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Chapter 9 The Distibution Mix in Tourism

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PowerPoint slides for The Tourism System 7th ed. by Robert C. Mill and Alastair M. Morrison, published by Kendall/Hunt, 2012.

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Chapter 9 The Distibution Mix in Tourism

  1. 1. The Tourism System 6th edition Chapter 9Kendall Hunt Publishing Company The Distribution Mix in Tourism Chapter 9 The Distribution Mix in Tourism © 2013 Tourism Australia Copyright Contents Identifies the travel trade intermediaries. Describes the roles of each of the intermediaries. © 2013 Tourism Australia CopyrightRobert C Mill and Alastair M Morrison © 2013 1
  2. 2. The Tourism System 6th edition Chapter 9Kendall Hunt Publishing Company The Distribution Mix in Tourism Purpose Having learned about the tourism distribution system, students will be able to explain direct and indirect distribution, and describe the functions of the main travel trade intermediaries. © 2013 Tourism Australia Copyright Learning Objective 1: The Tourism Distribution System Describe the tourism distribution system using a diagram to illustrate the relationship of the various tourism organizations involved. © 2013 Tourism Australia CopyrightRobert C Mill and Alastair M Morrison © 2013 2
  3. 3. The Tourism System 6th edition Chapter 9Kendall Hunt Publishing Company The Distribution Mix in Tourism Tourism Distribution is Unique  There is no physical distribution system in tourism.  Tourism services are perishable.  Travel trade intermediaries play specialized roles.  Packaging of complementary tourism services is very important. © 2013 Tourism Australia Copyright Distribution’s Role in the Marketing Mix  The distribution mix = “place” in the traditional 4 Ps of marketing.  Distribution mix affects other marketing mix (8 P) elements.  DMOs and tourism companies also market to travel trade intermediaries as well as to consumers. © 2013 Tourism Australia CopyrightRobert C Mill and Alastair M Morrison © 2013 3
  4. 4. The Tourism System 6th edition Chapter 9Kendall Hunt Publishing Company The Distribution Mix in Tourism Learning Objective 2: Direct and Indirect Distribution Define direct and indirect distribution, and explain the difference between these two concepts. © 2013 Tourism Australia Copyright The Tourism Distribution System  Individual and group customers  Direct and indirect distribution  Travel trade intermediaries  Carriers, suppliers, and destination marketing organizations (DMOs) © 2013 Tourism Australia CopyrightRobert C Mill and Alastair M Morrison © 2013 4
  5. 5. The Tourism System 6th edition Chapter 9Kendall Hunt Publishing Company The Distribution Mix in Tourism Direct and Indirect Distribution  Direct distribution occurs when a carrier, supplier, or DMO sells directly to the traveler.  Indirect distribution is when the sale is made through one or more travel trade intermediaries.  The difference between the two is the use or non- use of travel trade intermediaries. © 2013 Tourism Australia Copyright Individual and Group Customers Travel Trade Intermediaries Direct Distribution Retail Travel Agencies Corporate Travel Convention-Meeting Departments Planners Tour Wholesalers Incentive Travel and Operators Indirect Distribution Planners Carriers, Suppliers, and DMOs Lodging Restaurant/Foodservice Airline/Rail/Bus Cruise Lines Attractions Gaming Facilities Destination Marketing Organizations © 2013 Tourism Australia CopyrightRobert C Mill and Alastair M Morrison © 2013 5
  6. 6. The Tourism System 6th edition Chapter 9Kendall Hunt Publishing Company The Distribution Mix in Tourism Learning Objective 3: Major Travel Trade Intermediaries Identify and describe the major types of travel intermediaries. © 2013 Tourism Australia Copyright Travel Trade Intermediaries Tour Wholesalers and Operators  Companies whose main business is the planning, packaging, selling, marketing and promotion of multiple vacation elements. The wholesaling function means assembling or planning and packaging the tour. The operating part of the tour means managing the tour by providing tour escorts, sightseeing services, or transportation. Many tour operators perform both the wholesaling and operating functions. © 2013 Tourism Australia CopyrightRobert C Mill and Alastair M Morrison © 2013 6
  7. 7. The Tourism System 6th edition Chapter 9Kendall Hunt Publishing Company The Distribution Mix in Tourism Travel Trade Intermediaries Retail Travel Agencies  Travel agencies handle the sale and reservations of tours, vacation packages, airline tickets, hotel rooms, car rentals, cruises, travel insurance, and other related services. They are professionals who counsel clients on destinations, transportation and all other aspects of travel. © 2013 Tourism Australia Copyright Travel Trade Intermediaries Corporate Travel Departments “Travel management is a specialized business function that balances employee needs with corporate goals, financial and otherwise. Travel management ensures cost tracking and control, facilitates adherence to corporate travel policies, realizes savings through negotiated discounts, and serves as a valuable information center for employees and managers in times when travel is not as smooth and carefree as it used to be.” (GBTA, 2013). © 2013 Tourism Australia CopyrightRobert C Mill and Alastair M Morrison © 2013 7
