Download
organizations in the distribution system n.
Skip this Video
Loading SlideShow in 5 Seconds..
Organizations in the Distribution System PowerPoint Presentation
Download Presentation
Organizations in the Distribution System

Organizations in the Distribution System

317 Vues Download Presentation
Télécharger la présentation

Organizations in the Distribution System

- - - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

  1. Organizations in the Distribution System

  2. Functions of Intermediaries • Provide info about tourism products • Contact current & potential customers • Make reservations & other arrangements • Assemble services to meet customer needs • Prepare tix & make confirmations • Provide databases on customer behavior • Reduce cost of acquiring new customers • Market excess or distressed inventories • Take risks by buying (or reserving) products & then reselling them to individuals or groups

  3. One-Level Distribution Channels • Simplest – straightforward, direct access to suppliers (Customer/Tourist – Supplier) • No intermediaries; the more people involved, the more chance for problems • Easy to deal directly with many suppliers: • Suppliers like direct –no commissions to pay

  4. Internet Technology • Internet enables potential tourists to surf websites of destinations & suppliers • Take virtual tours of attractions & properties • Compare prices & products • Make reservations, select airline seats, etc. • Has increased ease of one-level distribution channels, i.e. airline tix

  5. 2-Level Distribution Channels • More complex – now 3 moving parts • Customer (tourist) – travel agent – supplier • Has intermediary (middleman) – travel agent • Using travel agent has many advantages for both customers & suppliers

  6. Travel Agencies • Travel agent = person • Travel agency = company • Provide important info & sales links • Links between: tourists & tourism suppliers • Using TA, one of most common (popular) ways to buy tourism products\services • Many tourists now use Internet travel agencies: Travelocity, Expedia, & Orbitz • But also: Impersonal, inhuman, & in cyberland

  7. Commission Payments • Travel agencies receive payment in form of commissions (% of sales) from suppliers • TA act as sales offices (branch offices) for countless tourism suppliers • But no moneychanges hands until sales made • TA must work & sell products to make money

  8. Changes to Travel Agencies • TAs no longer paid to process transactions • Airlines lost huge, experienced sales force • TAs developed new sources of revenue

  9. Internet vs. Travel Agents • Consumers have choice in buying travel products • Internet is DC of choice for airline tix • Increases scope & reach of options • Open 24/7 • But requires more work & knowledge by consumers • TA have expertise & human touch • Can save clients time, money, & energy • Can manage entire trip & its details

  10. Travel Agencies • Via websites & emails TA compete with each other regardless of their physical location • Do not own products they sell, so they have little or no inventory or cost of goods sold • As commissions dwindle, markups increase • Large volume agencies often earn override commissions (above the normal percentage) • Destinations experts; make recommendations

  11. Global Distribution Systems • Majority of TA business is done via GDS • GDS provide extensive data on suppliers: • Schedules • Rates & fares • Space availability • GDS can also: • Make reservations • Print itineraries, tix, & invoices

  12. Computer Reservation Systems • TA are linked on-line via one or more computer reservation systems (CRS) built & operated by airlines • Among them are: • Amadeus • Sabre • Galileo • Worldspan 3. CRS make airline reservations, & serve as databases for tourism suppliers

  13. TA: 9 Types & Characteristics 1. Independent: 2. Agency chains (wholly owned): 3. Agency chains (franchised): 4. Consortium-affiliated agencies: 5. Specialty agencies: 6. Corporate Travel Agencies: 7. Corporate travel departments: 8. Home-based agencies: 9. Internet agencies:

  14. 3-Level Distribution Channels • Most complex level • Adds another intermediary that facilitates: • Tour operators • CVB 3. Tourist – travel agent – TO/CVB - supplier • Tour Operators do not get commissions • TO markup prices of products they resell • Elements of Tour Packages

  15. Common Tour Packages • Independent tour: • Hosted tour: • Escorted tour: • FIT (foreign independent travel): • DIT (domestic independent travel):

  16. Independent Tour • Un-hosted tour • Least structured package • Tourist sets own itinerary • Itinerary: schedule of times & places to visit

  17. Hosted Tour • Includes tourism supplier elements provided in an independent tour & maybe even more • But also services of local host • Host gives advice and makes special arrangements for you

  18. Escorted Tour • Most structured type of tour with most complete set of supplier elements • “All-inclusive” tour provides almost everything, i.e. meals • Begins/ends on fixed dates

  19. FIT (Foreign Independent Travel) • Customized tour • Outbound to foreign countries • Includes some tourism supplier elements, depending on tourist’s requests • Often more expensive

  20. DIT(Domestic Independent Travel) • Similar to FIT • Except travels within your home country

  21. 5 Reasons to Buy Tour Package 1. Convenience: 2. One-stop shopping: 3. Cost savings: 4. Special treatment: 5. Worry-free:

  22. Tour Operators • TO: business organizations engaged in planning, arranging, marketing, & operating vacation packages • AKA: tour wholesalers, tour companies • TO work with all sectors of tourism industry • They perform many functions:

  23. Tour Operators Risks • TO are unregulated • No entry requirements for: • Very susceptible to perishability • Must commit to place, products, & prices in advance

  24. Tour Operators Risks • Currency fluctuations: • Natural disasters: • Changing consumer tastes: • Security & Safety Concerns:

  25. Receptive Service Operators • RSO are part of tourism distribution channel • AKA receptive tour operator, ground handler & inbound operator • RSO: a local company that specializes in handling needs of groups traveling to it destination

  26. Consolidators & Travel Clubs • Are combinations of wholesalers & retailers • They perform a unique function within tourism distribution channels • Consolidators buy excess inventory of air tix, then resell them at reduced prices via TA or directly to travelers

  27. Meeting Planners • AKA: event planners & convention planners • MP are intermediaries in meetings industry • MP are employed primarily by: • Corporations • Associations 4. Main function: detailed planning of business & corporate meetings, educational meetings, association meetings, conventions, trade shows, sales meetings, executive retreats, tournaments, reunions, incentive travel, etc.

  28. Meeting Planners’ Decisions • How many people will attend • Where to host the meeting (which destination) • Types of transportation needed • F&B functions needed • Support services needed • Facilities, equipment, & supplies needed • Ancillary activities

  29. Dual Distribution • Suppliers often use more than one distribution channel in their marketing efforts • This is called dual distribution

  30. Tourist Information Sources • Travelers need info before, during, & after a trip about tourism product benefits, prices, & availability • Marketing communications provides this via: • Advertising, public relations, & personal selling • Information is available from national tourist offices (NTOs), convention & visitor bureaus (CVBs), and chambers of commerce • These sources have tool-free phone numbers, websites, & welcome centers/TICs

  31. Familiarization Trips • AKA “fam trip”, “fam tour”, “inspection tour”, “educational tour” • For tourism intermediaries & journalists • To educate them on destination & supplier products & services • They visit destination attractions & suppliers • Goal: increased business from target markets • Uses in-kind contributions from suppliers, so cost is minimal to all concerned – great ROI! • Organizer: NTO, airline, resort, tour operator,..

  32. Personal Selling • Creates customer satisfaction • Cultivates customer relationships • Missionary sales people: call on travel agencies, etc., to provide brochures, solicit business, answer questions, and educate about company products • Effective salespeople are: • Likeable • Dependable • Honest