Understanding Causes of Channel Conflict



Explain : Causes of Channel Conflict

Role Ambiguity: The uncertain act of an intermediary in a multi-channel arrangement may lead to disturbance in the channel of distribution and cause conflict among the intermediaries.

Incompatible Goals: When the manufacturer and the intermediaries do not share the same objectives, both work in different directions to meet their ends, this results in channel conflict.

Marketing or Strategic Mis-Alignment: Sometimes, two-channel partners promote the manufacturer’s product in a different manner, which created two different images of the same product in the consumers’ mindset, which creates conflicting brand perception.

Difference in Market Perception: The manufacturer’s understanding of the potential market and penetration into a specific region or territory, may vary from the perception of the intermediaries, which can create conflict and reduce the intermediary’s interest in capturing that particular market.

Change Resistant: When the channel leader plans to modify the distribution channel, the intermediaries may or may not accept this change. Thus, it may result in a condition of discord or non-cooperation.

Improper Geographic or Demographic Distribution: If the sales territory has a narrow consumer base, and the channel leader allows many selling partners, they tend to lose interest soon because of low profit and limited sales.

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