-UNNIKRISHNAN PM

- Marketing means achieving the firm's goals by
identifying the needs and desires of consumers,
and then satisfying them better than competitors.
– Tourism marketing is the application of marketing
concepts in the travel and tourism industry.
– Tourism marketing could be complex due to the
product being an amalgam of many different
industries such as accommodation and
transportation.
– The markets also vary widely, preferences could be
difficult

The organized, combined efforts of the
national tourist bodies and/or the businesses
in the tourism sector of an international,
national or local area to achieve growth in
tourism by maximizing the satisfaction of
tourists. In doing so, the tourist bodies and
businesses expect to receive profits.

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.

 Distribution Channel Functions
Members of the marketing channel perform
many keysfunction:
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

 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

 Distribution Channel
An operating structure, system, or linkage of
various combinations of organisations through
which a producer of travel products describes,
sells, or confirms travel arrangements to the
buyer
Products get to consumer through a
distribution channel
 Tourism Services
Services are actions; goods are material objects
Services are often accompanied by facilitating
goods which support the service In tourism
there is no physical good that can be held in
inventory and can be transferred from one
middleman to the next

The Chain of Distribution
PRODUCER
↓
INTERMEDDIARIES
↓
RETAILERS
↓
CONSUMERS

 Why Use Intermediaries?
Intermediaries make information and services
widely available cost-effectively
 They perform a variety of value-added
functions e.g, types of services, potential
customers, packages
 Intermediaries are frequently paid on
commission
 May also charge the customer a modest fee
 Exist where they perform a necessary role
more cost-effectively than the supplier could
perform the same role

One-Level (Direct) Distribution Channels
 Simplest form of distribution, no intermediary
between supplier and customer
 Most tourism suppliers utilize one-level
distribution channels
 Purchase directly from the supplier
 World Wide Web is increasing the direct
availability of information and purchase
 Airlines encouraging the use of the Web and
ticketless travel
Advantages
Simplicity,Additional Sales Opportunity,
Flexibility, Greater Profitability to Suppliers,
Personal Control over the Sale

Two-Level Distribution Channels
 Intermediary between tourism supplier and
tourist
 Most common form of tourism supplier
 Travel agencies are the department stores of
the travel industry
 Improving service delivery through
cooperative systems
• Global distribution system (GDS)
• Computer reservation system (CRS)
 Two important cooperative systems for airline
ticketing
 Airlines Reporting Corporation (ARC)
 International Airline Travel Agency Network
(IATAN

 Advantages
Professional Assistance
Multiple Options
Free or Low-Cost Assistance
Cumulative Group Power
Single-Charge Billing
Cost Less

Three-Level Distribution Channels
Add another level of intermediary such as tour
operators to low-level channel
 Some travel agencies have entered tour packaging
business Tours
 A package of two or more tourism services priced
together Four primary forms of tours
Independent Foreign/domestic independent
Hosted Escorted
 Tour Operators
 Purchase tourism services in bulk and then mark
up the price and resell in packaged form
 Plan, prepare, market and often operate vacation
tours
 Also termed tour packager or tour wholesaler
 Many financial risks in the tour packaging business
 Receptive service operator is local company that
handles group’s needs while in its location

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

Indirect Distribution System
Use one or more travel intermediaries
 Benefits of customers
 Professional consultation
 Greater variety
 Lower price
 Single payment

Travel Intermediaries
Tour Operator
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)

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
 Idependent operators
 Airline operators
 Wholesale travel agent
 Specialty operators
 Travel clubs

 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

 Travel Intermediaries
 Regulation and Intermediaries
Travel Agents
• Some states require a license
• Where a license is not is not legally obliged,
certification or accreditationconsists of approval
from industry conferences
• Minimum bond and minimum cash reserve
• Minimum experience
• Travel agents have a legal obligation to perform in
a professional manner
Tour Operator
• A local business license and compliance with
governmental and airline regulations are required
• Some monetary constraints

The Impact of Technology on Travel Distribution
Systems
The Link between Technology and Tourism
 Changes in market and mentality
 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
 Developing of mass tourism
 Need for technology
The use of technology to gather, manage, distribute,
and communicate information.

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

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

• Evolution Of The Concept Of Tourism Marketing Can Be
Associated With The Various Business And Social Changes,
Which Have Occurred Since The Introduction Of
Industrialization
• Like most industries, being a part of the tourism industry
requires you to have industry specific knowledge to create and
run a successful business. Understanding the distribution
systems, recommended rates of commission, and the roles of
various booking agents is essential for a successful business.
This section has been designed to aid you in your understanding
of the tourism industry.

THANK YOU.......