پنجشنبه ۲۲ شهریور ۰۳ | ۲۱:۱۷ ۹ بازديد
4.2.1 Benefits of Distribution Channels or Intermediaries:
Travel intermediaries bestow a number of benefits on producers, consumers and
the destination. These can be explained as follows:
• Producers are able to sell in bulk and so transfer risk to the tour operator,
although wholesalers do attempt to cover themselves by including release
clauses in agreements. These may vary from four or more weeks to seven
days.
• Suppliers can reduce promotion costs by focusing on the travel trade rather
than on consumer promotion, which is more expensive.
• By being able to purchase an inclusive tour the traveller can avoid search
and transaction costs both in time and money.
• Consumers gain from the specialist knowledge of the tour operator and the
fact that the uncertainties of the travel are minimized. For example, cruising
and coach tours are attractive to senior citizens because the holiday starts
the movement they board the ship or coach.
• The most significant gain for tourists is in lower prices, notably in the case
of resorts dealing with large numbers of visitors. In such cases, wholesalers
are able through their buying power to negotiate discounts of up to 60 per
cent off the normal tarrif.
• Destinations, especially in developing countries where budgets are limited,
may benefit considerably from internationally marketing network of tour
operators.
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4.2.2 Structure of Distribution Channels:
Independent travellers put their own itinerary together. This they can do by
purchasing the key components of transport directly from the suppliers, or from
their own outlets or via the retail travel agent. It is common in domestic tourism for
consumers to purchase their trip requirements directly, because they usually have
good product knowledge and ready access to a telephone to make reservations.
It is difficult for airlines, bus and coach operators and shipping companies to have
their own outlets in large cities, from which the public may purchase travel product
directly. Airlines are particularly keen to secure their presence in the market by
locating offices in capital cities. This serves both the trade and the public, where
there is not only large number of business travellers but also many overseas
holidaymakers traveling independently.
4.2.3 Distribution Channel Function:
Distribution channel moves goods from producers to consumers. It overcomes the
major time, place and possession gaps that separate goods from those who would
use them. Members of the marketing channel perform following key functions:
1. Information: Gathering and distributing marketing research and in-
telligence information about the marketing environment
2. Promotion: Developing and spreading persuasive communications about
an offer
3. Contact: Finding and communicating with prospective buyers
4. Matching: Shaping and fitting the offer to the buyer's needs, including
such activities as manufacturing, grading, assembling, and packaging
5. Negotiation: Agreeing on price and other terms of the offer so that
ownership or possession can be transferred
6. Physical distribution: Transporting and storing goods
7. Financing: Acquiring and using funds to cover the cost of channel work
8. Risk Taking: Assuming financial risks such as the inability to sell
inventory at full margin
The first five functions help to complete transactions, the last three to fulfil the
completed transactions.
4.2.4 Number of Channel Levels:
Distribution channels can be described as the number of channel levels in each
layer that performs some work in bringing the product and its ownership closer to
the final buyer. Because the producer and the final consumer both perform some
work, they are part of every channel. We use the number of intermediary levels to
show the length of a channel.
Channel one is called a direct marketing channel, which has no intermediary level.
It consists of a manufacturer selling directly to consumers. For example in the
hospitality sector a restaurateur may buy produce directly from the grower or an
airline selling airline ticket directly to passengers.
Channel two contains one level. In consumer markets, this level is typically a
retailer. Many of the agricultural products purchased by the hospitality industry
come from cooperatives. In the United States, Sunkist, Walnuts, and Land ‘0'
Lakes butter are all producer co-operatives. New Zealand Milk Products Company
is also a cooperative and sells butter and cheese throughout Southeast Asia and
Latin America. In transport sector, an airline many sale tickets through IATA
agents to customers.
Channel 3 contains two levels. In consumer markets, these are typically a
wholesaler and a retailer. This type of channel is used by manufacturers. Airlines
many sell tickets through GSAs and IATA agents.
Channel 4 contains three levels. Airline selling tickets through GSAs, IATA
agents and through internet. The producers sell to smaller firms that are not served
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by larger wholesalers. From the producer's point of view, a greater number of
intermediaries in the channel means less control and more complexity.
