Which is the best choice and why

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Reference no: EM131985050

As the simulation opens, your company is still selling directly to the customer through phonebanks or issuing tickets through travel agents and corporate travel accounts.

You recognize thatnew customers are less likely to buy tickets through these channels. In considering your strategy,you must take into account the fact that one of your largest travel agents has threatened to give thetickets on your routes to your competitor(s). You may change your mechanism for ticket sales as follows: which is the best choice and why?

1. Maintain your phone banks and travel agent relationships. Offer electronic tickets at a 4%discount. This will also decrease your cost of operations slightly.

2. Join several Web consortiums for ticket sales. Maintain your telephone access.Commissions to the consortiums are 3% of sales along with the possibility that you willgenerate some new demand. The consortium, which has the advantage of having severalindependent sites, would charge 3% to you in commission and give the customer a 2 to 5%discount.

3. Maintain your telephone bank and open a Web site of your own for ticket sales. You willhave a one-time $20,000 startup cost but no commissions will need to be paid on ticketssold on the Web. Discount the tickets 2 to 5% to the customers that order through yourweb site.

4. In order to avoid the additional expense of managing a Web site, contract with owners of alarge, nationally known site to sell tickets. Their ability to get you on their Web site withintwo weeks has great appeal. Sales should increase with such a well-known site. Theywould charge you 5% for each ticket sold and would also sell the tickets at a 2 to 5%discount. No front-end cost.

Reference no: EM131985050

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