  8. 8. The Tourism System 6th edition Chapter 9Kendall Hunt Publishing Company The Distribution Mix in Tourism Travel Trade Intermediaries Incentive Travel Planners Specialized tour wholesalers who primarily serve corporate clients. The trips they arrange are given to certain of their client’s employees or dealers as a reward for outstanding sales or work performance. © 2013 Tourism Australia Copyright Travel Trade Intermediaries Convention-Meeting Planners These are employees of corporations, associations, government agencies, and other nonprofit groups who plan and coordinate meetings, conventions, conferences, exhibitions or trade shows. © 2013 Tourism Australia CopyrightRobert C Mill and Alastair M Morrison © 2013 8
  9. 9. The Tourism System 6th edition Chapter 9Kendall Hunt Publishing Company The Distribution Mix in Tourism Travel Trade Intermediaries Electronic Distribution Channels  Internet and Web  Online travel agencies/companies (OTAs/OTCs):  http://www.expedia.com/  http://www.travelocity.com/  Global distribution systems (GDSs):  http://www.amadeus.com/  http://www.travelport.com/  http://www.sabre.com/ © 2013 Tourism Australia Copyright Learning Objective 4: Functions and Economics of Tour Wholesaling Explain the functions of tour wholesalers and operators, and the economics of the tour business. © 2013 Tourism Australia CopyrightRobert C Mill and Alastair M Morrison © 2013 9
  10. 10. The Tourism System 6th edition Chapter 9Kendall Hunt Publishing Company The Distribution Mix in Tourism Functions of Tour Wholesalers and Operators 1. Tour planning and preparation: Researching the market and product, and preparing the tour program. 2. Tour marketing: Internet marketing brochure distribution, advertising, personal selling, and other sales promotions. © 2013 Tourism Australia Copyright Functions of Tour Wholesalers and Operators 3. Tour administration: Conducting all the necessary administrative tasks associated with the tour program. 4. Tour evaluation: Assessing the success of the tour. © 2013 Tourism Australia CopyrightRobert C Mill and Alastair M Morrison © 2013 10
  11. 11. The Tourism System 6th edition Chapter 9Kendall Hunt Publishing Company The Distribution Mix in Tourism Economics of The Tour Business  Ease of entry: Low capital investment needed, except where licensing is required.  Cash flow: Cash flow management is critical, as cash flows are quite volatile.  Return on sales: The return on sales tends to be low.  Return on equity: The return on equity can be high. © 2013 Tourism Australia Copyright Learning Objective 5: Functions of Retail Travel Agencies Explain the functions of retail travel agencies. © 2013 Tourism Australia CopyrightRobert C Mill and Alastair M Morrison © 2013 11
  12. 12. The Tourism System 6th edition Chapter 9Kendall Hunt Publishing Company The Distribution Mix in Tourism Functions of Retail Travel Agencies  Distribution and sales network  Reservations and ticketing  Information provision and travel counseling  Design of individualized tour itineraries © 2013 Tourism Australia Copyright Learning Objective 6: Reasons for and Functions of Corporate Travel Departments Describe the reasons for creating corporate travel departments and the functions of these departments. © 2013 Tourism Australia CopyrightRobert C Mill and Alastair M Morrison © 2013 12
  13. 13. The Tourism System 6th edition Chapter 9Kendall Hunt Publishing Company The Distribution Mix in Tourism Reasons for Creating Corporate Travel Departments  To establish company-wide travel policies  To negotiate the best prices on travel  To save the corporation money in its travel costs © 2013 Tourism Australia Copyright Functions of Corporate Travel Departments  Negotiations with carriers and suppliers  Development of corporate travel policy  Monitoring of travel expenses and travel policy compliance  Reservations and ticketing  Meeting and incentive planning  Monitoring travel agency performance © 2013 Tourism Australia CopyrightRobert C Mill and Alastair M Morrison © 2013 13
  14. 14. The Tourism System 6th edition Chapter 9Kendall Hunt Publishing Company The Distribution Mix in Tourism Learning Objective 7: Functions of Incentive Travel and Convention-Meeting Planners Explain the functions of incentive travel and convention-meeting planners. © 2013 Tourism Australia Copyright Functions of Incentive Travel Planners  Design and implementation of motivational programs  Design of tour program  Tour operation  Reservations and ticketing  Program evaluation © 2013 Tourism Australia CopyrightRobert C Mill and Alastair M Morrison © 2013 14
  15. 15. The Tourism System 6th edition Chapter 9Kendall Hunt Publishing Company The Distribution Mix in Tourism Functions of Convention-Meeting Planners  Convention and meeting planning  On-site coordination  Convention-meeting evaluation © 2013 Tourism Australia Copyright THE TOURISM SYSTEM Chapter 9 Chapter SummaryHighlights Chapter Summary Highlights  Tourism distribution is unique.  The distributions mix is a combination of direct and indirect distribution. Indirect is distribution through travel trade intermediaries.  There are unique intermediaries in tourism: 1) tour wholesalers and operators; 2) retail travel agencies; 3) corporate travel departments; 4) incentive travel planners; 5) convention-meeting planners; and 6) electronic distribution channels. © 2013 Tourism Australia CopyrightRobert C Mill and Alastair M Morrison © 2013 15

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