Part 3: Channel Implementation Chapter 7: Managing Conflict to Increase Channel Coordination - PowerPoint PPT Presentation

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Part 3: Channel Implementation Chapter 7: Managing Conflict to Increase Channel Coordination

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Damage to the Channel. High levels of manifest conflict damage ... May be an intended channel. Fueling Conflict. Conflict creates more conflict. Bad history ... – PowerPoint PPT presentation

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Title: Part 3: Channel Implementation Chapter 7: Managing Conflict to Increase Channel Coordination


1
Part 3 Channel ImplementationChapter 7
Managing Conflict to Increase Channel Coordination
  • MKTG 406 Pimentel

2
Channel Conflict
  • Opposition between channel members
  • Incompatibility
  • Normal state in a channel
  • Levels of conflict
  • Latent conflict
  • Perceived conflict
  • Felt or affective conflict
  • Manifest conflict
  • A process

3
Levels of Conflict
  • Latent conflict
  • Perceived conflict
  • Felt or affective conflict
  • Manifest conflict

4
Measuring Conflict
  • Four step process
  • Issues
  • Importance
  • Frequency of disagreement
  • Intensity of dispute
  • Conflict ?Importancei x Frequencyi x Intensityi

5
Measuring Conflict Example
6
Damage to the Channel
  • High levels of manifest conflict damage long-term
    relationships in the channel
  • Conflict leads to
  • Decreased economic satisfaction
  • Decreased non-economic satisfaction
  • Loss of trust
  • Reduced commitment
  • Coalitions

7
Sources of Conflict
  • Goal conflict
  • Perceptual conflict
  • Domain conflict

8
Goal Conflict
9
Perceptual Conflict
  • Differing perceptions at even very basic levels
  • Inaccurate expectations of actions of the other
  • Different focus
  • Manufacturer own processes and product
  • Reseller own processes and customers
  • Lack of communication
  • Different cultures

10
Domain Conflict
  • Responsibility for flows and functions
  • Market domains
  • Intrachannel conflict

11
Domain Conflict
  • Market domains (cont.)
  • Multiple channels
  • Now very common
  • Heightened competition
  • Fragmented markets
  • Technology allows management of more channels
  • Suppliers like multiple channels
  • Customers like multiple channels
  • Resellers dont like multiple channels
  • Free-riding
  • Customers do not stay within their intended
    channels

12
Gray Markets
  • Selling authorized goods through an unauthorized
    channel
  • Occur when
  • Differential pricing to different channel members
  • Pricing differently to different geographic
    markets
  • Effects
  • Manufacturer cannot effectively sell at different
    prices in different markets
  • Erodes potential volume for authorized dealers
    who may also provide after-sales service

13
Gray Markets
  • Growing quickly
  • Often tolerated
  • Violations difficult to detect
  • Gray markets sometimes give more category
    exclusivity
  • Costs of taking action against gray markets often
    more than the benefits
  • Manufacturer gets greater market coverage
  • May be an intended channel

14
Fueling Conflict
  • Conflict creates more conflict
  • Bad history
  • Threats

15
Conflict Resolution Strategies
  • Institutional mechanisms to contain conflict
  • Resolving manifest conflict

16
Institutionalized Mechanisms to Contain Conflict
  • Information-intensive mechanisms
  • Share information
  • Risky and expensive
  • Joint membership in trade associations
  • Co-optation
  • Personnel exchange

17
Institutionalized Mechanisms to Contain Conflict
  • Third-party mechanisms
  • Mediation
  • Arbitration
  • Sequencing
  • Mediation-arbitration
  • Arbitration-mediation

18
Institutionalized Mechanisms to Contain Conflict
  • Building relational norms
  • Develop over time
  • Flexibility
  • Information exchange
  • Solidarity

19
Conflict Resolution Styles
High Cooperativeness
Collaboration or Problem Solving
Accommodation
Compromise
High Assertiveness
Low Assertiveness
Avoidance
Competition or Aggression
Low Cooperativeness
20
Conflict Resolution Via Incentives
  • Economic incentives
  • Effective
  • The package of factors that collectively create
    financial returns for the channel member

21
Key Terms
  • Channel conflict
  • Latent conflict
  • Perceived conflict
  • Felt or affective conflict
  • Goal conflict
  • Domain conflict
  • Perceptual conflict
  • Gray market
  • Co-optation
  • Mediation
  • Arbitration
  • Sequencing
  • Mediation-arbitration
  • Arbitration-mediation
  • Relational norms
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