Friday, May 29, 2009

Week 9 Channel Conflict

1.From a business point of view the world could be seen as a number of different channels to reach customers.The use of the Internet as a channel to reach consumers has lead to potential channel conflict.

2.Definition of Channel Conflict:
Channel conflict occurs when manufacturers (or usually the brand owner) disintermediate their channel partners, such as distributors, retailers, dealers, and sales representatives, by selling their products direct to consumers through general marketing methods and/or over the internet through eCommerce. This is happening all the time now and businesses will need to develop strategies to cope with it. Channel conflict can be defined as 'any situation where two different marketing or distribution channels are competing for the same sale with the same brand'.

3.Types of Conflict:

(1)Direct – Manufacturers launch new channel
(2)Internal Conflict – new online competes with existing offline
(3)External – manufacturer doesn’t own online or offline channel-least threatening

4.Where does conflict show itself?

(1)Pricing
(2)Order handling
(3)Delivery
(4)Service and repair
(5)Customer service
(6)Resistance to change

5.Manage channel conflict:

(1)Understand channel members interests and anticipate of conflicts

(2)Set clear goal

(3)Communicate your intentions clearly and provide information and training

(4)Take strategy decisions which limit conflict

6.Conclusion:

(1)Channel conflict will not go away by itself
(2)Needs active management
(3)There are many positive examples today such as multi‑channel strategies

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