Homeworks academic service


What are some types and sources of channel conflict

A marketing channel is how a product moves from its manufacturer to the consumer.

Horizontal & Vertical Marketing Conflicts

Channels have different stages, or levels. Typically, the first level of a channel is a factory.

  • Increasing levels of noise or evidence of declining channel support for your product line would be indicators to pay attention to;
  • What is Channel Conflict?
  • While channel conflict can rarely be eliminated completely, it is critical to contain it;
  • In the first channel, the manufacturer sells its products directly to consumers via its official website;
  • For example manufacture often make changes in product design, prices and promotional strategies.

The second level is the wholesaler who buys a large number of products to sell to retail stores, which occupy the third and final level. When members of a channel disagree about methods or goals, conflicts ensue.

  1. In return the franchisees are expected to operate in strict accordance with the franchiser standards operating procedure.
  2. Each member of the marketing channel has his own set of goals and objectives that are very often incompatible with those of other channel members. Various channel members have expectations about the behavior of the other channel members.
  3. In both cases c and d , the full service retailers are likely to become economically demotivated and shift their sales attention to more profitable products.
  4. They can be primarily divided into pre-contractual and post-contractual conflicts and conflicts based on channel levels.

Horizontal Conflicts A horizontal conflict refers to a disagreement among two or more channel members at the same level. For example, suppose a toy manufacturer has deals with two wholesalers, each contracted to sell products to retailers in different regions.

Channel Conflict Management

If the toy manufacturer doesn't help solve the problem, its business dealings with both the wholesalers -- and the downstream retailers, as well -- might be in jeopardy. Vertical Conflicts Vertical conflicts involve a disagreement between two channel members on consecutive levels.

Horizontal & Vertical Marketing Conflicts

For example, if the toy manufacturer discovers its products are arriving at retail stores later than scheduled, a conflict might develop between the manufacturer and the wholesaler responsible for shipping to retailers. At the same time, the retail stores might be in conflict with the wholesaler due to its inability to ship products on time.

Types of Channel Conflict

Multichannel Conflicts Multichannel conflicts refer to disagreements among members in separate marketing channels. While neither strictly horizontal nor vertical, these conflicts can affect all members of every channel.

For instance, suppose the toy manufacturer participates in two marketing channels. In the first channel, the manufacturer sells its products directly to consumers via its official website.

  • However, as emotion builds, the channels will begin to react by reducing support of the product line or by switching out that line wherever possible;
  • Channel conflicts can be of different types;
  • References 2 Marketing Management; Rajan Saxena About the Author Stan Mack is a business writer specializing in finance, business ethics and human resources;
  • The second channel is the traditional channel i;
  • These discounts allow the "high-cost" channel to compete against "low-cost" channels for those customers who value the high support Shared costs—the key difference between this concept and functional discounts is that functional discounts compensate the channel for incremental tasks via a discount on product sold, while shared costs pay directly for the task Compensation for market share—usually applied to direct versus indirect conflict, the direct sales rep is compensated based on total market share in a territory;
  • Creative and effective channel leadership result in channel members moving towards shared goals.

In the second channel, the manufacturer sells its products to wholesalers for resale to retailers. The resulting conflict will require some solution that works for both channels.

  1. The conflict between two retailers of the same manufacturer faces disparity in terms of sales target, area coverage, promotional schemes, etc.
  2. Few manufacturers can afford the loss in effective market coverage that this unilateral channel decision can result in.
  3. Horizontal Conflicts A horizontal conflict refers to a disagreement among two or more channel members at the same level.
  4. If the manufacturer changes the promotional scheme of a product with the intention to cut the cost, the retailer may find it difficult to sell the product without any promotional scheme and hence the conflict arises. If this ideal situation is achieved, distribution channels will be in a better position to satisfy the demands of target customers and maximize profits of individual channel members.
  5. At the same time, the retail stores might be in conflict with the wholesaler due to its inability to ship products on time. Increasing levels of noise or evidence of declining channel support for your product line would be indicators to pay attention to.

Considerations No simple recipe exists for avoiding channel conflicts. The most effective approach for business owners is to approach channel management with transparency and a willingness to find compromises that work for all the members of the various channels to which it belongs. References 2 Marketing Management; Rajan Saxena About the Author Stan Mack is a business writer specializing in finance, business ethics and human resources.

  • They can originate from competing roles, clash of domains and differing perceptions of reality;
  • Please allow 5 to 10 days for delivery of the Book;
  • On a more micro basis i.

Mack studied philosophy and economics at the University of Memphis.