Post Graduate Programme in Management

Batch: 2021- 2023

Name of the Course: Sales and Distribution Management

Term: V

Title of Submission:

Case Analysis of
HITEVISION’S CHANNEL CONFLICT MANAGEMENT

Team 6

Name Roll Number

Payal Kharatmol 2101242

Aleena Khilji 2101145

Savi Jain 2101047

Mohit Verma 2101100

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Q1. What types of conflicts are evident in the channels of Hite Vision in 2019? Discuss
their nature and cause. Are these conflicts different from the ones faced in the earlier
period? If yes, how?
Ans: The company encountered many channel conflicts resolved in 2018 using a dual brand
strategy, but in 2019, Hitevision faced new sales channel conflicts. Moreover, the conflicts
were different from the previous conflicts, which can be seen from the following case
citations:

 Here in the case, we can see that there are two types of conflicts prominently seen:
a. New sales channel conflict:
 Case citation:
 Hitevision decided to expand by entering the commercial IFPD market. It started
preparing for IPO (initial public offering) in 2015 and thereby realized that the
domestic educational multimedia gradually became saturated, and the competition
intensified. This is where Wang decided to develop a product strategy for exploring
the commercial IFPD market. They had to redesign and produce a product, especially
for the commercial market. 
 As soon as it was launched, it encountered a series of conflicts. The engineering
projector channel encountered a dead end. The distributors lacked funds to purchase
the commercial IFPD in bulk, which was not subjected to only a few distributors;
instead, many started to avoid purchasing from Hitevision. Wang took specific
measures like conducting monthly distributor meetings and monthly sharing of
successful sales cases; however, this was not successful as the distributors felt they
were forced to do so and were unhappy and uninterested. 
 The distributors did not have experience selling IFPD , and they felt that the market
for the same was not large enough to be developed and sold.
 As a result, they had to invest their valuable resources in establishing new sales
channels, which involved high operating costs causing considerable losses.
 
b. Educational IFPD vs. Commercial IFPD:
 Case citation:
 There were few significant differences between the education IFPD and commercial
IFPD, and many educational channel distributors sold the educational model to
commercial customers. The educational distributors believed that their target market
also included commercial customers. The educational distributors had considerable
sales in the educational market, and they could purchase the educational model at a
lower price. 
 This eventually undercut their commercial counterpart and ended up interfering with
the business of commercial IFPDs.
 Wang took measures for this as well, but they were ineffective and time-consuming.
He then arbitrated the conflicts, but this was again ineffective, and the educational
distributors moved underground. Many commercial IFPD distributors stopped
cooperating with Hitevision and chose to cooperate with competitors.
 They decided to sell it under another brand name, Newline, to achieve differentiation-
a dual brand strategy.
 
c. Lamoro breached the contract:
 Case citation:
 Lamoro breached the contract after six months and refused to purchase the
contractually agreed ¥5 million, which increased the inventory of IFPDs due to poor
sales.

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  Their cooperation ended at the end of 2018 due to incompatibilities between sales
methods. Hitevision repurchased the commercial IFPD and had to sell at a reduced
price. 
 
d. New channel conflicts: (multi-level channel conflict)
 Case citation:
 Hitevision had established an e-business department to assist offline channels, but it
became a stumbling block preventing offline distributors from doing business.
 The newly established e-business department at Hitevision set prices on well-known
Chinese inline trading platforms like TMall and JD.com, which were low. 
 The customers chose online platforms to buy IFPD instead of distributors. 

3
 The company had encountered a lot of channel conflicts which were resolved in 2018 using a dual
brand strategy but again in 2019 Hitevision faced new sales channel conflicts. Moreover, the conflicts
were different from the previous conflicts which can be seen from following case citations:

Here in the case, we can see that there are two types of conflicts prominently seen:
a. New sales channel conflict:
 Case citation:
 Hite vision decided to expand by entering commercial IFPD market. It started to prepare for
IPO (initial public offering) in 2015 and thereby it realized that the domestic educational
multimedia gradually became saturated and the competition was intensifying. This is where
Wang decided to come up with a product strategy for exploring commercial IFPD market.
They had to redesign and produce a product especially for commercial market.
 As soon as it was launched it encountered a series of conflicts. The engineering projector
channel encountered a dead end. The distributors lacked funds to purchase the commercial
IFPD in bulk and this was not subjected to only a few distributors but instead many of them
started to avoid purchasing from Hitevision. Wang took certain measures like conducting
monthly distributor meetings and monthly sharing of successful sales cases however, this
was not successful as the distributors felt they were forced to do so and were unhappy and
uninterested.
 The distributors did not have an experience in selling IFPD and they felt that market for the
same was not large enough to be developed and sold.

4
  As a result of this they had to invest their valuable resources in establishing new sales
channels which involved high operating costs causing considerable losses.

b. Educational IFPD vs Commercial IFPD:

 Case citation:
 There were few significant differences between the education IFPD and commercial IFPD,
many educational channel distributors sold the educational model to the commercial
customers. The educational distributors believed that their target market also included
commercial customers. The educational distributors had a considerable scale of sales in
educational market, they could purchase the educational model at a lower price.
 This eventually undercut their commercial counterpart and ended up interfering with business
of commercial IFPDs.
 Wang took measures for this as well but they were ineffective and time consuming. He then
arbitrated the conflicts but this was again ineffective and the educational distributors moved
underground. Many commercial IFPD distributors stopped co-operating with Hitevision and
chose to co-operate with competitors instead.
 They decided to sell it under another brand name Newline to achieve differentiation- dual
brand strategy.

c. Lamoro breached the contract:

 Case citation:
 Lamoro breached the contract after 6 months and refused to purchase the contractually
agreed ¥5 million which increased the inventory of IFPDs due to poor sales.
 Their co-operation ended at the end of 2018 due to incompatibilities between sales methods.
Hitevision repurchased the commercial IFPD and had to sell at a reduced price.

d. New channel conflicts: (multi-level channel conflict)

 Case citation:
 Hitevision had established e-business department to assist offline channels but it instead
became a stumbling block that prevented offline distributors from doing business.
 The newly established e-business department at Hitevision set prices on well-known Chinese
inline trading platforms like TMall and JD.com which were low.
 The customers chose online platforms to buy IFPD instead of buying from the distributors.

Q 2. How should Wang resolve the conflict to further expand Hite Vision’s sales across channels?