Currently, only 6 to 8 percent of all travel is booked online. However, it is projected that by 2003, more than 23 million North Americans will book their travel online. In the meantime, consumers continue to be skeptical of the Web sites claiming to offer the lowest fares on the Internet. A recent study shows that 55 percent of buyers visit three or more Web sites in search of low fares or schedules, and then buy their tickets from a travel agent. This practice particularly hurts the online sites, as they do not realize any commission from such buyers.

Two popular Web sites for booking online travel are Travelocity and Microsoft's Expedia. Visit these Web sites to familiarize yourself with their working. Another Web site, launched recently, aspires to become the leader in this field. A creation of a collaboration among five major airlines- Delta, United, Northwest, Continental, and American- it hopes to instill confidence in online buyers of travel. The Web site is called Orbitz. It claims to provide complete, unbiased fares. However, given the fact that these airlines control almost 85 percent of the U.S. air travel market, regulators are worried that the site may not remain neutral and the owner airlines may collude on fares and services.

Orbitz is an interesting example of collaboration among competitors. It is also an attempt by service providers (airlines) to eliminate the middleman. Whether it will be able to grab the desired market share despite being a latecomer to the market remains to be seen.

After visiting the three Web sites, answer the following questions:

1. In what ways is the Orbitz site different from Travelocity and Expedia?
   
   
2. Given that Orbitz is run by a partnership of airlines, what could be potential concerns from a consumer's perspective? How has Orbitz tried to address those concerns?
   
   
3. Orbitz claims to offer the lowest airfares on the Internet. Test their claim by finding out the fares from Los Angeles to JFK on the three major online travel sites: Orbitz, Expedia, and Travelocity?
   
   

- Praveen Aggarwal

Companies commonly must juggle distribution decisions and brand image considerations. From a distribution perspective, companies are concerned with ways to provide the product where and when the consumer wants it. On the other hand, making the product available in too many places may weaken the brand image. As such, firms must carefully decide on outlets that fit with the desired product image and target market.

Clinique, Aveda, and Revlon are examples of cosmetic manufacturers with different images that have chosen different distribution strategies. Revlon follows an intensive distribution strategy. Revlon places its cosmetic products in as many outlets as possible. For example, Revlon products can be bought in such places as drugstores and supermarkets. Revlon cosmetics can also be bought online. This strategy gives Revlon the image of a convenience good.

Exclusive distribution is the extreme opposite of intensive distribution because only one retail outlet in a specific geographic area carries the product. While neither of the three cosmetic manufacturers follows an exclusive distribution strategy, Clinique as well as Aveda follow a selective distribution approach. This approach lies between these two extremes and means that a firm selects few retail outlets in a specific area to carry its products. Selective distribution is the most common form and is usually associated with shopping goods. Clinique is available in up-scale department stores and from the company's Internet site. Aveda is available in hair and cosmetic salons referred to as Aveda Concept Salons as well as in specialty stores referred to as Environmental Lifestyle Stores.

1. Where can you buy Clinique, Aveda, and Revlon products?
2. Why do you think is there a difference in outlets for the three cosmetic products?
3. Visit the Aveda Internet site and learn more about Aveda's Environmental Lifestyle Store. Why did Aveda choose to distribute its products via these outlets?
4. Ask five users of cosmetic products about potential differences in the three brands of cosmetic products. What is their response?
5. Revlon and Clinique products can be bought on the Internet. Does this dilute the brand image of Clinique?

- Birgit Leisen

In marketing, we frequently differentiate between consumer goods marketing and business-to-business marketing. In a broad sense, consumer marketing covers exchanges between organizations and final consumers, whereas b-to-b marketing deals with exchanges between organizations. One of the important components of b-to-b marketing is the supply chain management. Even the largest consumer goods marketing companies have to manage their supply chain efficiently in order to be successful. One way to achieve economies in the supply chain is to collaborate with other manufacturers.

One such collaborative attempt by some of the world's largest consumer goods manufacturers to establish an electronic b2b exchange is the newly formed Transora Corporation. Fifty-four consumer product companies, representing more than $500 billion in annual sales, came together to form Transora.com, a collaborative industry e-Marketplace. The objective of forming Transora is to have "seamless, real-time supply chain connectivity and the opportunity for cost reduction, more efficient inventory management and closer customer connections." Visit the Transora Web site to learn more about this new business model of having industry-wide e-commerce portals, and answer the following questions:

1. What functions could a portal like Transora perform for its member organizations?

2. Visit some other b2b exchanges (such as Esteel.com and Plasticsnet.com). What are the two major differences between these portals and Transora.com?

3. B2B exchanges are a relatively new phenomenon. What are some major types of b2b exchanges? Hint: Transora's site provides a classification schema.

4. What are some problems that you can anticipate a portal like Transora would face?

- Praveen Aggarwal

Banking has gone through metamorphosis in Australia and New Zealand. We tend to think of quite recent milestones such as deregulation of the banking sector in the early 1990s when the financial services sector first comes to mind. However, as the Student Report section of this bank's Web site indicates, ANZ has 150 years of history behind it. The issue for many such organisations is how much of this history is heavy baggage and might best be discarded as the online consumer and business markets beckon. Visit the Student Report section by firstly clicking on About ANZ, and then answer the following questions:

1. Where did the ANZ first begin?
2. Did you get lost on the Web site when examining the history of the ANZ?
3. Does the ANZ conduct online research?
4. Does the ANZ regard the Internet / Web as an advertising medium?
5. How do you rate the ANZ Web site?

- Stewart Adam

Every product and or service whether it is an automobile, a bottle of Coca-Cola, a personal computer, a watch, music or any other product amongst the million possibilities, must somehow be made available to literally billions of people. They also must be made available to millions of industrial firms, businesses, institutions and other organizations worldwide. This is the goal of marketing, through the creation of distribution channels. A distribution channel is the network of organizations that creates time, place, and possession utilities for consumers and business users. The creation of time, place, and possession utilities fall on a continuum from simple to complex. Both sales and distribution channels are needed to create time, place and possession utilities. But it has become customary practice in marketing to create marketing channels only in terms of the sales channel, because it is the relationship involving the functions of buying, selling, and transferring the title where the most of the strategic marketing issues emerge.

Channel structure has three basic dimensions: the length of the channel, the intensity at various levels, and the types of intermediaries involved. Let's examine the intensity of Channel Structure through the Internet.

Channel intensity ranges from intensive to selective to exclusive. Intensive means that there are many intermediaries, selective means that there are a smaller number of intermediaries while exclusive refers to only one. Now let's examine a few manufacturer's distribution channels through their respective Internet sites.

Amazon.com
Hallmark
Whirlpool
Dell
Volkswagon
UPS
Federal Express
Abercrombie
Levis

Visit the sites above to answer the questions below.

1. Which manufacturers demonstrate an example of the intensive distribution channel structure and why?

2. Which manufacturers demonstrate an example of the selective distribution channel structure?

3. Which manufacturers demonstrate an example of the exclusive distribution channel structure and why?

4. How is the Internet changing the structure of distribution channels?

- Paula E. Bobrowski