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    Channel Management: Conflicts Resolution

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    Vikas
    This document discusses channel management and resolving conflicts within marketing channels. It is presented in three broad phases: using power bases to motivate channel partners, identifying and resolving channel conflicts, and coordinating the channel. Channel conflicts can arise from different goals, perceptions, or understandings of responsibilities. The document outlines styles for resolving conflicts, including avoidance, aggression, accommodation, compromise, and collaboration. It also discusses developing effective channel policies to guide operations.

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    Channel Management: Conflicts Resolution

    Uploaded by

    Vikas
    132 views31 pages
    This document discusses channel management and resolving conflicts within marketing channels. It is presented in three broad phases: using power bases to motivate channel partners, identifying and resolving channel conflicts, and coordinating the channel. Channel conflicts can arise from different goals, perceptions, or understandings of responsibilities. The document outlines styles for resolving conflicts, including avoidance, aggression, accommodation, compromise, and collaboration. It also discusses developing effective channel policies to guide operations.

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    Channel Management

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    This document discusses channel management and resolving conflicts within marketing channels. It is presented in three broad phases: using power bases to motivate channel partners, identifying and resolving channel conflicts, and coordinating the channel. Channel conflicts can arise from different goals, perceptions, or understandings of responsibilities. The document outlines styles for resolving conflicts, including avoidance, aggression, accommodation, compromise, and collaboration. It also discusses developing effective channel policies to guide operations.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    132 views31 pages

    Channel Management: Conflicts Resolution

    Uploaded by

    Vikas
    This document discusses channel management and resolving conflicts within marketing channels. It is presented in three broad phases: using power bases to motivate channel partners, identifying and resolving channel conflicts, and coordinating the channel. Channel conflicts can arise from different goals, perceptions, or understandings of responsibilities. The document outlines styles for resolving conflicts, including avoidance, aggression, accommodation, compromise, and collaboration. It also discusses developing effective channel policies to guide operations.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 31

    Channel Management

    CONFLICTS RESOLUTION
    Learning Objectives
    2

    Understand how and why channel conflicts


    occur
    Look at ways of managing conflict
    Channel practices followed to resolve conflicts
    Principles of channel management
    Various parameters on channel policy
    Way in which services use marketing
    channels
    Channel Management
    3

    Is in three broad phases:


     Use of power bases
     Identifying and resolving channel conflicts
     Channel co-ordination

    Use of power….
    Use of Power
    4 Bases
    Channel system has a set of players:
     Not equally motivated to implement the ideal channel
    design
     Whose expectations from the system differ

    Use of the 5 power bases brings diverse channel


    partners in line for effective implementation
     5 power bases are: reward, coercion, legitimate,
    expert and referent (French & Raven)
     Two more power bases in the Indian context are
    support and competition
    Use of Channel
    5 Power
    Channel members are dependent on each other.
    The power equations between them keep them
    working together.
    There are basically 5 types of power bases –
    reward, coercion, expert, reference and legitimacy.
    2 more can be considered as support and
    competition.
    Extent of dependence defines the power base
    which is appropriate.
    French & Raven

    “Power” of 6Motivation
    Reward – incentives for good performance
    Coercion – threat of punishment for non-
    performance
    Referent – benefit of sheer association with a
    strong company
    Legitimate – arising out of a contract
    Expert – specialized knowledge
    Support – additional benefits for better
    performers only
    Competition – created between channel partners

    Countervailing power……
    Countervailing Power
    7

    Balances the power exerted by one channel


    member. It is not a one-sided equation.
    Both the channel member and the principal can
    have influence on each other.
    Results from interdependence within the channel
    system.
     Company exerts power on the distributor to get its
    coverage and revenues
     Distributor has enough influence on his customers and
    Examples

    this is critical for the company also


     Weaker partners do get exploited – ancillary units

    Co-ordination…
    Channel Co-ordination
    8

    Channel system is well co-ordinated if each


    member understands his role correctly and
    performs it to help the system achieve its customer
    service objectives.
    In a co-ordinated channel:
    Interests of all channel members are protected
     Actions of all are in line with overall objectives
     Flows are streamlined to desired customer service
    objectives
    Channel co-ordination is an on-going effort

    Conflict….
    Channel 9Conflicts
    Conflict is generated when actions of any
    channel member come in the way of the
    system achieving its objectives
    Three broad categories of channel conflict are:
     Goal conflict – understanding of objectives by
    various channel members is different
     Domain conflict – understand responsibilities and
    authority differently
     Perception conflict – reading of the market place is
    different and proposed actions vary
    Channel10Conflict

    CONFLICT

    GOAL DOMAIN PERCEPTION


    Channel11Conflict
    Situation of discord or disagreement between
    partners in the same channel system – has
    negative connotations and is driven more by
    feelings than facts
    Conflict is part of any social system – getting
    disparate entities to work together as in a channel
    system is also one such social unit
    If any member feels that another is working in a
    manner as to affect him, conflict results
    Conflicts Result
    12 From…
    Each channel member wanting to pursue his own
    goals
    Each wants to retain his independence
    There are limited resources which all of them want
    to utilise in achieving their goals
    Features of conflicts:
     Initially latent and does not affect the working
     Is not normally possible to detect till it becomes
    disruptive

