P3: Different types of Interrelationships
Chain of Distribution
The Chain of Distribution means products are distributed from producers (principals) to
consumers, often via wholesalers and retailers.
Principals Principals such as Hotels, Airlines and
Transport organisations.
They sell package holidays by putting
Tour everything together such as flights,
operators Accommodation and transportation.
They will help you to book holidays for
Travel you, the cheapest fares and the best places
Agencies to go and stay.
Consumers They will buy the products and services
from the producer.
Vertical Integration
Merging together of two businesses that are at different stages of production for example
Thomas Cook have bought and created airlines, hotels and travel agencies which allow
them to offer better prices to customers. Merging in this way with something further on in
the production process (and thus closer to the final consumer) is known as forward
integration. For example tour operator may buy a travel agency.
Chain of Distribution
The Chain of Distribution means products are distributed from producers (principals) to
consumers, often via wholesalers and retailers.
Principals Principals such as Hotels, Airlines and
Transport organisations.
They sell package holidays by putting
Tour everything together such as flights,
operators Accommodation and transportation.
They will help you to book holidays for
Travel you, the cheapest fares and the best places
Agencies to go and stay.
Consumers They will buy the products and services
from the producer.
Vertical Integration
Merging together of two businesses that are at different stages of production for example
Thomas Cook have bought and created airlines, hotels and travel agencies which allow
them to offer better prices to customers. Merging in this way with something further on in
the production process (and thus closer to the final consumer) is known as forward
integration. For example tour operator may buy a travel agency.
