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Friday, October 12, 2012

Top 10 Travel Distribution Fallacies - #2 If distribution costs come in line, the industry will be healthy again

If distribution costs come in line, the industry will be healthy again

Distribution is a portion of marketing, and marketing is a key cost component for suppliers, but other costs (like labor and capital) have a much greater impact on the bottom line, as does revenue.

In many sectors of the industry, pricing and yield management functions are flawed.

Suppliers are shifting distribution to lower cost channels, but are getting less for their product on average as a result of the focus on price as the channel differentiator.

Distribution cost control can help the P&L, but it does not ensure the health of the industry.

Bottom line?  At the risk of sounding like a broken record, it is profitability that impacts business and industry health.  Profitability comes from making more than you spend.  Nuf said.
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