Channel Conflicts

Channel Conflict

ARUN VARGHESE S3 MBA MACFAST [e-mail] Channel Conflicts
 Channel conflict occurs whenever channel members have distinctly different opinions or perceptions about distribution channel affairs. If no interdependence exists, there would be no basis for conflict. Mutual dependence creates the basis for conflict

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Types of Channel Conflict
 Horizontal Conflict – Occurs amongst similar firms at the same level in a distribution channel.  Intertype – Occurs amongst different intermediaries at the same level in a channel. Differs from horizontal in that bit occurs among dissimilar institutions.  Vertical - Occurs amongst different levels within a channel of distribution.
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Causes of Channel Conflict
 Goal incompatibility – Though channel members  share the common goal of maximising their joint effectiveness, each is a separate legal entity. Each has its own employees, owners and interest groups who help shape goals and strategies, some of which may not be totally compatible with those of other channel members. This incompatibility may be the underlying cause of stress, ultimately creating conflict.
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Causes of Channel Conflict
 Position, Role and Domain Incongruency –  
Changes in specification of position or poorly defined roles may cause conflict. Incompatibility develops within channel arrangements as roles and methods of operation change. Conflict also arises when there is lack of agreement concerning appropriate domain of members

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Causes of Channel Conflict

 Communication Breakdown
Often is the reason for channel conflict. Could occur in 2 ways:
• 1) When a firm fails to exchange vital information with other channel members. • 2) Through noise and distortion

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Causes of Channel Conflict
 Different Perceptions of Reality
Conflict occurs when different channel members differ in methods of achieving mutual goals or have different solutions to a mutual problem Even when they