1. Distribution channels : Travel agents & Tour operator

2. Distribution Systems The process which moves the product from production to consumption stage is called distribution. Two factors make the distribution of the tourist product unique: The consumer must go to the destination The tourist product is highly perishable It is important to understand the sales distribution systems and their role in influencing sales. 3. clarice / 20113 Distribution Channel Functions Members of the marketing channel perform many keys function: 1. Information- Gathering and distributing marketing research intelligence information about the marketing 2. Promotion Developing and spreading persuasive communications about an offer 3. Contact Finding and communicating with prospective buyers 4. Matching Shaping and fitting the offer to the buyers need, including such activities as manufacturing, grading, assembling and packaging 4. clarice / 20114 Distribution Channel Functions 5. Negotiation Agreeing on price and other term of the offer so that ownership or possession can be transferred 6. Physical distribution transporting and storing goods 7. Financing Acquiring and using funds to cover the costs of channel work 8. Risk taking Assuming financial risks such as the inability to sell inventory at full margin 5. clarice / 20115 The Chain of Distribution PRODUCER INTERMEDDIARIES RETAILERS CONSUMERS 6. clarice / 20116 The Chain of Distribution Two level Distribution Channels PRINCIPLES TRAVEL AGENTS TOURISTS 7. clarice / 20117 The Chain of Distribution Three level distribution channels PRINCIPLES TOUR OPERATORS TRAVEL AGENTS TOURISTS 8. clarice / 20118 The Chain of Distribution There are some general consideration when choosing the channels distribution including: a) Cost b) Control and level of services c) Efficiency 9. Distribution Systems Direct Distribution System Sales are realized through direct contact Advantages Time saving by direct communication Increased profits no commission to any middleman Flexibility make possible changes Greater Control feeling of comfort and security in transaction Disadvantages High cost of sales force Possible reaction of dissatisfied intermediary 10. Distribution Systems Indirect Distribution System Use one or more travel intermediaries Benefits of customers Professional consultation Greater variety Lower price Single payment 11. Travel Intermediaries Tour Operator Designs Prepares Promotes Executes Supplier Tour operator Travel agent Air travel + lodging + meals + entertainment + ground transportation + sightseeing tours + special entrance fees Sales of tour packages Tour Operator: A company that operates as an intermediary between the travel product supplier and the retail travel agent in the marketplace, generally provides such as information and reservations to travel agents. (Tour operators often operate as wholesalers, but usually when they are involve in some form of product packaging) 12. Travel Intermediaries The Role of Tour Operators Purchasing in bulk Buying power and ability to negotiation Financial security to suppliers and large sales Types of Operators Inbound operators Outbound operators Domestic operators Independent operators Airline operators Wholesale travel agent Specialty operators Travel clubs 13. Travel Intermediaries The Travel Agent Definition: A licensed travel product retailer that provides travel information, reservations and other forms of assistance to consumers, companies and groups in making travel arrangements. Final link in the consumption process Connecting the receiver and the source (supplier or wholesaler) Representative selling products Legally a travel agent is a commissioned agent or an authorized representative. Maintains a delicate balance between serving the client and promoting the interests of the principles the agent represents. 14. Travel Intermediaries Regulation and Intermediaries Travel Agents o Some states require a license o Where a license is not is not legally obliged, certification or accreditation consists of approval from industry conferences o Minimum bond and minimum cash reserve o Minimum experience o Travel agents have a legal obligation to perform in a professional manner Tour Operator o A local business license and compliance with governmental and airline regulations are required o Some monetary constraints 15. The Impact of Technology on Travel Distribution Systems The Link between Technology and Tourism Changes in market and mentality o Travel marketers realize that they are not only in pleasure or business travelers but also in the business of communication and information. Group vs. individual travel o Developing of mass tourism Need for technology o The use of technology to gather, manage, distribute, and communicate information. 16. The Impact of Technology on Travel Distribution Systems Computer Reservation Systems (CRS) Beginning in the Airline Industry Introduced in 1960s for keeping track of the seats sold Become a reservation system in 1970s. Linking Systems Interconnection between CRS in 1976 Alliances within Industry Different travel suppliers linked their reservation systems Global Distribution System 17. Global Distribution System GDS Starwood CRS Marriott CRS Choice Hotels CRS 18. Traditional GDS Role CRSs TAs Airline Consumer 19. The Impact of Technology on Travel Distribution Systems Ticketing Automation Satellite ticket printers (STP) Electronic ticket delivery network (ETDN) Electronic Kiosks Ticketless Travel The Internet Both complement and substitute Advantages and disadvantages The Future Elimination of intermediaries On-line operations 20. The End