©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakensChapter13DistributionChannels©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakens“Adversarialpowerrelationshipsworkonlyifyouneverhavetoseeorworkwiththeotherpartyagain.”-PeterDrucker©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakens©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakensChapterObjectives•Describethenatureofdistributionchannels,andtellwhymarketingintermediariesareused•Understandthedifferentmarketingintermediariesavailabletothehospitalityindustryandthebenefitseachoftheseintermediariesoffers•KnowhowtousetheInternetasadistributionchannel©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakens©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakensChapterObjectives•Discusschannelbehaviorandorganization,explainingcorporate,contractual,andverticalmarketingsystems,includingfranchising•Illustratethechannelmanagementdecisionsofselecting,motivating,andevaluatingchannelmembers•Identifyfactorstoconsiderwhenchoosingabusinesslocation©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakens©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakensDistributionChannels•Adistributionchannelisasetofindependentorganizationsinvolvedintheprocessofmakingaproductorserviceavailabletotheconsumerorbusinessuser•Usedtomovethecustomertowardstheproduct©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakens©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakensWhyUseMarketingIntermediaries?•Sellingthroughwholesalersandretailersusuallyismuchmoreefficientandcosteffectivethandirectsales©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakens©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakensDistributionChannelFunctions•Information:gatheringanddistributingmarketingresearchandintelligenceinformationaboutthemarketingenvironment•Promotion:developingandspreadingpersuasivecommunicationsaboutanoffer©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakens©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakensDistributionChannelFunctions•Contact:findingandcommunicatingwithprospectivebuyers•Matching:shapingandfittingtheoffertothebuyer’sneeds,includingsuchactivitiesasmanufacturing,grading,assembling,andpackaging©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakens©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakensDistributionChannelFunctions•Negotiation:agreeingonpriceandothertermsoftheoffersothatownershiporpossessioncanbetransferred•Physicaldistribution:transportingandstoringgoods©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakens©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakensDistributionChannelFunctions•Financing:acquiringandusingfundstocoverthecostsofchannelwork•Risktaking:assumingfinancialriskssuchastheinabilitytosellinventoryatfullmargin©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakens©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakensNumberofChannelLevels•Channellevelcanbedescribedasdistributionchannels•Directmarketingchannel•Retailer•Wholesaler©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakens©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakensCustomerMarketingChannelsCustomerMarketingChannels©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakens©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakensMarketingIntermediaries•TravelAgents•TourWholesalers•Specialists•HotelReps•Concierges•National,State,andLocalAgencies•ConsortiaandReservationSystems•GlobalDistributionSystems•Internet©2006PearsonEducation,Inc.MarketingforHospitalityandTourism,4theditionUpperSaddleRiver,NJ07458Kotler,Bowen,andMakens©2006Pears