Resolving channel conflict (MC, unit 5)

Manage through proactive strategies that focus on STRENGTH OF RELATIONSHIPS & MARKETING COMMUNICATIONS

1) Strength of relationships
Building

• Trust - confidence in member's reliability, integrity and predictability
• Commitment - the desire to continue and maintain a valued relationship

(Morgan & Hunt '94) developing a set of shared values reduces costs and increases profitability due to customer retention

2) Marketing communications

Communications in a marketing channel is part of a PUSH strategy.

Advantages:

• Stimulates demand by encouraging partners to take & sell stock
• Opps to reward, train and motivate channel members to develop relationships and become product advocates
• Create stock availability
• Reduces overall promotion costs, not just a heavy consumer push

Disadvantages:

• Danger of deviance and conflicting messages
• Could be expensive if there are a large range of distributors
• Too much channel availability may damage perceptions of quality or exclusiveness

Timing Simultaneous is cheaper, little deviation, little time elapse.
Intermediaries may not be targeted strictly sequentially. More likely to prioritise (grade A wholesalers, then B, then C). Potential problems: message deviance & cost of repetition.

Propensity to share information
Fostered by web (fast, accurate, low-cost information exchanges). May differ between orgs.

Also think about: power (is it distributed evenly in the channel?), direction (one/two-way), frequency, style & content, common attitudes