Transcript Chapter 18
Chapter Eighteen Hospitality Distribution Systems: Bringing the Product to the Customer Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Distribution Channels and How Distribution Channels Work All channels between the firm and the customer that increase the probability of a purchase Hospitality has reverse channels: we need distribution systems to get customers to come to us Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Distribution Channels and How Distribution Channels Work (cont.) Brands – Managed and marketed by the brand and conform to strict standards – Connected to the Global Distribution Systems (GDS) and the Internet – Attend trade shows and manage sales offices Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Distribution Channels and How Distribution Channels Work (cont.) Representation firms – Companies that market a hotel for a fee – Usually used by independently owned properties – “Soft brands” – Usually paid on a retainer basis or after the customer sales take place – Can be cost effective for large organizations to hire firms to cover feeder cities Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Distribution Channels and How Distribution Channels Work (cont.) Manufactured goods – Wholesaler, broker, retailer = distribution system – Internet allows direct sales to customers, or disintermediation Has allowed for creation of new intermediaries Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition Hospitality firms – The manufacturer is the retailer – Simultaneous production and consumption – Requires different distributors: geographic and virtual distribution © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Distribution Channels and How Distribution Channels Work (cont.) Structure of distribution – Vertical integration: won the suppliers for raw materials as well as the retailers who sell the products Rare in manufacturing Full integration Partial integration Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Distribution Channels and How Distribution Channels Work (cont.) Vertical marketing system: any unified combination of suppliers, producers, wholesalers, or retailers working together – Corporate – Administered – Contractual Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Different Business Models that Bring the Product to the Customer Ownership of facilities – – Own and have others manage Typically hire former hoteliers; an “asset manager” Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition Management and ownership of one facility or multiple facilities – Provides the brand name with the best integrity – Customers will more likely find consistency – Expansion is more difficult © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Different Business Models that Bring the Product to the Customer (cont.) Management without ownership – Next to best for maintaining quality – Operate under a management contract – Financial and place benefits for the management company – Owners might let physical facilities deteriorate – Owners might change management companies Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Different Business Models that Bring the Product to the Customer (cont.) Franchising – Used to increase distribution network – Franchisor control varies widely – Advantages Brand recognition Comprehensive reservations network Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Different Business Models that Bring the Product to the Customer (cont.) Franchise support – Technical knowledge – Managerial techniques – Marketing support – Financial support Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition Franchise support – – – – Safeguards Auditing Reservation system Sales support © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Different Business Models that Bring the Product to the Customer (cont.) The future of franchising – Need to provide greater services to franchisees – Customers’ inability to differentiate between franchises and other ownership properties – Different philosophies by brand – “Reflagging” – Advantages and disadvantages Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Different Business Models that Bring the Product to the Customer (cont.) Strategic alliances – Companies that form strategic alliances with other companies that have complementary customers for more exposure and faster growth – Examples: SAS Hotels and Radisson Universities and sporting goods companies or soft drink companies Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Different Business Models that Bring the Product to the Customer (cont.) Restaurant distribution – Send the product to the customer Take home Home delivery Hotel delivery Takeout Taxi Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4th edition © 2007 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.