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Distribution channels :
Travel agents & Tour operator
Distribution Systems
The process which moves the product from production to
consumption stage is called distribution.
Tw...
clarice / 20113
Distribution Channel Functions
 Members of the marketing channel perform many keys
function:
1. Informati...
clarice / 20114
Distribution Channel Functions
5. Negotiation – Agreeing on price and other term of the offer
so that owne...
clarice / 20115
The Chain of Distribution
PRODUCER
↓
INTERMEDDIARIES
↓
RETAILERS
↓
CONSUMERS
clarice / 20116
The Chain of Distribution
Two level Distribution Channels
PRINCIPLES
↓
TRAVEL AGENTS
↓
TOURISTS
clarice / 20117
The Chain of Distribution
Three level distribution channels
PRINCIPLES
↓
TOUR OPERATORS
↓
TRAVEL AGENTS
↓
...
clarice / 20118
The Chain of Distribution
 There are some general consideration when
choosing the channels distribution i...
Distribution Systems
Direct Distribution System
Sales are realized through direct contact
Advantages
Time saving – by dir...
Distribution Systems
Indirect Distribution System
Use one or more travel intermediaries
Benefits of customers
Profession...
Travel Intermediaries
Tour Operator
• Designs
• Prepares
• Promotes
• Executes
Supplier
Tour operator Travel
agent
Air tra...
Travel Intermediaries
The Role of Tour Operators
 Purchasing in bulk
 Buying power and ability to negotiation
 Financia...
Travel Intermediaries
The Travel Agent
 Definition:
• A licensed travel product retailer that provides travel information...
Travel Intermediaries
Regulation and Intermediaries
 Travel Agents
o Some states require a license
o Where a license is n...
The Impact of Technology on Travel
Distribution Systems
The Link between Technology and Tourism
Changes in market and men...
The Impact of Technology on Travel
Distribution Systems
Computer Reservation Systems (CRS)
Beginning in the Airline Indus...
Global
Distribution
System
GDS
Starwood
CRS
Marriott
CRS
Choice Hotels
CRS
Traditional GDS Role
CRSs TAs
Airline
Consumer
The Impact of Technology on Travel
Distribution Systems
Ticketing Automation
 Satellite ticket printers (STP)
 Electron...
The End
Distribution channel
Distribution channel
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Distribution channel

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Distribution channel

  1. 1. Distribution channels : Travel agents & Tour operator
  2. 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. 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 buyer’s need, including such activities as manufacturing, grading, assembling and packaging
  4. 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. 5. clarice / 20115 The Chain of Distribution PRODUCER ↓ INTERMEDDIARIES ↓ RETAILERS ↓ CONSUMERS
  6. 6. clarice / 20116 The Chain of Distribution Two level Distribution Channels PRINCIPLES ↓ TRAVEL AGENTS ↓ TOURISTS
  7. 7. clarice / 20117 The Chain of Distribution Three level distribution channels PRINCIPLES ↓ TOUR OPERATORS ↓ TRAVEL AGENTS ↓ TOURISTS
  8. 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. 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. 10. Distribution Systems Indirect Distribution System Use one or more travel intermediaries Benefits of customers Professional consultation Greater variety Lower price Single payment
  11. 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. 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. 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. 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. 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. 16. The Impact of Technology on Travel Distribution Systems Computer Reservation Systems (CRS) Beginning in the Airline Industry Introduced in 1960’s 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. 17. Global Distribution System GDS Starwood CRS Marriott CRS Choice Hotels CRS
  18. 18. Traditional GDS Role CRSs TAs Airline Consumer
  19. 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. 20. The End

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