ch10 (1).pptx

Distribution Strategy Chapter 10  Supply Chain The supply chain for hospitality and tourism services consists of all suppliers and vendors, intermediaries, procurement and delivery systems, and retail outlets that assist firms in obtaining products and services and u...

Distribution Strategy Chapter 10  Supply Chain The supply chain for hospitality and tourism services consists of all suppliers and vendors, intermediaries, procurement and delivery systems, and retail outlets that assist firms in obtaining products and services and using them to add value in producing and delivering the final service to customers.  Supply Chain Management Supply chain management involves the integration of all organizations, people, and activities so that services are produced and distributed in an efficient manner to customers at the right time and place. Basic Hotel Supply Chain  In-House vs. Outsourcing Supply Chain Activities PerformingActivities In House OutsourcingActivities Maintain quality standards Avoid capital investment Lower cost and control price Take advantage of supplier expertise Control delivery time and supply quantity Reduce inventory costs and free capacity Protect proprietary design or process Maintain multiple sources of supply Utilize employee strengths Lack of necessary competencies  Distribution Activities Communication and negotiation Facilitating transactions Storing and moving physical goods Installation and service  Channel Organization Channel Length Width – Direct Exclusive channel distribution – Indirect Selectivechannel distribution – Intensive distribution Alternative Channel Structures  Intermediaries Travel Agents Tour Wholesalers and Operators Meeting Planners Hotel Representatives Destination Marketing Organizations Destination Management Companies Concierge  Channel Management Channel Power Channel Leadership Vertical Marketing Systems Channel Member Selection & Retention  Vertical Marketing Systems Corporate system – channel members belong to the same organization Administered system – one member attempts to control the flow based on some form of power Contractual system – based on legal contract (e.g., franchising)  Building Customer Value Increasing customer benefits – Delivering product benefits – Delivering service benefits – Building brand image – Building company benefits Improving cost efficiency Channel without Intermediary Channel with Intermediary  Franchising Advantages Disadvantages Franchisee Established product Additional fees Technical assistance Loss of control Quality standards Difficult to terminate Less operating capital Pooled performance Opportunities for growth Cooperative advertising Franchisor Rapid expansion Loss of control Diversified risk Reduced profits Cost economies Legal issues Cooperative advertising Recruitment Employee issues © 2016 John Wiley & Sons, Inc.