Direct versus indirect channels

Abstract

PurposeThis article investigates whether intermediaries reduce loss aversion in the context of a high-involvement non-frequently purchased hedonic product (tourism packages). Design/methodology/approach The study incorporates the reference-dependent model into a Multinomial Logit Model with Random Parameters, which controls for heterogeneity and allows representation of different correlation patterns between non-independent alternatives. Findings Differentiated loss aversion is found: consumers buying high-involvement nonfrequently purchased hedonic products are less loss averse when using an intermediary than when dealing with each provider separately and booking their services independently. This result can be taken as identifying consumer-based added value provided by the intermediaries. Practical implicationsKnowing the effect of an increase in their prices is crucial for tourism collective brands (e.g. "sun and sea", "inland", "green destinations", "World Heritage destinations"). This is especially applicable nowadays on account of the fact that many destinations have lowered prices to attract tourists (although, in the future, they will have to put prices back up to their normal levels). The negative effect of raising prices can be absorbed more easily via indirect channels when compared to individual providers, as the influence of loss aversion is lower for the former than the latter. The key implication is that intermediaries can -and should-add value in competition with direct e-tailing. Originality/valueResearch on loss aversion in retailing has been prolific, exclusively focused on lowinvolvement and frequently-purchased products without distinguishing the direct or indirect character of the distribution channel. However, less is known about other types of products such as high-involvement non-frequently purchased hedonic products. This article focuses on the latter and analyzes different patterns of loss aversion in direct and indirect channels.

Selection of Tourism Destination as a Representation of Human Values

“…It is a widely accepted fact that tourism decision making is much more complicated than that of ordinary products (Cai, Ruomei, & Breiter, 2004). Being a high involvement process (Nicolau, 2013), it relies on the evaluation of a number of information sources such as newspaper, magazines, TV, Internet, and friends/relatives. However, the decision-making process itself stems from the human values and affects the various stages of the process.…”

Tourism Systems Thinking: Towards an Integrated Framework to Guide the Study of the Tourism Phenomenon

“…Seventh, tourism is, in essence, an intangible individual experience perceived in a subjective way by each actor (Judd, 2006;Nicolau, 2013;Pearce, 2008). Tourism takes raw material and services not merely to assemble new products; its outcomes are of a different nature.…”

“…Tourism is widely recognized as a complex phenomenon to describe (Brouder & Fullerton, 2015;Darbellay & Stock, 2012;Judd, 2006;Nicolau, 2013;Pearce, 2008;Pearce, Tan, & Schott, 2007;Smith, 1994), and it is much more than "an industry" (McKercher, 2014). In this way, several authors have pleaded for a more systemic approach to tourism (Baggio, 2013;d'Hauteserre, 2006;Goeldner & Ritchie, 2003;Leiper, 1979;Ritchie & Crouch, 2003) that allows an integrative study of its complex nature.…”

Enhancing Destinations’ Social Capital for Access to International Tourism Markets: The Case of the Cajas Massif Biosphere Area

“…iModel (Slika 1) je integrativni model zasnovan na sistemskom mišljenju koji pomaže u procesu odlučivanja (Rodriguez-Giron et al, u postupku recenzije) koji turizam smatra fenomenom koji nastaje iz dinamičnog sustava interakcija (Judd, 2006;Nicolau, 2013;Pearce, 2008;Pearce et al, 2007;Smith, 1994). Pojmovno se bazira na načelima sistemskog mišljenja i shematski ga se može prikazati interakcijama između raznih takozvanih dionika -poduzeća, vlasti, stanovnika i znamenitosti -te posjetitelja.…”

“…The iModel ( Fig. 1) is a systems thinking-based integrative model which supports decision-making (Rodriguez-Giron et al, in review) and which considers tourism to be a phenomenon emerging from a dynamic system of interactions (Judd, 2006;Nicolau, 2013;Pearce, 2008;Pearce et al, 2007;Smith, 1994). It is conceptually based on the principles of systems thinking and schematically illustrated by the interactions between various so-called facilitators -firms, governments, residents and attractions -and visitors.…”