enterprises must understand the customer behaviors and their
thinking, to marketing customers use their service. Currently, there
is not any theoretical research records which can fully explain why
the passenger select this transport means or another for his/her
journey. In order to catch the passenger’s actions we have to apply
science subjects such as philosophy, sociology, psychology,
economic...to create the science bases for customer. The seletion
transport services of passengers is not simple, it is affected by
many factors. Research and analysis carefully that affected factors
is the important responsibility of transport marketing.
By the theoretical research and practical using transport services of
passengers these years we can descrip the passenger’s behaviors as
chart 2.9. Chart of passenger’s behavior in selection transport services.
The key research is the connection among the attractive objects of
marketing and passenger’s actions. This above chart is a black box
which covers the relation on the same environment. The marketing