All the institutions in the channel are connected by several types of flows. These
include the physical flow of products, the flow of ownership, payment flow,
information flow, and promotion flow. These flows can make channels with only
one or a few channels very complex.
Many specialized channels are available to hospitality and travel organizations.
The following components of hospitality or travel distribution system: travel
agents; tour wholesalers; specialists; internet and on-line reservations systems;
global distribution systems are discussed below:
Travel Agents: Travel agencies are on of the most important organistions in travel
industry, playing a significant and crucial role in entire process of developing and
promoting travel sales. Travel agencies as IATA approved agencies have a key role
in the process of distribution of airline products. Apart from IATA, TAAI is
another association of travel agencies in India, having dominant role in tourism
distribution.
Paradoxically, the basic functions of travel agents have not changed significantly
over the years. However, there have been additions in the functions performed by
travel agencies. Apart from the basic function of distribution, travel agent packages
and processes all components of tourism product offered to the tourists. In this
way, it converts a country’s attractions, accessibilities, amenities into salable
commodities. Thus the place of the travel agency is very prominent among the
other types of intermediaries involved in tourism products and services. It is clear
that travel vendors can sell products/services directly to the tourists or through one
or more intermediaries. Whatever system they adopt, will facilitate travellers and
create new market opportunities.
Tour Operators: Today, travellers are becoming more and more
sophisticated, experienced and are willing to pay much higher for the
services rendered by tour operators; as they realize that in the long run,
pre-planned and pre-arranged tours will not only save one third of their
time en route, but will also give them more value for their money. Infact,
tour operators have the responsibility of putting tour ingredients together
and finally making the tour possible through a series of operations.
At its most fundamental, tour operating is a process of combining aircraft
seats and beds in hotels (or other form of accommodation) in a manner
which will make purchase price more attractive to potential holiday
makers. As noted earlier, tour wholesalers achieve this through bulk buying
which generates economies of scale that can be passed on to customers.
The most essential link in this process is the tour operator’s brochure,
which introduces the holiday product to the customer. The brochure must
include the following:
Illustrations, which provide a visual description of the destination and
the holiday.
A written description of the package to help the customer match the
type of product he is looking for.
Departure plans, which give the specifications of the holiday for.
Price different times of a season, duration of a stay and variety of
departure points.
Large tour operators normally sell a wide portfolio of tours and therefore
have a range of brochures. For instance, there will be separate brochures for
summer holidays, winter holidays, ski holidays, long-haul travels, short
breaks. Popular destinations may have tour operator’s brochures dealing
solely with holidays to that country or region. Research has shown that
places to visit are often the first holiday decision made by some travellers.
The brochures are designed to lure customers to buy and are often only
information they have concerning the destination until they arrive there.
However, it cannot be a comprehensive travel guide. The number of pages
is limited by considerations of cost and other reasons, and operators try to
put as much detail about the package as they can in the space available.
Clearly, this must be consistent with the brand image they are trying to
convey, as they will each be competing for the customer’s attention.
Specialists: Tour Brokers, Motivational Houses: Tour brokers sell motor
coach tours, which are attractive to a variety of markets. Tours through
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Rajasthan to view the culture and heritage, trips to National Parks and -
sporting events, tours around Buddhist circuit, and regularly scheduled tours
of the Golden triangle area are examples of popular trips in India. Some
motor coach tours are seasonal, some are based on a single event and others
are year round. For hotels on their routes, tours can provide an important
source of income.
Motor coach tours are very important to museums and historical places, such
as tour to Rajasthan forts, palaces. Historic restorations sites, heritage hotels,
and destination cities usually participate in a coach tour offered in their
markets. Sales persons representing them scrambles to make appointments
with bus tour companies that serve these areas.
Business houses provide incentive travels to employees as a reward for their
achievements. Companies often use incentive travel as a price for employees
who achieve sales goals or for the sales team achieving the highest sales.
The incentive trip is usually to resort areas in first-class or luxury properties.
For resorts or up-market destination cities Business houses represent an
effective distribution channel. Ways of reaching tour brokers and Business
houses include trade magazines and trade associations, such as TAAI, IATO
and ADTOI, etc.
