Conflict Management(Mkt.)

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GOOD

 MORNING

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CONFLICT  

 MANAGEMEN T 

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MARKETING CHANNELS 

Most producer do not sell there goodsdirectly to the final users; between themstands a set of intermediaries performinga variety of functions. Theseintermediaries constitute a marketchannel (also called a trade channel or

distribution channel).

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CONFLICT, COOPERATION AND 

COMPETITION 

Channel conflict is generated when one

channel member·s actions prevent thechannel from achieving its goal. Channelcoordination occurs when channel

members are brought together to advancethe goals of the channel, as opposed totheir own potentially incompatible goals.

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TYPES OF CONFLICTS:

Vertical channel conflict: It means a conflictbetween different levels within the samechannel. HLL came in conflict with its

distributors in Kerala on the issue ofcommission.

Horizontal channel conflict: It involves aconflict between members at the same level

within the channel. Dealers frequently get intoconflict with each other for the transgressionof the domain of operation and under cutting.

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Multichannel conflict: It exists when

the manufacture has established two or morechannels that sell to the same market. EscortsLtd., trying to create parallel dealership for aline of tractors in the early 1980s, faced

massive protest established dealers.

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CAUSES OF CHANNEL CONFLICT :

Goal incompatibility

Unclear role and rights

Difference in perception Intermediaries

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GOAL INCOMPATIBILITY: It is a majorcauses of conflict. For example, themanufacture may want to achieve rapidmarket penetration through a low-pricepolicy. Dealers in contrast, may prefer to

work with high margins and pursue short-run profitability. UNCLEAR ROLE AND RIGHTS: HP may

sell personal computers to large accounts

through its own sales force, but itslicensed dealers may also be trying to sellto large accounts. Territory boundariesand credit for sales often produce

conflict.

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DIFFERENCE IN PERCEPTION: Themanufacture may be optimistic about the

short-term economic outlook and wantdealers to carry higher inventory. Dealersmay be optimistic. In the beveragecategory, it is not uncommon for disputesto arise between manufactures and theirdistributors about the optimal advertisingstrategy.

INTERMEDIARIES: Conflict might alsoarise because of the intermediaries,dependence on the manufactures. Thefortunes of exclusive dealers, such as autodealers, are profoundly affected by themanufactured product and pricing

decisions.

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MANAGING CHANNEL CONFLICT 

The adoption of supervision goals. Channelsmember come to an agreement on thefundamental goal they are jointly seeking,

whether it is survival, market share, highquality, or a shift in consumer desire.

Exchange persons between two or more

channel level. General Motors executivesmight agree to work for a short time in somedealerships, and some dealership ownersmight work in GM·s dealer policy department.

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Co-operation is an effort by one

organization to win the support of theleaders of another organization byincluding them in advisory, boards of

directors and the like. When conflict is chronic or acute, theparties may have to resort to diplomacy,mediation, or arbitration.

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