marketing Channel conflict


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  • Conflicts between different levels within the same channel.
    Example : HUL came into a conflict with its distributors in Kerela on the issue of Commission
  • when multiple channels are employed and distribution intensity increases, three profit threats may confront a retailer:
    sales cannibalization
    margin dilution
    customer diversion
  • marketing Channel conflict

    1. 1. Behavioral Processes in Marketing channels Marketing Channels are not just economic systems Marketing Channels are also Social Systems Therefore, the same behavioral processes existing in all Social systems also exist in Marketing Channels
    2. 2. Behavioral Processes in Marketing channels The behavioral processes of most relevance to marketing channels are: Conflict Power Role Communications “noise”
    3. 3. channel conflict is...
    4. 4. When one Party perceives the behavior of another party in the social system to be impeding the attainment of its goals, a state of conflict exists.
    5. 5. channel conflicts Conflict is generated when actions of any channel member come in the way of the system achieving its objectives. Three broad categories of channel conflict are: Goal conflict – understanding of objectives by various channel members is different. Domain conflict – understand responsibilities and authority differently. Perception conflict – reading of the market place is different and proposed actions vary.
    6. 6. conflicts result froM… Each channel member wanting to pursue his own goals. Each wants to retain his independence. There are limited resources which all of them want to utilize in achieving their goals. Features of conflicts: Initially latent and does not affect the working Is not normally possible to detect till it becomes disruptive
    7. 7. conflict coMPared to coMPetition Conflict ≠ Competition Conflict > Competition conflict Direct Personal Opponent centered coMPetition Object centered Indirect Impersonal
    8. 8. Four StageS oF conFlict LATENT PERCEIVED FELT MANIFEST Each stage is progressively more severe than the earlier one.
    9. 9. StageS oF conFlictS Latent Conflict: Some amount of discord exists but does not affect the working or delivery of customer service objectives. Disagreement could be on roles, expectations, perceptions, communication. Perceived Conflict: Discords become noticeable – channel partners are aware of the opposition. Channel members take the situation in their stride and go about their normal business. No cause for worry but the opposition has to be recognized.
    10. 10. StageS oF conFlictS Felt Conflict: Reaching the stage of worry, concern and alarm. Also known as ‘affective’ conflict. Parties are trying to outsmart each other. Causes could be economical or personal. Needs to be managed effectively and not allowed to escalate. Manifest Conflict: Reflects open antagonistic behaviour of channel partners. Confrontation results. Initiatives taken are openly opposed affecting the performance of the channel system. May require outside intervention to resolve.
    11. 11. cauSeS oF channel conFlict Resource Securities Role Incongruities Perceptual Differences Expectational Differences Decision Damping Disagreements Goal Incompatibilities Communicational Difficulties
    12. 12. Vertical channel conFlict horizontal channel conFlict typeS oF channel conFlict Multi channel conFlict
    13. 13. Vertical channel conFlict
    14. 14. horizontal channel conFlict:-
    15. 15. Multi channel conFlict:Example:Online Store Like e-bay Example:Exclusive Company Outlet
    16. 16. EffEcts of channEl conflict Positive Effect Negative Effect Multiple Effects Over Different Ranges
    17. 17. Managing channEl conflict Designing the channel structure Establishing mutually agreeable and aligned business goals Effective communication Segment customers Encourage specialization Clearly define channel roles and responsibilities
    18. 18. Managing channEl conflict Develop specific channel products Checking behavioral performance
    19. 19. REsolving conflicts A 4 Stage Process Understanding nature and intensity Tracing the source of the conflict Understand the impact of the conflict Strategy and plan of action for resolution
    20. 20. conflict REsolution stylEs Avoidance Styles are a combination of assertiveness and co-operation. Aggression Accommodation Compromise Collaboration Least effort and results Maximum effort and Best results
    21. 21. avoidancE Used by weak channel members. Problem is postponed or discussion avoided. Relationships are not of much importance. As there is no serious effort on getting anything done, conflict is avoided.
    22. 22. aggREssion Also known as a competitive or selfish style. It means being concerned about one’s own goals without any thought for the others. The dominating channel partner (may be the principal) dictates terms to the others. Long term could be detrimental to the system.
    23. 23. accoMModation A situation of complete surrender. One party helps the other achieve its goals without being worried about its own goals. Emphasis is on full co-operation and flexibility in approach. May generate matching feelings in the receiver. If not handled properly, can result in exploitation.
    24. 24. Compromise Obviously both sides have to give up something to meet mid way. Can only work with small and not so serious conflicts. Used often in the earlier two stages.
    25. 25. Collaboration Also known as a problem solving approach. Tries to maximize the benefit to both parties while solving the dispute. Most ideal style of conflict resolution – a win-win approach. Requires a lot of time and effort to succeed. Sensitive information may have to be shared.
    26. 26. power in marketing Channels Power Defined: The capacity of one channel member to get another channel member to do something that he otherwise would not have done.
    27. 27. role in marketing Channels Role Defined: Set Prescriptions defining what the behavior of a position member should be.
    28. 28. CommuniCation in marketing Channels Communication Defined: Flow of information that enables channel members to send and receive messages