Distribution Channel Essay

384 WordsOct 8, 20112 Pages
TYPES OF DISTRIBUTION CHANNEL 1. Consensus channels  In a consensus channel, no part of the channel exercises control over the system. The several participants in the system work together for their mutual interest. 2. Vertically- Integrated channels  The functions of the productions and retail distribution are owned and controlled by single company.  A tour operator may exert control over the entire channel activity through retail outlet ownership and organization of the channel. 3. Vertically-coordinated channels  The tour operator’s control over the channel comes from contractual or financial commitments with retail agents.  Franchising is an example of such a system. RELATIONSHIP OF DISTRIBUTION TO MARKETING Distribution system  Part of the marketing mix. Once marketing objectives and appropriate mix is determined. The chosen marketing mix will reach the market segments and fulfill its objectives  System of distribution selected will affect parts of the marketing mix.  The promotion strategy may also change. Since the retail travel agent does not carry any inventory. There is a little or no incentive for the agent to promote a specific destination.  For the supplier, the promotional burden is shared. Joint or Cooperative advertising may be proper.  The pricing policy of the supplier will also change depending on the decision to distribute directly or indirectly.  When a tour wholesaler buys in bulk such as 100 rooms per night for three months, a lower rate room will be charged. STRATEGIES There are three strategies namely: Intensive distribution  Involves maximizing the exposure of the travel product distributing through all available intermediaries. Exclusive Distribution  Occurs when a supplier or wholesaler limits the channels and outlets for the products. Selective  A strategy which is between intensive and exclusive
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