Chapter 12

Supply chain: Upstream (Ex. Raw materials, info to create a product

service)Downstream (Ex. Distribution channel –

wholesalers/retailers) Set of individual organizations involved

in the process of making a product or service available to the user

Marketing = Moves goods from producers to consumers

Hospitality/Tourism = Moves customers to product

They are one-stop shops

Selling through wholesalers and retailers can be more efficient and cost effective

Eliminates unnecessary work

Simplifies the purchasing process for the consumers

These help complete transactionsInformation PromotionContact (access) MatchingNegotiating

These help fill the ordersFinancingRisk takingPhysical distribution

Examples of Channels:

•Channel 1- Bowen’s Island •Channel 2- State Street Popcorn http://www.statestreetsnacks.com/

•Channel 3- Disney experience – wholesalers – local travel agent – you http://www.libertytravel.com/ https://travel.americanexpress.com/travel/home http://www.friendlyplanet.com/about/

Travel Agents Tour Wholesalers

Concierges Specialists: Brokers & Junket Reps

Online Travel Agency (OTA) Hotel Representatives

Consortia & Reservations Systems

Direct Booking National, State, and Local Tour Agencies

Marketing Intermediaries

History: http://www.youtube.com/watch?v=pgnHOzsWIyo

Travel Agents More direct sales, less travel agents Commissions/Fees Corporate travelers is the main business

Tour Wholesalers Leisure market, especially for int’l destinations Must sell at least 85% of packages to break even

Hotel Representatives Sell hotel rooms/services in a given market area Useful when you have a hard time reaching the

market

Tour broker: motor coach tours (events, museums, historic sites, etc.) http://www.citysightsny.com/category.php?id=8

Motivational houses specializes in handling incentive travel

http://www.inspira-travel.cz/motivational-tours.php

Junket reps – intermediaries for premium players for casinos

http://www.mesjunkets.com/upcoming-junkets/atlantic-city-junkets/

National, State and Local Tourist Agencies Promote areas Ex. CVBs http://www.columbiacvb.com/

http://www.visitorlando.com/

Consortia and Reservation Systems Reservation systems: central reservations systems

(CRS) that represent several hotels or chains. Allow guests to call a local number to contact Ex. Lowes Representation International

Consortium: loosely aligned group of independently owned and managed properties Ex. Leading Hotels of the World http://www.lhw.com/

Golden Tulip http://www.goldentulip.com/EN/default.aspx

Concierge Concierges, bell staff, front-desk employees Sell local hospitality products and travel

Directed Booking Professional reservation staff (CRO), not front-desk Hotel website

Online Travel Agency (OTA) Nonopaque: customer pay agencies, not hotels

(hotels.com, travelocity, expedia) Opaque: unaware of hotel brand until purchased,

nonrefundable transaction (hotwire, priceline) Global Distribution System (GDS): serve as product

catalog for travel agents, allowing connection between travel agents and other distributors (airlines, hotels, rental cars, etc.) Ex. Amadeus, Sabre, Galileo, Worldspan http://www.amadeus.com/web/amadeus/en_US-US/Amadeus-Home/1259071353509-Page-A

MAD_HomePpal https://www.amadeus.net/home/

Connecting OTAs http://www.youtube.com/watch?v=6EC1lwfJvvU Sabre Channel Connect http://www.youtube.com/watch?v=jyKbmE8DW9Q More Online distribution channels http://www.youtube.com/watch?v=xdXCFPS9RGw

Integrated Management Systems (Integrated Management Systems (borrowed from presentation borrowed from presentation by Jim Kelly of Synxisby Jim Kelly of Synxis) )

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Franchisee is granted the right to engage in offering, selling or distributing foods or services under a marketing format which is designed by the franchisor, can use the trademark, name, and advertising

Franchisor Provides:A. Technical knowledgeB. Managerial techniquesC. Marketing supportD. Financial supportE. Safeguards (support services such as legal,

insurance advice etc.)F. AuditingG. Reservation systemH. Volume purchasing I. Instant recognition etc.Click to view

Advantages: Receives a percentage of gross sales Expands brand Support for national advertising campaign Negotiating support for national contracts with

suppliers Disadvantages:

Distribution system Consistency Changing operation Advertising expenditures

Advantages: Brand name Marketing supports Contracts Plans and systems Reservation systems

Disadvantages: Value of brand name determined by franchiser Introduction of new products determined by

franchiser Your reliability tied to the rest of the system

Alliances are contractual agreements developed to allow two organizations to benefit from each other’s strengths

Horizontal marketing systems are two or more companies at one level that join to follow a new marketing opportunity Ex. Zoo tickets sold at a discount at the hotel desk

Multichannel marketing occurs when a single firm sets up two or more marketing channels to reach one or more customer segments Franchised Burger King is competing with a BK

owned Burger King

Selecting Customer Needs Attracting Members Evaluating Alternatives

Feasibility Control Criteria

Responsibilities Business Location

Understand Market Strategy Regional Analysis Select Area/Demographics Choose Individual Sites http://www.darden.com/pdf/about/Red_Lobster_eBrochure_2010.pdf http://www.businessweek.com/technology/content/jul2005/tc2005076_7033.htm

Be selective with intermediaries Make sure you can support the

intermediaries Ensure intermediaries make sense Cost Benefit Analysis Establish great relationships Be creative Grow!