2. Tour Operations Management Distribution Strategies for Tour Ops

4. Criteria for Channel Choice Coverage of target market Consumer preference Comparative Cost Control of the channel

5. Coverage Over 8,000 travel agency shops in UK offering local purchase comparison local reputation/brand image promotion and selling ‘late-booking centre’ (Welburn)

6. Consumer Preference Information stage of the PIECE process Where do people look for this type of product? 80% of package holidays in UK are bought from retail travel agents (Ujma) Travel agency brands are better known and command higher brand loyalty than T. Os (Salt) but does your target segment use Travel Agencies?

7. Comparative Costs Morgan (1996) p191 Direct selling consumer advertising consumer promotions staff for customer service lines postage of brochures wastage of brochures in direct mailing Using agents trade advertising trade promotions sales force and agency sales lines computer links to CRS wastage of brochures not racked by Agents educational/incentive trips commission See Broadbent (1984) Tjaereborg case study

8. Channel control theory Leadership = power to influence the way the end product is marketed This can stem from economic power -> reward for co-operation brand ownership access to/influence over markets (Walters and Bergeil 1982) Where do these sources of power lie in the TO/TA channel? Do they change over time?

9. Dependency Ujma (2002) in Buhalis and Laws Sales and profit –dependency on one firm for most of your business Role performance –co-operation, communication, service Assets and investment –required to switch to another supplier (eg CRS) Trust –leading to favourable credit terms

10. Distribution strategy options Selection of agencies Exclusive Selective Intensive (Kotler) See the Kuoni example in Morgan (1996) Direct sell versus retailer channels New media channels

11. Channel control in practice Horizontal and vertical integration strategies of the T.O.s leads to a consolidation of Travel Agencies (Ujma p49) These ‘multiples’ are characterised by –strong retail brands commanding customer loyalty –uniform store design reflecting corporate identity –central purchasing policy –directional selling in favour of their group’s products ( Hudson et al in Buhalis& Laws) –limited rack space for other products This creates ‘retailer power’ to dictate terms to independent tour operators

12. What T.A.s need from T.Os Morgan (1996) p 193 Maximum profits per shelf space from –product brands with high consumer demand available in all branches a year-round range –additional commission for sales targets reached –support for joint promotions

13. Good service performance –on-line bookings, ticketing and accounts –regular brochure supplies –efficient help-lines for queries and problems Smaller T.Os will find it difficult to meet these criteria The multiples become holiday shops with a limited mainstream range

14. Distribution strategies for small specialist tour operators Independent travel agencies Direct response advertising –Database marketing Relationship marketing based on retention and referrals Co-operative marketing (AITO)

15. Changing channels? See Cooper and Lewis in Buhalis and Laws New tourists (Poon 1993) –opportunity or threat for tour operators? New carriers –budget airlines and hotels as an alternative to the traditional package New media –disintermediation? –new virtual travel agents? –or the same vertically integrated operators offering mass customisation

16. Reading Wen Pan and Laws in Buhalis and Laws (2000) What are the consumer preferences of the Chinese tourists when booking a foreign trip? What are the distribution channels (business networks) in marketing Australian holidays to China? How does culture influence the way these channels operate?