Sales & Distribution Management

Chapter 22: Managing Channel Conflicts

+Sources of Conflict

+Types of Conflicts

+Conflict Management Techniques

+Channel Leadership

Chapter Summary

All channels are based on the premise that anyone joining the channel and performing channel functions stands to benefit. Channel conflicts arise in channel systems when one or more channel members start perceiving the behavior and actions of another channel member as an impediment to goal attainment.

There are many sources of channel conflicts. They can originate from competing roles, clash of domains and differing perceptions of reality. Marketing channel strategies and channel structures are also important sources of conflict. Channel conflicts can be of different types. They can be primarily divided into pre-contractual and post-contractual conflicts and conflicts based on channel levels. Based on the timing of conflicts, they are divided into conflicts that arise before channel members enter into agreements and those that arise after channel members enter into agreements. Channel level conflicts may be vertical, horizontal or multi-level.

To ensure effective coordination and channel functioning, different conflict management techniques can be used. They are primarily segregated into structural and behavioral conflict resolution strategies. Some commonly used strategies include negotiation, persuasion, problem solving, co-optation, arbitration and mediation. Channel members can also resolve conflicts by exchange of personnel between channels and by association with different trade organizations.

Channel power is also frequently used as a conflict management tool. Power sources are usually effective when wielded by channel leaders. Channel leaders can use referent, expert, legitimate, coercive and reward power to minimize channel conflicts. Creative and effective channel leadership result in channel members moving towards shared goals. If this ideal situation is achieved, distribution channels will be in a better position to satisfy the demands of target customers and maximize profits of individual channel members.

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