Being in the right place at the right time

When E. Jerome McCarthy expanded marketing mix framework by his 4Ps of marketing in 1960, little he must have known that it would cultivate into a major marketing strategy. The 4Ps – Product, Price, Promotion and Place- are used by marketers with equal prominence where no one P has more importance.  The price of a product will take in to account its cost of advertising/promotion and distribution.

Sometimes, when you go to a supermarket to buy grocery and while in the queue to pay, you see a pack of chewing gum and add that to your trolley. This is the strategic placement of product.  No matter how good the product is, it should be in the right place at the right time to be bought (Learnmarketing.net)

Channel distribution in tourism industry 

For a resort or a hotel or any other tourism product, reaching out to travelers can be done in two-ways, directly or indirectly. Direct channels can be online or offline and bookings are made directly on website or via walk-in, phone or email. Indirect channels involve intermediaries. The tourism distribution channel would ideally fall under the ‘Intensive Distribution channel given the various modes of channels used to market a travel product to consumers. For example, Flight Centre, in order to maximize customer reach has physical stores, TV ads, online bookings, telephonic customer care and digital marketing channels. In Australia, they have 20% market share in travel agency services (IBISWorld, 2016). Have a look at the video to understand how they reach customers with excellent placement strategy of their brand.

So many ‘places’ to go and to book !  

Let’s say you are tired and exhausted of studying or working and decide to a short trip to clear your head, what is the most likely action you will take? Switch on your laptop and browse through heaps of online traveling websites. What has changed since the past? Why are there so many online travel agencies and fewer traditional travel agents whom people used to go to and plan their vacations? Consumers are using internet as a means to access information and book tourism products (Tourisme-Kit, 2011)

Tourism with a traditional distribution channel is where the intermediaries play a vital role. At each step in the chain, the intermediary charges a fee for their service. Traditional travel agents generally provide services through physical stores, phone, email or fax (failteireland.ie).  Three main distributors that exist in the chain are Retail Travel Agents, Wholesalers and Inbound Travel Operators (ITO).

Capture

Source: Distribution 2020: Situational Analysis, PwC, 2013

However internet usage for tourism purpose started post 1993 when World Wide Web was made free for the public (CERN,2003). Since then, the distribution has transformed by the Online Distribution Channel with customers willing to plan travels on their own with the information available on agency websites. Customers now have access to all distributors in the supply chain, making it a very competitive industry.

Source: Distribution 2020: Situational Analysis, PwC, 2013

Source: Distribution 2020: Situational Analysis, PwC, 2013

Placing in new Consumer Purchase Cycle

Tourism agencies in Australia are moving towards a high online presence to be in line with the customer’s purchase cycle. Almost all major companies now have a

Source: Distribution 2020: Situational Analysis, PwC, 2013

Source: Distribution 2020: Situational Analysis, PwC, 2013

website where customers can search through products (hotels, tour operators, etc.) and then make a booking. The human involvement has faded off a bit in the distribution channel. The new customer purchase cycle in this industry has caused a larger disintegration in the distribution channel. The online influence has reached at every stage of a consumer’s decision to plan and book travel options. This is why there is a growing importance to have presence on websites, search engines, social media and travel review websites (PwC, 2013). It’s all about being in the right place at the right time.


By – Aakash Mehta (Username: ahmeh2015)


References

Bogdanovych, A., Berger, H., Simoff, S. and Sierra, C. (2016). Travel Agents vs. Online Booking: Tackling the Shortcomings of Nowadays Online Tourism Portals. [online] Available at: https://opus.lib.uts.edu.au/bitstream/10453/2445/3/2006005124.pdf [Accessed 11 May 2016].

Destination NSW. (2016). Distributing your tourism product. [online] Available at: http://www.destinationnsw.com.au/wp-content/uploads/2013/10/Tourism-Business-Toolkit-VOL2-Chapter2.pdf [Accessed 15 May 2016].

Failte Ireland. (2013). Sales Connect Toolkit_Step2_Distribution Channels. [online] Available at: http://www.failteireland.ie/FailteIreland/media/WebsiteStructure/Documents/2_Develop_Your_Business/3_Marketing_Toolkit/2_Selling_to_Overseas_Markets/SalesConnectToolkit_Step2_DistributionChannels.pdf [Accessed 11 May 2016].

Kracht, M. and Wang, D. (2010). Examining the Tourism Distribution Channel: Evolution and Transformation. International Journal of Contemporary Hospitality Management, 22(5).

PWC.com.au. (2013). Distribution 2020: Situational Analysis. [online] Available at: http://www.tourism.australia.com/documents/corporate/Distribution_Final_Fullreport.pdf [Accessed 15 May 2016].

Tourism VIC. (2011). Online Distribution 101. [online] Available at: http://www.tourism.vic.gov.au/images/stories/ATDW_EKIT/tourism_e_kit_v7_38.pdf [Accessed 14 May 2016].

Vliet, V. (2013). Marketingmix – 4 P’s (McCarthy) – ToolsHero. [online] Toolshero.com. Available at: http://www.toolshero.com/marketing/marketingmix-4p-mccarthy/ [Accessed 14 May 2016].

YouTube. (2013). Flight Centre Australia Brand Ad – The Airfare Experts. [online] Available at: https://www.youtube.com/watch?v=CKOwV44-F5I [Accessed 16 May 2016].

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