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Distrubution chennals
- 1. Presentation on: Supply Chain Management Topic: Distribution Channels Presented by: Abdinasir Ahmed Ali Program: Post graduated Diploma in Supply chain management Presented to Professor, Mohammed Shamsuddoha 11th November, 2016
- 2. 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
- 3. Place = Distribution The 4Ps Product, Price, Place, Promotion What the “P” of Price is to Revenue Management, the “P” of Place is to Distribution
- 4. 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
- 5. Distribution Today “distribution” in the hospitality industry generally references transient sales today Revenue management and distribution merging together Internet marketing includes distribution issues
- 6. 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
- 7. 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
- 8. 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?
- 9. 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
- 10. 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.
- 11. 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
- 12. 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
- 13. 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)
- 14. 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
- 15. 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