Assignment 1

1. What is Omni Channel Retailing? What are the challenges & solutions for Omni Channel
Retailing?
Omnichannel retailing includes offering customers with a great purchasing experience across
several retail channels, like multichannel retailing. Customers get a smooth shopping
experience whether they shop online on a desktop or mobile device or at a physical store with
omnichannel retailing. The primary goal of omnichannel retailing is to provide a consistent
consumer experience across all a retailer's channels. The secondary goal is to coordinate efforts
to gain a larger piece of the customer's wallet and so increase profitability.
Omnichannel retailers face a few key challenges to ensure success in their efforts to serve
customers efficiently and become profitable. These are:
 Uniform service delivery- Omnichannel retailers need to maintain consistent product
and service delivery across all channels, including the highest levels of customer
support. It is critical to provide consistent customer service across all channels to
maintain their loyalty. Customers' service expectations will remain same whether they
order online or offline, because according to the omnichannel the company which is
having a very good image customer always choose them.
 Inventory Planning and Integration- Inventory planning along with the appropriate
optimal stock holding strategy across channels will helps to the company in terms of
Gross Margin Returns on Inventory and Stock Turns. A well-connected merchandise
strategy for all channels will provide seamless and timely order management.
 Customer Relationship Management- Customer service management across channels
must be effective for customers to return to each channel and remain loyal to the
company. The loyalty reward management programme will allow to earn and burn in
any channel of his /her choice.
 Profitable Operations- An omnichannel retailer's development in the online and
catalogue channels will cut operating expenditures like employee costs. As a result, it is
always burdened with large operating expenses, necessitating efficiency from top-line
sales successes and operating cost reduction operations. Thus, planning gross margins
and net margins in channels is very important.
Solutions for the above challenges:
Uniform service delivery- Provide consistent customer support and close the delivery
gaps using strength of each channel.
 Inventory Planning and Integration- To enable easy and fast order management, work
on an integrated merchandise plan for all channels.
 Customer relationship management- Customer data service records should be
integrated and shared across channels.
 Profitable operations- Maintain channel-specific operating budgets and financial goals
to ensure channel profitability.
2. Define conflict & illustrate the various causes of conflict.
As per Stern and Gorman, in any social system, when a component perceives the
behavior of another component to be impeding the attainment of its goals or the
effective performance of its instrumental behavior patterns, an atmosphere of
frustration prevails. A state of conflict may, therefore, exist when two or more
components of any given system of action, e.g., a channel of distribution, become
objects of each other's frustration.
The causes of channel conflict are numerous, most of them can be categorized into one
or more of the following seven underlying causes of channel conflict:
 Role Incongruities- It defines how members of a position (such as a marketing
channel member) should behave. Each member of the marketing channel is
responsible for a specific set of responsibilities. A conflict situation may arise if
either the franchisor or the franchisee deviates from their assigned roles.
 Resource Scarcities- A disagreement amongst channel members about the
allocation of some valued resources required to achieve their different aims can
often lead to conflict. important example of resource scarcity as a cause of
conflict involves site selections in franchised channels. In this case, the resource
is the market in which franchisees operate.
 Perceptual differences- The way a person selects and interprets environmental
stimuli is referred to as perception. The manufacturer who sees POP as an
important promotional technique for moving products off store shelves. Point-
of-purchase materials, on the other hand, are frequently viewed by retailers as
unnecessary clutter that takes up valuable floor space. Hardwood flooring
maker.
 Exceptional differences- These expectations are predictions or forecasts about
how other channel members will behave in the future. Another channel member
can be prompted to respond in a way that would not have happened if the first
action had not occurred. In this way, a self-fulfilling prediction is born. Extended
warranties supplied by automakers were expected to cut future transmissions
significantly, allowing for a drop in franchise royalty costs from 9% to 5% and the
expansion of their areas.
 Decision domain disagreement- Channel members directly or indirectly carve
apart a decision-making space for themselves that they believe is solely theirs.
McDonald's, for example, has a full document detailing the franchisor's and
franchisee's respective decision-making obligations.
 Goal Incompatibilities- Every member of the marketing channel has their own
objectives. When two or more members' interests are incompatible—which
happens frequently—conflict can arise.
 Communication difficulties- Communication is the medium via which all
interactions between channel members take place, whether cooperative or
 antagonistic. A communication blunder or breakdown can rapidly change a
cooperative partnership into a tense one. Consider Alpha Graphics, a printing
services franchise with over 250 franchised locations in the United States and
abroad. Many franchisees were dissatisfied with the franchisor's support, which
they believed was insufficient.

Define Power with reference to Channel Management. What are the various Power bases / sources
of Power? Enumerate the findings of use of Power Base to achieve channel objectives.

Power is the ability of one channel member (A) to get another channel member (B) to do something
it otherwise would not have done. Power is the potential for influence. It can cause great damage
because it can force another channel to generate some value, without granting it equitable
compensation for that effort. But can also represent potential for influence, great benefits can be
achieved through its judicious use, to drive a channel toward more efficient, more coordinated
operations.

There are five sources of power

What is motivation? Explain the features of cooperative arrangement, strategic partnership,

strategic alliances & distribution programming as approaches for motivating channel members
Describe briefly any five general criteria for selecting channel members that can be used as a
starting point for developing more specialised list of channel members selection criteria.

Even if no channel architectural changes have been applied, channel selection judgments are
frequently required. Firms may require more outlets to accommodate expansion or to replace
channel members who have left. Following are the five general criteria for selecting channel
members that can be used as a starting point for developing more specialised list of channel
members selection criteria.

1. Product lines- Manufacturers were generally found to consider four aspects of the
intermediary’s product line.
(1) competitive products- Manufacturers often strive to stay away from intermediaries that sell
products that are directly competitive. Frequently, both wholesale and retail intermediates carry
products that are directly competitive.
(2) compatible products- Manufacturers prefer intermediaries who handle compatible products.
(3) complementary products- Intermediaries who carry complementary products are favoured
by manufacturers because they provide a better overall product offering to their clients.
2. Reputation- Most manufacturers would simply reject potential intermediaries with a bad
reputation in their community. Store image is an extremely important aspect of a retailer's
overall reputation for retail intermediaries.
3. Management ability- Many manufacturers believe that a potential channel member isn't worth
considering if the management isn't satisfactory. The ability of management to organise, train,
and retain salespeople is one of the most important factors of their success.
4. Size- A prospective intermediaries is sometimes rated simply based on their size. The notion is
that the greater the organisation and sales volume, the higher the manufacturer's product sales
will be. Large intermediaries are usually assumed to be more successful, profitable, well-
established, and capable of handling a wider range of products.
5. Field sales organization- Company salespeople, usually better than anyone else in the company,
are in the best position to know potential channel members. Salespeople may not be fairly
compensated for their efforts in locating potential channel members.