DISTRIBUTION CHANNELS IN THE TOURISM AND HOSPITALITY INDUSTRY

are a set of independent organizations involved in the process of making a product or service available to the consumer or business user.

Distribution Channels

move goods from producers to consumers or move consumers to where tourism products and services are. It overcomes the major time, place, and possession gaps that separate goods and services from those who would use them

Distribution Channels

is the "place" aspect of a company's marketing mix. It provides an adequate framework for making a company's products or services available to the consumer.

Distribution Systems

It is a set of different organizations, independent or not, that are involved in the process of making products and services available for use or consumption. ________________ are often used to move the customer to the product

Distribution Systems

Factors that Increased Its Importance

Competition
Globalization
Electronic Distribution Techniques
Perishability of the Product

There is a growth of both local and international competitors. Tourism products and destinations cannot just wait for people to come, they should be able to invite them to come.

Competition

With _________ and the growth of foreign partnerships, systematic distribution networks need to be developed to enhance competitiveness in the global arena

Globalization

The growth of technology has given rise to international reservation systems which give consumers better access to travel products and services.

Electronic Distribution Techniques

The concern on tourism product's perishability may be addressed by easier access to its purchase through the availability of distribution channels

Perishability of the Product

Distribution Channels and Its Functions

Information
Promotions
Contact
Matching
Negotiation
Physical Distribution
Financing
Risk-taking

Distribution channels are exposed to information about what the market needs and wants. They can gather marketing research and intelligence information about the marketing environment.

Information

Distribution channels help in developing and spreading persuasive communications about a company's current offer

Promotions

Distribution channels are the company's link to finding and communicating with prospective and current buyers

Contact

Distribution channels know what the products can do and what the buyer needs; hence, they can shape and fit the offer to these needs

Matching

Distribution channels represent the company to the consumer during negotiation. Hence, they are equipped to settle on pricing and other terms for purchase and acquisition of products and services

Negotiation

Distribution channels handle the physical transport of goods and services to its consumers.

Physical Distribution

Capital outlay of distribution channels should cover for the costs involved in the actual distribution of the products. Channel work entails resources to pursue its effectively.

Financing

The distribution function comes with financial risks such as the inability to sell inventory at full margin, losses, pilferage, etc. Assuming such risks is part of the distribution channel's functions

Risk-taking

Marketing Intermediaries

Travel Agents
Tour Operators/Wholesalers
Travel Specialists
Hotel Sales Representatives
Government Tourist Associations
Consortia
Reservation Systems
Global Distribution Systems

Concierges

These are the most widely used marketing intermediary in the tourism industry. ________ offer a wide array of products and services from transportation to accommodations and tour packages. ___________ have four distinct functions: a. distribution and sales network; b. reservation and ticketing; c. information provision and travel counselling; and d. design of individual itineraries

Travel Agents

These are organizations that offer packaged vacation tours to the general public targeting the leisure market. The tour package includes transportation and accommodation as well as meals, ground transportation, entertainment, and activities. Some tourist markets find such products too stiff and inflexible

Tour Operators/Wholesalers

are organizations that focus on one or more functions of the distribution system. Examples of such tour specialists are educational tour specialists who focus on schools, colleges, and universities in servicing educational field trips.

Travel Specialists

sell hotel room, function rooms, and other services in a particular market area. Hotels have found it more efficient to hire local hotel sales representative in profitable key cities instead of sending its hotels sales executives to do personal selling in the area. Hotel sales representatives can carry different non-competing hotel brands simultaneously. They are paid a straight commission

Hotel Sales Representative

National, regional, and local tourism agencies or offices are an excellent way to bring information to the market and gain bookings. They usually market their locality to tourists and carry with them the different establishments, properties, and attractions within their territory.

Government Tourist Associations

is a group of hospitality organizations that is allied for mutual benefit of the members. It allows a property to be independent in ownership and management while gaining advantages of group marketing

Consortia

are entities that provide central reservation system for hotels. They provide the system for small chains by providing overseas reservation service through a local number. Reservation companies earn revenue by charging for each reservation they book.

Reservation systems

such as Amadeus and Galileo are computerized reservation systems that serve as product catalog for travel agents and other distributors.

GDS

The hotel front office staff are usually the most frequently asked hotel employees about the nearest restaurants, shopping malls or attractions. As such, the __________, bell staff, and front desk clerks should be ready with good recommendations

Concierges

_______ may arise between channel members when one member of the distribution system perceives another to be engaged in behavior that may hinder the other member from achieving their goals. These conflicts may either be horizontal or vertical.

Conflict

____________ conflict arises within the same level of distribution channel while _________ conflict ensues between members at different levels of the same distribution channel

Horizontal, Vertical

Selecting Channel Members

1. Knowing the needs of your customers.
2. Attracting channel members.
3. Studying economic feasibility.
4. Maintaining control.

One of the most important aspects of distribution is its location. Business whose customers come to them, must be conveniently located and accessible. However, ___________

there is no formula for choosing a location.

Four general steps in choosing a location and these are as follows

1. Understanding the marketing strategy and target market of the company.
2. Analyze the regional location and select geographic market areas.
3. Select an area within the chosen geographic region taking into consideration the demographic and psycho graphic characteristics of the market in the area, competition, and growth potential.
4. Choose an individual site that is compatible with the business

is a method of doing business by which a franchisee is granted the right to engage in offering, selling or distributing goods or services under a marketing format which is designed by the franchiser

Franchising

is an authorization granted to someone to sell or distribute a company's goods and services in a certain area, or a business established or operated under such authorization.

Franchisee Agreement

is an organization or person that purchases a brand name to distribute a product or service

Franchisee

is the parent company of a franchising distribution network. The franchiser lends its name, brand, and reputation to the franchisee. In addition to name affiliation, franchise agreements should provide franchisees with the traditional support, financial support, safeguards for the business, auditing, reservation system, and sales support

Franchiser

is another form of geographic distribution channel. It is an arrangement between two companies that have decided to share resources to undertake a specific, mutually beneficial project.

Strategic Alliances

is less involved and less permanent than a joint venture, in which two companies typically pool resources to create a separate business entity. In a strategic alliance, each company maintain its autonomy while gaining a new opportunity

Strategic Alliances

could help a company develop a more effective process, expand into a new market or develop an advantage over a competitor, among other possibilities.

Strategic Alliances

is an easy way for consumers to have food conveniently brought to where they are. Fixed delivery numbers of most restaurants is also an added factor, as consumers remember it more easily. With the development of efficient software, customer's telephone numbers and addresses are already recorded. The telephone agent just needs to verify and take the orders

Delivery system

enables restaurants without its own delivery facility to have access to this distribution system. With the advancements in technology, more distribution system will be available.

Quick Delivery

expands the way the products are availed and increases cost per cover for restaurants

Delivery systems