topic 08 channel-conflict revised

7/28/2019 Topic 08 Channel-Conflict Revised

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Channel Conflict

Topic 8


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There are many ways or channels by

which information, products or services reach customers.


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From a business point of view theworld could be seen as a number of different channels to reachcustomers


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The use of the Internet as achannel to reach consumers haslead to potential channel conflict


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Example

Doc Martins

Dell

Lonely Planet
http://www.e-consultancy.com/news-blog/361726/dr-martens-launches-new-website-freedm2-com-beautiful-but-flawed.html?keywords=channel+conflicthttp://www.dell.com.au/http://www.lonelyplanet.com.au/http://www.lonelyplanet.com.au/http://www.dell.com.au/http://www.e-consultancy.com/news-blog/361726/dr-martens-launches-new-website-freedm2-com-beautiful-but-flawed.html?keywords=channel+conflict


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Who ow ns the cus tom er rel at ions h ip?

Poten t ial confu s ion w i th cu s tom ers thems elves in t erm s o f how they w ere in terac t ing w i th b us inesses .

e.g . Franc h ises


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There are synergies betweenchannels such as catalogues and

the Internet


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Catalogues, interact through the PostalService, call centres, TV etc

Companies can also set up web sites asanother channel for distributing a product


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Email is still the major channel of the Internet. Issues includeSPAM, and overfull in-baskets

Main focus today the web


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Its not a simple matter to open up thismajor new channel because it creates a lot

of questions about; well, who owns thatchannel to the consumer? Is it theupstream manufacturer?


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Types of Conflict

Direct Manufacturers launch newchannel

Internal Conflict new online competeswith existing offline

External manufacturer doesnt ownonline or offline channel leastthreatening


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Does the consumer have a relationship withthe manufacturer or the retailer?

Does selling online make sense?

Is industry as a whole moving online?

Degree of dependency or interdependency

Manufacturers market position

Strategic Factors


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Even though consumers may buy theproduct from somewhere else, theyreheading to the manufacturer if there is aproblem (or blaming the brand at least).


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There has always been a need to control acompany name and the brand namesaround its products and services

The Internet may change these things.


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Ultimately, when the Internet comes into themix, it causes conflict between thedifferent channels.

e.g. Brand name camera, laptop etc

purchased onlineExample buying your own brand.. (P&G Head and Shoulders)
http://www.clickz.com/showPage.html?page=3531421http://www.clickz.com/showPage.html?page=3531421


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Businesses have to meet the needs of theconsumer in terms of where the consumer wants to interact and when and how, andso they cant simply say; well, the Internetis just too difficult for us. Were not goingto do it.

Example: Delta and Expedia .Virgin Vs Commonwealth
http://www.delta.com/http://www.expedia.com/http://www.virginmoney.com.au/http://www.commbank.com.au/http://www.commbank.com.au/http://www.virginmoney.com.au/http://www.expedia.com/http://www.delta.com/


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Definition

Channel conflict can be defined as anysituation where two different marketing or distribution channels are competing for thesame sale with the same brand,


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Where does conflict show itself?

Pricing Order handling Delivery Service and repair Customer service Resistance to change


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Is channel conflict good?

Is channel conflict healthy or inevitable ? Levels

Vertical ( manufacturer vs. retailer ) Horizontal ( dept. store goods sold at Costco )

Sources Different goals

(e.g., build brand vs. immediate profits) Loss of sales (commissions) Mattels website
http://www.mattel.com/index.asp?f=falsehttp://www.mattel.com/index.asp?f=false


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How to manage channel conflict

1. Understand channel members interests andanticipate of conflicts

2. Set clear goal

3. Communicate your intentions clearly andprovide information and training

4. Take strategy decisions which limit conflict

Cliniques web price

Apples stores
http://www.clinique.com.au/index.tmpl?ngextredir=1http://www.apple.com/http://www.apple.com/http://www.apple.com/http://www.apple.com/http://www.clinique.com.au/index.tmpl?ngextredir=1


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Minimising Conflict

Custom er f i r s t and the channel secon d Inv olve c hann el p ar tners

Captu re value


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Conclusion

Chann el con f lic t wi l l no t g o aw ay b y i tself

Needs act iv e m an ag em en t There are m any po s i t ive exam ples tod ay

su ch as m ul t i -ch ann el s t ra teg ies

topic 08 channel-conflict revised

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