Presentation on:Supply Chain Management
Topic:Distribution Channels
Presented by: Abdinasir Ahmed Ali
Program: Post graduated Diploma in Supply chain management
Presented toProfessor,
Mohammed Shamsuddoha
11th November, 2016
Distribution Channels A distribution channel - set of
independent organizations involved in the process of making a product or service available to the consumer or business user
Used to move the customer towards the product or the product to the customer
Organic development of an industry
Place = Distribution
The 4Ps Product, Price, Place, Promotion
What the “P” of Price is to Revenue Management, the “P” of Place is to Distribution
Distribution also describes Locations for hotel brand distribution
Franchising Ownership Management contracts
The sales staff and system Group sales or volume accounts Reservations and transient sales National sales offices Representation firms, consortia
DistributionToday “distribution” in the hospitality industry
generally references transient sales today
Revenue management and distribution merging together
Internet marketing includes distribution issues
Distribution Channel Functions
Information: consumer behavior “search stage” Promotion: messaging Negotiation: price and other terms
(how is this done online? Physical distribution: think e-tickets? Prospecting: finding, communicating, and
tracking prospective buyers
Digitalization and Connectivity
Digitalization - converting text, data, sound, and image into a stream of bits that can be dispatched at high speeds from one platform to another
Connectivity - building networks connecting people and companies; social and mobile convergence
Direct versus Indirect Channels Direct Channels
Employed sales staff National sales staff Brand.com Voice/CRS/Mobile
Indirect – Intermediaries Why use them? Why so many of them?
Push vs. Pull strategies
Pushing the product “down” through the distribution channel TO the customer Incentives to travel agents and intermediaries
Pulling the customer “up” through the distribution to the channel Traditional media/private sales/CRM
Why Use Intermediaries? History of travel
Selling through wholesalers and retailers usually is much more efficient and cost effective than direct sales
Fragmentation of the travel purchase and travel inventory, transportation (idea of “lift”), hotels, attractions, meeting facilities, restaurants, and so on.
E-Commerce & E-Marketing E-commerce involves buying and selling
processes supported by electronic means, primarily the Internet
E-marketing is company efforts to communicate about, promote, and sell products and other services over the Intranet; also web or Internet Marketing
Not easy to separate but different issues
E-Commerce Domains B2C (business to consumer)
Branded websites B2B (business to business)
Passkey C2B (consumer to business)
User groups C2C (consumer to consumer)
Blogs; review sites are blends of above
Internet Intermediaries
History of the internet as a discount channel Price and convenience key drivers still Dominance about inventory allocation Consistency of all 4Ps by channel
How Product is described Pricing parity Channel profitability Communication needs to vary by segment (channel)
Major Issues/Challenges Costs have risen as has competition Global differences in systems
Technology also flattening this System hard to change and complex to manage
Historical controls of GDS, OTA Diversity of travel “parts” makes all of the
distribution points part of the experience and if an intermediary fails, so does the experience
Evaluation of Channels
Control and cost of each channel Tracking of statistics to better negotiate
contracts in the future Understand when and why to use a channel Good channel management ensures
customer satisfaction AND revenue optimization AND profit maximization
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