![Page 1: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/1.jpg)
HOW SHOULD COMPANIES INTEGRATE CHANNELS AND MANAGE CHANNEL CONFLICTS ??
![Page 2: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/2.jpg)
ADVENT OF VERTICAL MARKETING CHANNELS
CONVENTIONAL MARKETING CHANNEL : Consists of an independent producer, wholesaler(s), and retailer(s). Each is a separate business channel has no substantial control over the others .
So that’s a problem as every member is looking to maximize its own profit and is not concerned about the
system as a whole
VERTICAL MARKETING SYSTEM : By contrast, it includes the producer , wholesaler(s), and retailer(s) acting as a unified system
To solve this ,, comes the concept of :
![Page 3: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/3.jpg)
![Page 4: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/4.jpg)
CORPORATE VMS : Combines successive stages of production and distribution under single ownership
ADMINISTERED VMS: Co-ordinates successive stages of production and distribution through size and power of members .
CONTRACTUAL VMS : Independent firms at different levels of production.
3 Types of VMS are :
And then there are Independent Retailers too which have not joined any VMS
![Page 5: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/5.jpg)
Another Channel development is a HORIZINTAL MARKETING SYSTEM
![Page 6: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/6.jpg)
INTEGRATING MULTI-CHANNEL MARKETING
![Page 7: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/7.jpg)
![Page 8: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/8.jpg)
3 BENEFITS OF ADDING MORE CHANNELS FOR THE COMPANY :
1 Increased Market Coverage
Increased Customers for the company
![Page 9: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/9.jpg)
3 BENEFITS OF ADDING MORE CHANNELS FOR THE COMPANY :
2 Lower Channel Costs
![Page 10: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/10.jpg)
3 BENEFITS OF ADDING MORE CHANNELS FOR THE COMPANY :
3 More Customized Selling
Adding a Technical Sales force
![Page 11: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/11.jpg)
![Page 12: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/12.jpg)
CHANNEL CONFLICT
Channel Conflict is generated when one channel member’s action prevents other channel member to achieve its Goal
![Page 13: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/13.jpg)
![Page 14: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/14.jpg)
1. HORIZONTAL CHANNEL CONFLICT : Occurs between channel members at the same level .
Some Pizza Inn franchisees complained about other cheating on ingredients, providing poor services and hurting the overall brand image .
2. VERTICAL CHANNEL CONFLICT : Occurs between different level s of channels.
Walmart is the buyer for many manufacturers and is able to command reduced prices or quantity discounts from these & other suppliers.
2. MULTI CHANNEL CONFLICT :When two or more channels sell to the same market.
Big Bazaar boycotted Cadbury and Kellogs due to the price issues.
![Page 15: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/15.jpg)
But why do we have a Channel Conflict
CAUSES Goal Incompatibility Unclear Roles & Rights Differences in perceptionIntermediaries’ dependence on manufacturer
![Page 16: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/16.jpg)
![Page 17: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/17.jpg)
STRATEGIC JUSTIFICATION : Developing special versions of products for different channel members –Branded variants .
DUAL COMPENSATION : Dual Compensation pays existing channels for sales made through new channels
SUPERORDINATE GOALS: Channel members can come to an agreement on the fundamental or sub-ordinate goal that they are jointly seeking .
EMPLOYEE EXCHANGE : To exchange persons between two or more channel members.
JOINT MEMBERSHIPS : Marketers can encourage joint memberships in trade associations.
CO-OPTATIONS : Is an effort by an organization to win the support of the leaders of another by including them in advisory councils , Board of Directors , and the like. .
![Page 18: How should companies integrate channels and manage channel conflict](https://reader033.vdocuments.us/reader033/viewer/2022061322/55cb8deebb61eb51728b466d/html5/thumbnails/18.jpg)
These slides were Created by Jalaj Garg, IIT Guwahati, during a Marketing internship by Prof. Sameer Mathur, IIM Lucknow. ( see www.IIMInternship.com)