Internet and On-Line Softwares as Intermediaries in the Tourism Distribution
Channel: The Internet offers great opportunities for the tourism industry, but it has
created some discord among the members of the tourism distribution channel. The
threat faced Internet selling has affected influenced both online and traditional
travel agents, compelling them to increase the functionality of their websites and
implementing e-commerce.
Crs and Gds as Intermeditory: The travel services industry has traditionally
used forms of these vehicles known as Computer Reservation Systems (CRS)
which give access to the Global Distribution Network (GDS). It has been the
practice to receive reservation information, fare quotes and other 'just in time'
information via these networks. Computer Reservation Systems (CRS) are heavily
used by the airline industry, which is now dependent on technology for seat
inventory and fare distribution. But travel agents are the largest users of CRS
services. Internet bookings have been increasing. However, they still account for a
very small percentage of the total distribution mix. Due to the significant size of
the distribution of tickets through CRS and the travel industry supply chain, there
is concern over the dramatic increase in costs of CRS fees to the air carriers. This
significant expense has prompted many air carriers to seek alternative e-
commerce solutions.
The CRS permit on-line booking engines to front end onto their system, allowing
both the travel supplier and consumer to access the airline inventory. The airlines
pay CRS fees for this service. Using the internet and 'direct link' technology as a
front end to the airline's own reservations system allows the airline to sell direct
without paying CRS fees. Potential lost revenues are powerful motivators for the
CRS to retrench themselves as the dominant player in the traditional delivery
model of airline tickets while the air carriers are motivated to develop their own
strategic plans to manage seat inventory and control CRS costs. This trend will
continue as corporations such as the CRS and air carriers examine ways to reduce
costs and increase efficiencies through Enterprise Resource Planning (ERP)
systems that provide information on all aspects of their operations. The retail travel
services industry is caught in the middle of this confrontation.
There are various GDS’s available in the market but the four most commonly used
Global Distribution Systems (GDS) are - Amadeus, Galileo, Sabre and Worldspan
and have been referred to as the backbone of the modern travel distribution system
(Bear Stearns, 2000) They have processed more than 1 billion air bookings each,
and another 250 million for hotels, cruises and other non-air content, generating
over US$6 billion in revenues. Sabre and Amadeus own the largest civilian data-
processing centres in the US and Europe respectively. The volume of global
transactions through the GDS has risen 4% year-on-year to 343 million.
Worldwide, the GDS reaches some 230,000 points of sale.
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Figure 4.3
The CRS Vendors' Relationship to the Retail Travel Agent and the Airline
Airlines are also utilizing high technology such as proprietary platforms and
agnostic application service provider (ASP) technology, to redefine their strategic
position in the industry. These platforms can web-enable thousands of non-GDS
vendors at lower costs than CRS/GDS vendors, provide direct connectivity with a
24 x 7 booking engine and support contract terms and negotiated rate programs.
The impact of this technology is that it levels the playing field and provides equal
online distribution opportunities to mid-size and smaller retail travel services
industry and their vendors. Additionally, it offers sellers multiple trading formats
not available on the GDS such as auctions, last-minute deals, and reverse-bidding
auctions. It can be customized to facilitate improved marketing strategies,
performance and revenue reports. Importantly, it can empower the travel agent
community with the tools to compete.
4.3 Tourist Transport Operations: An Introduction:
The essential characteristic of the production function is to bring together human
resources, physical resources, financial resources technology to produce goods and
services in order to satisfy the customer’s needs. Therefore, operations refer to the
way in which organization transforms its input into output, i.e., transforming
resources in to goods or services.
In simple words, all productions or operations are purposeful activities of an
organization. Each operation adds value to some entity through a variety of means.
This may include a change in the form or state of inputs or value additions through
locations or inspections. For example a taxi available at the exit point of an airport
adds value to the service in comparison to a person travelling independently.
4.3.1 Operational Requirements:
There are various operational requirements for the smooth conduct of transport
business. Such requirements depend upon a large number of factors, such as, type
of business, location, type of product, legal framework, production process,
existing market conditions, etc. But, in common, the various operational
requirements can be summarized under the following heads:
i) Vehicles
ii) Well-equipped office
iii) Trained manpower
iv) Parking garage
v) Maintenance facilities
vi) Communication facilities
vii) Selling network
viii) Capital requirements
Vehicles: Vehicles are a prerequisite for movement of tourists from one pla
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