MANAGING CONFLICT TO Sheenam

Neha
INCREASE CHANNEL Jagmohan
Sompal
COORDINATION Deepa

MANUFACTURERS RETAILERS

Distribution Management – Prof. RakeshSuri

 WHAT IS CONFLICT?

 A process that begins when one party perceives

that another party has negatively affected or is
about to negatively affect something that the first
party cares about.

CHANNEL CONFLICT
 Arises when the behaviour of a channel
member is in opposition to its counterpart.
 It is opponent centered and direct ,
in which the goal or object sought is
controlled by the counterpart.
TYPES OF CONFLICTS

Latent conflict
• Is the norm on the marketing channel.
• Channel members collide as all parties pursue separate goals,
strive to retain their autonomy .

Perceived Conflict
• Occurs when the channel member senses that some sort of opposition
exists
• Is cognitive , emotionless and mental

Felt Conflict
• When emotions are involved it is Felt conflict – conflictual .
• Member feels a negative emotions

Manifest Conflict
• Usually appears as blocking each others initiative and withdrawing
support.
• One tries to sabotage the other or take revenge
 MEASURING CONFLICT

 Steps in measuring the conflict

 Step 1 : Counting up the issues

 Step 2 : Importance
 Step 3 : Frequency of Disagreement
 Step 4 : Intensity of dispute

 Conflict = Importance i X Frequency i X Intensity i

CONFLICT

 Example
 Difference of opinion rarely occurs . – Low Frequency
 The issue is petty. – Low importance
 Two parties are not very far apart on the issue.- Low Intensity
 CONSEQUENCES OF CONFLICT

 Functional conflict: supports the goals of the group and

improves its performance

 Dysfunctional conflict: Hinders group performance

 FUNCTIONAL VS DYSFUNCTIONAL

 Conflict is usually thought to be dysfunctional, to hurt a

relationship

 Conflict in some cases makes a relationship better on sertain

occasions; this is functional conflict.

 Functional conflict is common when channel members

recognize each other’s contribution and understand that each
party’s success depends on the other.
 FUNCTIONAL VS DYSFUNCTIONAL

 The opposition leads them to:

 Communicate more frequently and effectively
 Establish outlets for expressing their grievances
 Critically review past actions
 Devise and implement a more equitable split of system resources
 Develop more balanced distribution of power in their relationship
 Develop standardized ways to deal with future conflict and keep it
within bounds

 Procter & Gamble Challenges French Whole Pricing Practices

MAJOR SOURCES OF
CONFLICTS
 MAJOR SOURCES OF CONFLICT

1. Channel member GOALS

2. Their perceptions of REALITY

3. Their clashes over DOMAINS

 COMPETING GOALS

 Each channel members goals & objectives are different from

those of other members.

 Goal Divergence & Subsequent Conflict.

 FINANCIAL GOALS

 Supplier:
“You don’t put enough effort behind my brand. Your prices are
too high.”

 Reseller:
“you don’t support me enough. With your wholesale prices, we
can’t make money.”
 DESIRED TARGET ACCOUNTS

 Supplier:
“We need more coverage & more effort. Our reseller doesn’t do
enough for us.”

 Reseller:
“You don’t respect my marketing strategies. We need to make
money too.”
 DESIRED PRODUCTS

 Supplier:
“You carry too many lines. You don’t give us enough attention.
You are disloyal.”

 Reseller:
“Our customers come first. If we satisfy our customers, you will
benefit.”
 DIFFERING PERCEPTIONS OF REALITY

 Indicate different bases of action in response to the same

situation.

 Channel members are often confident that they know

“The FACT of the Situation”
 PERCEPTIONS DIFFER

1. What the attributes of the products & service are

2. What applications it serves and for which segments

3. What the competition is

 FOCUS ON

 Supplier:
Product and process.
Removed from customers.

 Reseller:
Functions and customers.
Removed from manufacturer.
 PROBLEM

Cross Cultural Channel

Clashes
 SOLUTION

1. Communication

2. Develop greater sensitivity to the business culture of other

channel member
 CLASHES OVER DOMAINS

Each channel member has its own domain or sphere function.