    Four stages….
    Four Stages
    13

    LATENT

    PERCEIVED

    FELT

    MANIFEST

    Each stage is progressively more severe than the earlier one


    Types of Conflicts
    Latent Conflict: 14

     Some amount of discord exists but does not affect the


    working or delivery of customer service objectives.
     Disagreement could be on roles, expectations,
    perceptions, communication.
    Perceived Conflict:
     Discords become noticeable – channel partners are aware
    of the opposition.
     Channel members take the situation in their stride and go
    about their normal business
     No cause for worry but the opposition has to be recognized
    Types of Conflicts
    Felt Conflict: 15

     Reaching the stage of worry, concern and alarm. Also known


    as ‘affective’ conflict.
     Parties are trying to outsmart each other.
     Causes could be economical or personal
     Needs to be managed effectively and not allowed to escalate.

    Manifest Conflict:
     Reflects open antagonistic behaviour of channel partners.
    Confrontation results.
     Initiatives taken are openly opposed affecting the
    performance of the channel system.
     May require outside intervention to resolve
    Reasons for Channel
    16 Conflict
    Roles not defined properly
    Allocation of scarce resources between
    members seem unfair to some
    Differences in perception of the business
    environment
    Reasons for Channel
    17 Conflict

    Future expectations not likely to materialize


    Decision domain disagreements – who has to
    decide on what (key account pricing)
    Channel members do not agree on objectives
    Misunderstanding or mis-interpretation of
    routine business communication

    Resolving….
    Resolving Conflicts
    18

    A 4 Stage Process
    Understanding nature and intensity

    Tracing the source of the conflict

    Understand the impact of the conflict

    Strategy and plan of action for resolution


    Conflict Resolution
    19
    Styles
    Avoidance Styles are a combination
    of assertiveness and
    Aggression co-operation.

    Accommodation

    Compromise

    Collaboration

    Least effort and Maximum effort and


    results Best results

    Kenneth W Thomas
    Avoidance
    20

    Used by weak channel members.


    Problem is postponed or discussion avoided.
    Relationships are not of much importance.
    As there is no serious effort on getting anything
    done, conflict is avoided.
    Aggression
    21

    Also known as a competitive or selfish style.


    It means being concerned about one’s own goals
    without any thought for the others.
    The dominating channel partner (may be the
    principal) dictates terms to the others. Long term
    could be detrimental to the system.
    Accommodation
    22

    A situation of complete surrender.


    One party helps the other achieve its goals without
    being worried about its own goals.
    Emphasis is on full co-operation and flexibility in
    approach. May generate matching feelings in the
    receiver.
    If not handled properly, can result in exploitation
    Compromise
    23

    Obviously both sides have to give up something to


    meet mid way.
    Can only work with small and not so serious
    conflicts.
    Used often in the earlier two stages.
    Collaboration
    24

    Also known as a problem solving approach


    Tries to maximize the benefit to both parties while
    solving the dispute.
    Most ideal style of conflict resolution – a win-win
    approach
    Requires a lot of time and effort to succeed.
    Sensitive information may have to be shared
    Channel25Policies
    Defines how the channel is required to operate.
    Normally framed by the channel principal to guide
    the operations of the channel system
    If not framed properly could prove the starting
    point of channel conflicts.
    Some subjects of channel policies could be as seen
    in the next slide:
    Channel26Policies
    Markets to be covered
    Customer coverage
    Pricing
    Product portfolio to be handled
    Selection, termination of channel members
    Ownership of the channel
    The Services
    27 Sector
    Twice the size of the manufacturing sector
    Services offered are to be in line with customer
    demand
    Services have to be presented in an appealing
    manner to sustain customers.
    Needs specialized channels which understand the
    characteristics of service delivery
    5 Characteristics
    28
    of Services
    They are intangible – can only be felt. No visual
    features like size, style.
    They are inseparable from their service providers –
    a 3P cannot deliver
    They cannot be standardized – custom made and
    delivered
    Customers are involved to a great degree – define
    the services
    They are perishable – cannot be stored for delivery
    later. Salvage value of an unsold service is zero.
    Channels Used
    29

    Shorter channels than for products


    Some channels used are:
    Direct from service provider to user
     Agents or brokers to bring buyer and seller together

     Franchisees or contractors
     Electronic channels

    High degree of customization is provided


    Key Learnings
    30
     Channel management is done by: use of power bases,
    identifying and resolving channel conflicts and co-
    ordination
     Channel conflicts could occur due to: goal conflicts,
    domain conflicts and perception conflicts
     Channel conflicts pass thru’ the 4 stages of latent,
    perceived, felt and manifest.
     Conflicts are avoided with the use of power bases of
    rewards, coercion, expertise, legitimacy and reference.
     There are 5 styles of conflict resolution: avoidance,
    aggression, accommodation, compromise and
    collaboration
    Key Learnings
    31
     Channel conflicts are resolved by joint membership of
    associations, exchanging personnel or arbitration
     Channel management involves the four steps of
    planning, organisation structure, control of the
    channels and measuring performance for continuous
    improvement
     Services are distinguished by 5 characteristics of being
    intangible, inseparable from service providers, cannot
    be standardised, customers are involved in service
    delivery and are perishable. Distribution channels
    should take these into account.

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