Channel Conflicts
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Transcript of Channel Conflicts
Channel Conflicts
Channel conflict occurs whenever channel members have distinctly different opinions or perceptions about distribution channel affairs. If no interdependence exists, there would be no basis for conflict. Mutual dependence creates the basis for conflict
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Types of Channel Conflict
Horizontal Conflict – Occurs amongst similar firms at the same level in a distribution channel. Intertype – Occurs amongst different
intermediaries at the same level in a channel. Differs from horizontal in that bit occurs among dissimilar institutions. Vertical - Occurs amongst different levels
within a channel of distribution.
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Causes of Channel Conflict
Goal incompatibility – Though channel members share the common goal of maximising their joint effectiveness, each is a separate legal entity. Each has its own employees, owners and
interest groups who help shape goals and strategies, some of which may not be totally compatible with those of other channel members. This incompatibility may be the underlying
cause of stress, ultimately creating conflict.
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Causes of Channel Conflict
Position, Role and Domain Incongruency –Changes in specification of position or poorly defined roles may cause conflict. Incompatibility develops within channel
arrangements as roles and methods of operation change. Conflict also arises when there is lack of
agreement concerning appropriate domain of members
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Causes of Channel Conflict
Communication BreakdownOften is the reason for channel conflict. Could occur in 2 ways:
• 1) When a firm fails to exchange vital information with other channel members.
• 2) Through noise and distortion
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Causes of Channel Conflict
Different Perceptions of Reality
Conflict occurs when different channel members differ in methods of achieving mutual goals or have different solutions to a mutual problemEven when they have a strong desire to cooperate, conflict can result from different perceptions of the facts
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Causes of Channel Conflict
Ideological Differences
it is similar to those resulting from differences in perceived roles and expected behaviours.
Can result from big-business and small-business perceptions of the appropriate role of management
Resolution of Channel Conflict
Problem Solving: Superordinate Goals:
Essentially a goal that all channel members desire but that cannot be achieved by anybody acting alone.. Development of a superordinate goal overrides individual member goals.
Communication Processes : Seeks to alleviate communication noise in distribution channels. More efficient communications in the channel will permit channel members to find solutions to their problems based on common objectives. Meetings and trade publications allow members to develop solutions to common problems and reinforce relationship
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Resolution of Channel Conflict
PersuasionEmphasis is on influencing behaviour through persuasion rather than only sharing information. Specifically, it seeks to reduce conflict about domain
NegotiationThe objective is to halt a conflict, no attempt is made to fully satisfy a channel member. Could lead to a compromise, once basic reason for stress is arrested
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Resolution of Channel Conflict
PoliticsRefers to the resolution of conflict by the involvement of new parties in the process of reaching an agreement. Solutions
1.Coalition formation 2.Mediation & Arbitration3.Lobbying & Judicial Appeal
Withdrawal If all other methods fail, then the last option for the termination of conflict is for one firm to withdraw from the relationship.
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