Conflict occurs when one channel member perceives that other
is not taking proper care of its responsibilities in its appropriate
domain.
 ISSUES:

 Doing the job wrong

 Not doing the job at all

 Trying to do the other channel member’s job

 AGAIN SUPPLIER & RESELLER CLASH
 Who should do it

 How it should be done

 How it should be compensated

 CLASH OF MARKETS DOMAINS

 INTRACHANNEL COMPETITION
 Retailer selling products of competitors along side the product of the
supplier
 Supplier using multiple channel for selling product

 MULTIPLE CHANNELS : NO LONGER UNUSUAL

 Supplier uses multiple channel for market penetration
 To provide convenience for the customer to choose Eg: e-commerce,
direct sales, Teleshopping
 Retailer losses motivation
IS IT REALLY A
PROBLEM ?
 WHAT SUPPLIER CAN DO?

 Sell products under different brand names in different channels

 Sell the main product through one channel and the accessories
through another channel

 Different pricing.

 Different product.

 Different name.

 Domain conflict in marketing channel(financial services).

 Perceptual differences (coke)

 GRAY MARKETS

 Gray marketing is the sale of authorized branded product

through unauthorized distribution channels – usually bargain
or discount outlets that provides less customer service than
authorized dealers do

 Gray marketing can be contrasted with black marketing, or

counterfeiting, which involves selling fake goods as branded
ones

 Counterfeiting remains illegal in almost all world markets; in

contrast, gray marketing is in many cases completely legal
 GRAY MARKETS

 Who is supplying these unauthorized outlets?

 Authorized distributors and dealers, often in other markets

 Professional arbitragers, which include
 Import – Export houses
 Individual, professional traders, who but huge amounts at retail where
prices are low, then transport them to where the prices are high. Often,
these people live near borders of states/country
 The supplier itself, through foreign division
 FUELING CONFLICT

Conflict Begets More Conflict

 An excellent predictor of much channel members will dispute

in the future is how much conflict they have experienced in
the past.
 Conflict creates more conflicts.
 It proliferates is that once a relationship has experienced
high levels of tension and frustration, the players find it
difficult to set their acrimonious history aside and move on.
 Foundations of trust are thoroughly eroded by high levels of
conflict.
 Field experienced indicates that high and sustained conflict
once experienced is extremely difficult to overcome
 THREATS

 Highly effective and reliable way to increase channel conflict

is to threaten a channel conflict member .e.g., punshisment
or negative sanctions will be applied.
 Strategy of repeated threats raises the temperature of a
relationship by increasing conflict and by reducing the
channel members satisfaction with every aspect of
relationship.
 Threats are perceived as coercion that eventually move the
threatened firm’s sense of conflict into zone of tension
,frustration and collision.
  CONFLICT
RESOLUTION
STRATEGIES

HOW DRIVE CONFLICT &

SHAPE CHANNEL
PERFORMANCE ?
 WHAT IS CONFLICT MANAGEMENT?

The use of resolution and stimulation

techniques to achieve the desired level of
conflict.

12/07/2021 30
 CHANNEL CONFLICT

Conflict Resolution Strategies

 Information Intensive Mechanisms

 Third party mechanisms, Mediators and Arbitrators
 Building relational norms
 INSTITUTIONALIZED MECHANISMS

 INFORMATION INTENSIVE MECHANISM

 This mehcanism is designed to head off conflict by way to
share information. It is risky and expensive .each party side
risks divulging sensitive information and must devote
resources to communication.
 Trust and cooperation are helpful conditions because they
keep conflict manageable.
 These mechanism includes joint memberships in trade
association ,and exchange of personnel programs.
 INSTITUTIONALIZED MECHANISMS

 THIRD PARTY MECHANISM

 Mediator: A neutral third party who facilitates a negotiated solution
by using reasoning, persuasion and suggestions for alternatives

 Arbitrator: A third party who has the authority to dictate an

agreement

 Conciliator: A third party who provides an informal communication

link between the negotiator and the opponent

 Consultant: A third party skilled in conflict management who

attempts to facilitate creative problem solving through
communication and analysis
 BUILDING RELATIONAL NORMS

• Channel members expect each other to

Flexibility adapt readily to changing circumstance with
a minimum of obstruction and negotiation.

Information • Channel members expect each other to

share any and all pertinent information –no
exchange matter how sensitive .

Solidariaty • Channel expect each other to work for

mutual benefit ,not merely one sided benefit.
 HANDLING CONFLICT

 Competing: Satisfying one’s own interest regardless of the

impact on the other party to the conflict

 Collaborating: A situation in which the parties to the conflict

each desire to satisfy fully the concerns of all parties

 Accommodating: The willingness of one party in a conflict to

place the opponent’s interests above his or her own

 Compromising: A situation in which each party to a conflict is

willing to give up something

 Avoiding: The desire to withdraw from or suppress a conflict

12/07/2021 35
THANK YOU