Hello students! Welcome to our lesson for today. Today we are going to discuss about Tourism Distribution Channel. Are you ready?
Let's start! In this chapter, we are going to define Tourism Distribution Channel, describe the types of travel intermediaries, discuss the functions of specialty intermediaries, compare travel agents with tour operators, describe the distribution channel. explain the relation of distribution to marketing, and discuss the distribution strategies. So first, let us define the distribution channel. So distribution channel is a chain of intermediaries which distribute the product from the supplier through the different channels until it reaches the final consumer of the product.
So the tourism distribution channel produces the link between the suppliers of travel services and the consumer. And according to Robert McIntosh, it is an operating structure, system, or linkage of various combinations of travel organizations through which a producer of travel products describes and confirms travel arrangements to the buyer. So here is the figure of a tourism distribution channel.
So we have... two ways in distributing our product. So it might be directly or indirectly.
So when we are going to use the direct distribution of our product, the product from the supplier, for example, our suppliers, we have the transportation, lodging, food, sightseeing, etc. They sell directly their product to the consumer without passing any travel intermediary. While when we are going to use indirect distribution channel, the product from the suppliers passes through travel intermediaries such as wholesalers, retail travel agents, or mass outlets before it reaches our consumer.
So what are the functions of travel intermediaries? Intermediaries can achieve better results in the field of distribution and selling than the producer himself through specialization because actually they can rearrange the product that they are selling to the tourist or to the consumer. They can add on some services which are not originally sold by our supplier.
So in that way, they can achieve better results. Intermediaries also assemble the heterogeneous service of different producers into a package of services that is meaningful and attractive to the customer. And intermediaries not only create a complete package of tourist services, but also sources of information about destinations, types of services, and their advantages and disadvantages.
So here... are the different travel intermediaries. So we have the travel agents, tour operators, and specialty intermediaries.
First is the travel agents. So travel agents arrange travel services from suppliers. So the basic job of a travel agent is they assist the travel needs of our consumer. So we have two types of travel agents. We have the wholesaler and retail travel agents.
For wholesaler travel agents, they organize tour packages which are sold to the public through a network of retail agents. While retail travel agents, they sell travel services directly to the consumer. Next is tour operators.
Tour operators deliver the services specified in an advertised tour package. So when we say tour package, it is a combination of two or more travel services components put together and sold as a single unit. So these components are transportation, accommodation, attractions, tour guide fees, etc.
So they are put into one package. package by the tour operator and then the tour operator sell it. through the retail travel agents or sometimes directly to the consumer. So we have also here the receiving or inbound agents.
So they act as ground operators who specialize in services for incoming visitors. So their main target market are foreigners who visit their destination. Next is specialty intermediaries.
So example of these are incentive travel firms, meeting and convention planners, hotel representatives, interline representatives, association executives, corporate travel firms, travel consultants, and motor coach brokers. So they are called as specialty intermediaries because they focus on a specific. So for example, for hotel representatives, their main line of product is basically hotel supplies.
Like selling the rooms, hotel representatives call out potential market. For example, us. There are some hotel representatives who call us because they are inviting us to stay in their hotel. So in this case, they are selling their hotel services.
So these intermediaries may represent either buyers or suppliers and have the power to influence how, where, and when the travel product will be distributed. And specialty intermediaries may receive commission fees from clients. So next is...
Here is a figure of the different product distribution channels. So products may be distributed directly from the product supplier to the consumer channel, or it might be indirectly distributed from a product supplier through a travel agent before it reaches the consumer channel. Or sometimes the product passes through a tour operator and then before it reaches out the consumer channel. Or sometimes too from product supplier to tour operator to travel agent to consumer channel. So here are the different types of distribution channels.
So first is the consensus channel. So in this channel, There is no part of the channel that exercise control over the system. And participants in the system work together for their mutual interest.
So it's kind of like a networking wherein networkers work together for their mutual interest. Next is vertically integrated channel. So the functions of production and retail distribution are owned and or controlled by a single company.
So in this case, the products are created or manufactured by a single company and then they themselves sell or retail their own product. Next is vertically coordinated channels. So the tour operator's control over the channel comes from contractual or financial commitments with retail travel agents. So in this case. An example here is franchising.
So the supplier of the product, they have a close coordination with their retail agents or their intermediaries. So now what is the relation of distribution to marketing? So the distribution system is actually part of the marketing mix.
So once marketing objectives... and the appropriate targets have been established, an appropriate marketing mix is then determined. So the chosen marketing mix will reach the market segments and fulfill its objectives. And then the selected system of distribution will affect the parts of the marketing mix.
Because sometimes if the product is distributed Through many travel intermediaries, sometimes it will affect the price. Because the more intermediaries the product passes through, the more expensive it is. Because in most cases, travel intermediaries add up service charge or commission fees to their product. So it becomes more expensive. So here are the different distribution strategies that a product supplier may use when distributing his or her product.
So first is intensive distribution. So eating. involves maximizing the exposure of the travel product by distributing through all available intermediaries.
So an example here is like the airline companies, they use all kinds of platforms to sell their products. So they use their website, they use the global distribution system, sometimes social media. And then we also have the...
travel agents, in the ticketing office, so all available intermediaries. So that is an intensive distribution system. Well, in exclusive distribution system, it occurs when a supplier or wholesaler limits the channels and outlets for the products. So they choose exclusive distributors of their products.
An example of this are automobiles. So for automobiles, you can actually buy a specific brand of a car through their outlets. Next is selective distribution.
So in this case, these are suitable for products that have a high unit price and are not bought frequently and have a high price that is not subject to price cutting. So in here, example of these are expensive products. or luxury brands like smartwatches. So they have selected outlets wherein you can only buy these products to these specific outlets. All right, so that's the end of our discussion for today.
I hope you understand something. And if you have questions, please do not hesitate to ask questions. So you may comment your question below.
So see you again in our next lesson. Goodbye!