Conflict in marketing channels

Conflict in marketing channels - 1 Marketing Channel...

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Marketing Channel Conflict Conflict in marketing channels, which has been the focus of numerous channel investigations, refers to goal-impeding behavior by one or more channel members. Channel conflict occurs when manufacturers (brands) disinter mediate 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. When the behavior of a channel member is in opposition to its counterpart channel conflict arises. When one channel member takes actions that another channel participant believes will reduce its ability to achieve its objectives, conflict is present. As conflict can have an adverse effect on channel member performance, channel managers must make conscious efforts to detect and resolve it. Identifying Channel Conflict One thing that managers must face is that conflict will always exist to some degree. To eliminate it totally would diminish business opportunities. In other words, in order for a company to grow their business, there must be some conflict. The key is recognizing when it becomes counterproductive. An obvious sign that your company has taken a misstep is when sales staff and business partners begin leaving. Another less identifiable sign is when the customer actually becomes aware of the conflict. “The bottom line for a company is how to manage the customer relationships with its production strategies,” (McDonald 1999). We can consider the Gibson Guitar Company. In 1997, they learned about channel conflict the hard way by offering their guitars for sale on their website at 10 percent below list price. Dealers became irate, and the
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This note was uploaded on 06/10/2010 for the course BBA mkt 450 taught by Professor Mzr during the Spring '10 term at North South University.

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Conflict in marketing channels - 1 Marketing Channel...

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