How do you understand the term “code-sharing”?

Who takes part in distribution channels?

Distribution (or placement) is one of the four aspects of marketing. A distributor is the middleman between

the manufacturer and retailer. After a product is manufactured it may be warehoused or shipped to the next echelon in the supply chain, typically either a distributor, retailer or consumer.

A number of alternate 'channels' of distribution may be available:

·     Selling direct, such as via mail order, Internet and telephone sales

·     Agent, who typically sells direct on behalf of the producer

·     Distributor (also called wholesaler), who sells to retailers

·     Retailer (also called dealer or reseller), who sells to end customers

·     Advertisement typically used for consumer goods

Distribution channels can thus have a number of levels. Kotler defined the simplest level, that of direct contact with no intermediaries involved, as the 'zero-level' channel.

The next level, the 'one-level' channel, features just one intermediary between producer and customer - a retailer. In small markets (such as small countries) it is practical to reach the whole market using just

one- and zero-level channels.

In large markets (such as larger countries) a second level, a wholesaler for example, is now mainly used

to extend distribution to the large number of small, neighborhood retailers.

Why do some companies make luxury products abroad rather than at home? Give examples.

1

Some companies prefer to make luxury products abroad rather than at home because they want to lower the firm costs. The process of subcontracting to a third-party company is named outsourcing. The reasons for outsourcing are many and varied, such as cost saving, cost restructuring, improving quality, knowledge and many others. The classical examples of companies making their products abroad are Coach, the US

leather goods maker, which outsources all its products to Asia, and Burberry, which also has many Asian

licensing arrangements.

Some people believe that luxury fashion products should always be made in Europe.  What's your opinion? Give examples.

Although outsourcing is a widespread practice nowadays consumers have dual attitude to it. There is a strong public opinion regarding outsourcing (especially when combined with offshoring- the practice of

moving a company's operating base to a foreign country where labour costs are cheaper) that outsourcing damages a product quality dramatically. To be honest, I support this point of view. For example, about

ten years ago all products of British cosmetics company Avon were made in Europe. But now about 70%

of its production is outsourced in Russia and near abroad. Of cource the price of Avon cosmetics became

much cheaper but it’s not a secret that the quality changed dramatically too.

U n it 2. Travel

1. What types of airlines do you know?

2. How do you understand the term “code-sharing”?

3. What forms of cooperation between companies are there?

4. Why do people sometimes behave badly on planes? What causes such behaviour?

What types of airlines do you know?

Formerly airlines were classified into local, regional, national and international. Today they are classified according to their annual turnover. The biggest companies have the turnover from $100 million to $1

billion, the big regional - $10-$100 million, the average – less than $10 million.

It’s very important to remember that there are two kinds of airline operations-scheduled and

nonscheduled. A scheduled airline operates on fixed routs at fixed times according to a timetable that is available to public.

A nonscheduled airline operates on routs at a time when there is a demand for the service. The nonscheduled airline is in other words a charter operation that rents an aircraft.

How do you understand the term “code-sharing”?

Code sharing is a business term which was first originated in the airline industry in 1990 when the

Australian airline, Qantas Airways and the US's American Airlines combined services between an array

of US domestic cities and Australian cities. The code share was part of a "cooperative services" agreement between the two carriers before the various airline alliances were formed. Code sharing is a commercial agreement between two airlines that allows passengers to use a ticket from one airline to travel on another. Most major airlines today have code sharing partnerships with other airlines, and code sharing is a key feature of the major airline alliances.

Lots of airlines, including all the big legacy lines, are involved with codesharing arrangements. Those

arrangements permit you to buy through tickets on routs that no single airline can serve. They may also provide opportunities to cut the cost of your airfare.