Intermediaries
12 important questions on Intermediaries
What are the three basic distribution options for a supplier?
- Exclusive: limited number of channels are chosen to distribute the product
- Selective: only the appropriate channels are chosen
What are the three types of channel on the basis of power?
- Vertically integrated: producers and retailers are owned or managed by the same organization
- Vertically coordinated: member are related through a contract or franchise arrangement rather than ownership
What are the roles of intermediaries?
- transferring risk of a supplier to an intermediary
- reduction of marketing costs
- ability to pass on knowledge and price advantage
- acting as a one stop shop for many products for the customer
- acting as a cheaper source of products because they can negotiate and purchase in bulk
- help improve the competitiveness of destinations who leverage from intermediaries extensive marketing network.
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What kind of tour operators are there?
- Outbound
- Inbound
What does the 'marginal cost principle' means?
What implication has yield management?
Due to what change do travel agencies need to reinvent their role in the channel?
What does 'the process of integration' mean?
Technology has a huge impact upon how distribution channels operate. What kind of innovations has it brought?
- It allows the development of online brocures, texts and images
- it allows suppliers to instantly change dates, prices and availability
- it delivers significant cost savings through the electronic processing of bookings
- it gives smaller suppliers a degree of global market
- customer-driven encouragement through blogs and websites
What are the benefits of GDS'?
- Allow suppliers to manage their capacity and yield
- Provide instant interactivity for intermediaries and suppliers
- Can be expanded into other services.
What are the implications for how the tour operation industry operates?
- Effective capacity management and utilization of aircraft to achieve high load factors
- Tour prices are set competitive
- Use of the internet means that the operator can by-pass travel agents
- Operators can boost their profitablity by hedging foreign exchange
What are the threats of large organizations exercising channel power?
- Independent agents can adopt strategies of differentiation
- Dynamic packaging
- Destinations are concerned, because it removes control of markting.
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