Chapter 12: Distribution Channels

1. Producing a product or service and making it available to buyers requires

building __________ not just with customers, but also with key suppliers and
resellers in the companys supply chain.
2. __________ from the company is the set of firms that supply the raw materials,
components, parts, information, finances, and expertise needed to create a
product or service.
3. Downstream marketing channel partners, such as __________ and __________,
form a vital connection between the firm and its customers.
4. A well-managed distribution system can make the difference between a
market-share __________ and a company struggling for survival.
5. __________, a __________ marketplace, __________ distribution techniques, and a
__________ product have increased the importance of distribution.
6. __________ has meant that many hotel companies must choose foreign
partners to help them market or distribute their products.
7. A distribution channel is a set of __________ organizations involved in the
process of making a product or service available to the consumer or business
user.
8. Distribution networks in the hospitality industry consist of contractual
agreements and loosely organized __________ between independent
organizations.
9. In the hospitality and travel industries, distribution systems are used to move
the __________ to the product: the hotel, restaurant, cruise ship, or airplane.
10.Selling through wholesalers and retailers usually is much more efficient than
direct __________.
11.A distribution channel moves goods from __________ to consumers. It
overcomes the major time, place, and possession gaps that separate goods
and services from those who would use them.
12.__________: Gathering and distributing marketing research and intelligence
information about the marketing environment
13.__________: Developing and spreading persuasive communications about an
offer

14.__________: Agreeing on price and other terms of the offer so that ownership
or possession can be transferred
15.Risk taking: Assuming financial risks such as the inability to sell __________ at
full margin
16.Shifting functions to the intermediary may keep producer costs and prices
low, but intermediaries must add a __________ to cover the cost of their work.
To keep costs low, functions should be assigned to channel members who can
perform them most efficiently.
17.Each layer that performs some work in bringing the product and its ownership
closer to the final buyer is a __________ level.
18.From the producers point of view, a greater number of intermediaries in the
channel means less __________, more __________, and more __________.
19.A __________ must choose the intermediaries that will make up the distribution
system and the number of levels that the distribution system will have.
20.One way of reaching a geographically __________ marketplace is through
travel agents.
21.Hotels seeking travel agent business must make it easy for agents to make
reservations. Providing toll-free reservation __________ is essential.
22.Hotels must do everything possible to make a __________ impression on
guests booked through travel agents to ensure future business from that
agent.
23.__________ travel agents are one of the strongest areas of the travel agency
business.
24.In developing a package, a tour wholesaler contracts with airlines and hotels
for a specified number of seats and rooms, receiving a __________ discount.
25.The tour wholesaler has to provide a __________ for the travel agent and give
consumers a package that is perceived to be a better value than what they
could arrange on their own.
26.With the increased number of international resorts, tour wholesalers are
becoming a powerful member of the __________ channel.
27.Tour __________ sell motor coach tours, which are attractive to a variety of
markets.

28.Motivational houses provide __________ travel offered to employees or

distributors as a reward for their efforts.
29.__________ reps serve the casino industry as intermediaries for premium
players. Junket reps maintain lists of gamblers who like to visit certain gaming
areas, such as Reno, Las Vegas, or Atlantic City, and they work with one or a
few casinos rather than the entire industry.
30.It is often more effective for hotels to hire a hotel representative than to use
their own salesperson. This is true when the market is a __________ one and
when cultural differences may make it hard for an outsider to penetrate the
market.
31.__________ changes in hotel representatives are not cost efficient or cost
effective.
32.National, state, and local tourist agencies are an excellent way to get
__________ to the market and gain room bookings.
33.State agencies __________ the state resources and attractions overseas,
nationally, and in the state itself.
34.Reservation systems provide a __________ reservation system for hotels. They
usually provide the system for small chains or provide an overseas
reservation service, allowing international guests to call a local number to
contact the hotel.
35.A __________ is a group of hospitality organizations that is allied for the
__________ benefit of the members.
36.The consortium allows a property to be independent in ownership and
management while gaining the advantages of __________ marketing.
37.The difference between a consortium and reservation company is that the
__________ provides a more comprehensive range of marketing services and
its members pay for these services with initial joining fees and annual fees.
38.Global __________ systems (GDSs) are computerized reservation systems that
serve as a product catalog for travel agents and other distributors of
hospitality products.
39.Internet reservations account for almost _____ percent of leisure and business
travel bookings.
40.Almost all hotel brand Web sites offer a low price guarantee. This encourages
guests to book __________ with the hotel company, rather than through an
intermediary.

41.One model of distribution on the Internet is called the __________ model. In

this model distributors mark up discounted net-rate hotel rooms.
42.Priceline and Hotwire use an __________ system where the buyer cannot
specify any particular hotel or airline; thus, someone with a brand preference
cannot compare prices with specific hotels.
43.Persons who purchase from a third party on the Internet pay the __________
party.
44.Point of sale (POS) systems are now available that allow guests to make
__________ over the Internet and include when they want to pick up the order.
45.One of the major advantages of the Internet is it saves __________. The
Internet is an excellent example of how service companies can get the
customer to be their employee.
46.Each channel member is __________ on the others, playing a role in the
channel and specializing in performing one or more functions.
47.Although channel members depend on each other, they often act alone in
their own short-run best interests. They frequently disagree on the roles each
should play or who should do what for which rewards. Such disagreements
over goals and roles generate channel __________.
48.__________ conflict is conflict between firms at the same level of the channel.
49.__________ conflict, which is more common, refers to conflicts between
different levels of the same channel.
50.Some conflict in the channel takes the form of healthy competition. Without
it, the channel could become __________ and __________.

51.
52.By contrast, a vertical marketing system (VMS) consists of __________,
__________, and __________ acting as a unified system. One channel member
owns the others, has contracts with them, or wields so much power that they
all cooperate.
53.In a corporate VMS, coordination and conflict management are attained
through __________ ownership at different levels in the channel.
54.A contractual VMS consists of independent firms at different levels of
production and distribution who join through __________ to obtain economies
or sales impact.
55.Franchising is a method of doing business by which a franchisee is granted
the right to engage in offering, selling, or distributing goods or services under
a marketing format which is designed by the franchisor. The franchisor
permits the franchisee to use its __________, __________, and __________.
56.One of the reasons for the popularity of franchising is that it is the __________
way to start a new business.
57.One of the reasons that companies decide to franchise is that it allows for
increased __________ of their products.
58.A variation of the traditional form of franchising is __________. In this form of
franchising, the franchisor sells the right to distribute a franchise to a third
party, and this agent then sells to the franchisees.
59.__________, another form of contractual agreement, are developed to allow
two organizations to benefit from each others strengths.

60.Another channel development is __________ marketing systems (HMS), in

which two or more companies at one level join to follow a new marketing
opportunity.
61.Today, with the proliferation of customer segments and channel possibilities,
more companies have adopted __________ marketing distribution.
62.To design an effective __________, the company must understand the services
its customers require and then balance the needs of those customers against
the feasibility and costs of meeting them.
63.Just as a company carefully chooses its employees, it should carefully choose
channel members. These firms will represent the company and will be
partially responsible for the companys __________.
64.__________ costs are created when we discount products, only to find out that
we could sell them for a higher price.
65.Using sales representatives offers ___________ control than building your own
sales force.
66.One of the most important aspects of distribution for hospitality organizations
is __________.