The paper "Distribution Channels in the Hotel Industry" is a great example of management coursework. Distribution involves the delivery of products and services to the end-user or to the clients. This is as a result of most businesses using intermediaries in bringing products to the market. The main function of a distribution channel involves providing a link between production and consumption. Ann (2001) describes that major functions are therefore performed in businesses that use distribution channels. These involve information which is necessary for marketing planning as it enables businesses to gather and distribute market research and intelligence.
The other function of the distribution channel is a promotion which is involved in developing and spreading communication about products and services offered by the organization. The above study explains what distribution channels are and their importance. The study also shows the different types of distribution channels used in the hotel industry and how they are effective in generating revenue. According to Best (2009) in order for distribution channels to be effective matching should be properly effected as it enables business in adjusting the offer in a way that it fits the customers’ needs for example by use of packaging, assembling or grading.
In the hotel industry, the whole package which includes room service, food and other services should be appealing to the customer. Negotiation is another major function of distribution channels as it helps in helping management to come up with a particular price to charge as well as other terms being offered by the industry. It is also necessary to contact various people as it facilitates communicating with prospective buyers. Physical distribution is a major function which helps in transporting and storing of goods.
Financing, on the other hand, helps in acquiring and using funds to cover the costs of the distribution channel. Risk-taking is a major function as it enables a firm to assume various commercial risks for example by operating a channel and holding stock. For the above function to be cost-effective various levels need to be incorporated and every market intermediary performs some work of bringing the product to its end-user. The first channel level is from the manufactures to the customer.
The other level is from the manufacturer to the retailer and finally to the customers as shown in the diagram below. The above diagram represents the number of distribution channels where each layer of the marketing intermediaries has a duty of bringing the product closer to the final consumer. Channel one is direct marketing where the manufacturer directly sells to the consumer while the other channels represent indirect marketing. Direct marketing is where there are no intermediaries as the manufactures sell directly to the customers and this kind of distribution is used mostly in holiday companies (James, 2010). Channel two has one intermediary which is mostly the retailer.
This method is mostly used in distributing consumer electrical goods in the UK where producers of Sony, Panasonic etc sell their goods to the retailers who later sells the goods to the end-user. Channel three has two intermediaries who are the wholesaler and the retailer. The wholesaler buys goods in bulk from various producers and later breaks the products to supply to retailers in small quantities. This method is effective to use in small businesses and works best where the retail channel is fragmented for example is it used in the distribution of drugs.
Anne, F. (2001). Marketing channels. Sydney: Springer.
Arikan, A. (2008). Multichannel marketing: Metrics and methods for on and offline success. Indianapolis, Ind.: Wiley Technology Pub.
Best, R. (2009). Market-based management: Strategies for growing customer value and Profitability. Upper Saddle River, N.J.: Pearson/Prentice Hall.
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Chekitan, S. & Don, S. (2005). In the mix, A customer-focused approach can bring the current marketing mix into the 21st Century, Marketing management. New York: Macmillan.
James, L. (2010). Distribution channel management, Bridging the sales and marketing divide, Kellogg School of management.
Macy, M. (2004). Trends in hotel distribution channels, viewed 12 July 2011,
Michael, D. & Thomas, W. (2009). Business marketing management: B2B, 10th ed., London: Cengage Learning.