Distribution is a part of the marketing mix with the main function of supplying a company's products or services to their targeted customers. Distribution also known as "place" is one of many strategies used by organizations to deliver their goods to the end user. Deciding on the right channel of distribution is vital to getting merchandise to the target market's Place. Distribution plays a fundamental role to having products not only in the right place, but in addition at the right time and in the right quantities to maximize sales and reduce inventory and storage costs.
Producers must choose whether to manage the whole distribution themselves or possibly by relying on retailers. Many organizations prefer to distribute directly to the end customer because they want complete control over the marketing of their product.
Whatever the choice in order for distribution channels to run seamlessly cooperation is required from both the producer and distributors.
The article reviewed points out how by focusing on reducing distribution costs to impress financial investors the airline industry is destroying the value of its distribution network. According to the article, the airline industry is accomplishing this by under pricing their distribution network. The article goes on to say that due to higher costs in regards to fuel and labor, the airlines are under enormous stress to improve their business models. In addition, the article points out that travel agency's commissions have virtually been eliminated. The article suggests charging a transaction fee, so that airlines would produce a clarity for their cost of distribution.
In addition to selling direct, the airline industry out sources to travel agencies to make reservations and ticket distribution to the end consumer. The channels of distribution used by the airline industry helps support their product in that travel agencies are located in...