1. การจัดการช่องทางการจัดจำหน่าย Distribution Channel Management
Chapter 7
Managing Conflict
To Increase Channel Coordination

2. Chapter 7 Outlines Learning Objectives
Distinguish circumstances where conflict is not negative
Understand how to diagnose conflict in terms of
issues, frequency, intensity and importance
Understand three major sources of conflict: goals,
perceptions, and domains
Understand why multiple channels have become the
norm and describe ways to address the conflict
- What is Gray Marketing and how it actually happens?

3. Managing Channel Conflict
Points of Discussion
What is Channel Conflict?
What are the effects of conflict, both for short and
long term?
How does conflict arise and how can it be managed?
- What are the best strategies for containing destructive
and excessive conflict?
- Learn strategies of resolving the conflict
- Categorize conflict resolution styles and describe
their effect

4. Managing Channel Conflict
The Meaning:-
“Channel conflict is behavior by a channel member
that is in opposition to its channel counterpart.
It is opponent centered and direct, in which the
goal object sought is controlled by the counterpart”

5. Managing Channel Conflict
The Implication of channel conflict
A negative in many channel relationship
Sometimes channel are too peaceful, indifference,
masking great differences
Conflict is desirable for members to raise their difference
and working to search for better understanding and
higher performance
Conflict should not be judged as a defect, a state
to be eliminated
- Conflict should be monitored and then managed

6. Managing Channel Conflict
Four different kinds of information to gather and
combine to form an index of manifest conflict
1. Counting up the issues – what are the major issues?
2. Importance – ascertain the importance on each issue
3. Frequency of disagreement – how often the two
parties disagree over each particular issue?
4. Intensity of dispute – ascertain how far apart the two
parties on each particular issue

7. The Consequences of Conflict
Points of Discussion
Is conflict always undesirable?
When will conflict be desirable (functional)?
Are peaceful channels better channels
(conflict is low)?
Can conflict improve channel members’
performance?

8. The Consequences of Conflict
Functional conflict is desirable if members
Communicate more frequently and effectively
Establish outlets for expressing their grievances
Critically review their past actions
Devise and implement a more equitable split of system
resources
Develop a more balanced distribution of power in
their relationship
- Develop standardized ways to deal with future conflict
and keep it within bounds

9. Major Sources of Conflict
Conflict is a staple in marketing channels
because of
Built-in differences in viewpoint and goals
Differing perceptions of reality
Clash over domains (roles, responsibilities,
territories)

10. Major Sources of Domain Conflict
Multiple channels is major source of market
domain conflict
Multiple channels: Using more than one route to get to
the same market
Different kinds of multiple channels: Dual distribution,
plural distribution, hybrid distribution
Customers can find products easier to match their needs
Downstream members may lose motivation, withhold
support, retaliate or exit the business

11. Major Sources of Domain Conflict
Ways that suppliers address multiple channel conflict
Devise different pricing schemes for different channels
Offer more support, more service, more product and
even different products to different channel types
Offer the same product under different brand names
to different channels
Sell primary part of the product line through one
channel and secondary or peripheral products
through another

12. Major Sources of Domain Conflict
Point of Discussion
What is Gray Marketing?
How can this happen?
Is the trend getting increasing or decreasing?
What are the advantages and disadvantages
to suppliers?

13. Major Sources of Domain Conflict
Gray market: The unwanted channels
“Gray marketing is the sale of authorized, branded
product through unauthorized distribution channels”
Gray marketing can be contrasted with black marketing
or counterfeiting which involves selling fake goods as
branded ones

14. Major Sources of Domain Conflict
Development of gray market coming from
- Suppliers offer differential pricing to different channel
members
- Suppliers practice pricing differently to different
geographic markets
- Domestic products sold through high-service, high-price
channels at home
- Development of emerging markets and worldwide
liberalization of trade
- Price differences exist across boundaries or territories

15. Conflict Management Points of Discussion
- How dealers react once the destructive action
from suppliers taken place?

16. Conflict Management Reaction from dealers upon destructive incidences
Dealers blame themselves
- Constructive engagement
- Withdrawing from the relationship
Dealers blame the suppliers
- Less likely to accept the situation passively
- More likely to take any sort of action
Dealers blame the environment

17. Conflict Management
Five different types of reaction from dealer to deal
with disputes against suppliers
1. Passive acceptance: saying or doing very little
about the issue
2. Venting: complaining vigorously without taking action
3. Neglecting the supplier
4. Threatening to resign the line
5. Engaging the supplier in constructive discussion

18. Managing Channel Conflict
Points of Discussion
How do channel members cope with
conflict?

19. Conflict Resolution Strategies
Two approaches are presented
1. Develop institutionalized mechanisms
- Joint memberships in trade associations
- Distributor councils for two-way communication
- Exchange of personnel programs (learning, knowing
the other party’s tasks and interests)
- Co-optation to share responsibility
- Third-party mechanisms (mediation, arbitration)

20. Conflict Resolution Strategies
Two approaches are presented
2. Use common norms to resolve conflict
- Flexibility (adapt to changing circumstances)
- Information exchange (share all pertinent information)
- Solidarity (work for mutual benefit)

21. Conflict Resolution Strategies