Channel Climate

Prepared For:
Mr. Shahed Rahman

Prepared By:
Talukder Istiaque -Al- Rabbi
ID: 081 202 030
Course: MKT 450.1(Marketing Channels)
 What is Channel climate?
 Identifying the influence that
climate has on the behaviors
within marketing channels.
 Helps members design
strategies to get along, and the
likelihood of the channel's
success improves as a result.
 Channel Climate (Contd.)
 Conflict: it exists when channel members sense that
the behavior of other channel members is impeding
their performance or the attainment of their goals.
 Conflict passes through two stages:
 Affective/Perceptual stage: perceiving that there is a conflict
 Manifest stage: frustrating another channel member's
efforts to achieve goals.
 Conflict is not always bad for the channel
relations:
 Lead to more information exchange or goal congruency
among the channel members
 Channel Climate (Contd.)
 Power & Dependence:
 Channel Power: is the ability of one channel
member to evoke a change in another member’s
behavior
 A conflict of interest should occur for a
meaningful power relations to occur.
 In channel relationship, power is always a relative
thing.
 Power bases:
 Coercive base: One channel member’s belief of
being punished or penalized by another member for
not fulfilling specific target
 Expert base: is the power of knowledge in a given
area which one channel member attributes to
another member.
 Channel Climate (Contd.)
 Power bases ( Contd.):
 Legitimate base: this is a power based on one
channel member’s belief that another member
has a lawful, verifiable or logical right to
influence.
 Referent base: this is a power based on a
channel member’s identification with or desire
to affiliation with another member. E.g.:
exclusive outlets.
 Reward base: for e.g.: suppliers will only
receive rewards if they perform well.
 Channel Relationship
 Two types of channel information
are important:
 Technical knowledge: which
allows bilateral contributions to
and involvement in channel
decision making.
 Relationship knowledge: permits

better understanding of one’s

partner and contributes to an
understanding of partnership
activities and political realities.
Conflict Resolution & Channel
Climate
 Problem solving:
 Information is sought by
one or both channel
members
 Attempts are made to
resolve the conflict
through the deliberation
of the information.
 It is most likely to be used
when channel partners are
already on a common
agreement.
Conflict Resolution & Channel
Climate ( Contd.)
 Persuasion:
 Coordinated behaviors such as the
exchange of information and
agreed-upon goals already exist.
 How a new set of decision criteria
or the adaptation of another
perspective to help reach channel
goals.
 Validating the importance of new
goals.
 It differs from problem solving,
however, in that disagreements
regarding the nature of
appropriate decision criteria may
exist.
Conflict Resolution & Channel
Climate ( Contd.)
 Bargaining:
 Involves inflexible, non
concessionary behaviors, promise,
positional commitments and general
gamesmanship.
 This searches for a tolerable mix of
gains and losses for each party.
 Common goals are not accepted in
bargaining.
 disagreement on overall channel
objectives are viewed as fixed.
Conflict Resolution & Channel
Climate ( Contd.)
 Politics:
 The conflict arena
expands to include the
people involved , including
third parties.
 Power oriented tactics are
used here. E.g.: allies, use
of legitimate authority to
impose outcomes.
 Compliance Techniques
 Rapport Building:
o This is the process by which
harmonious or sympathetic relations
are established.
o From the beginning to end, attention
must be paid to perspective & style.
o Understanding the similarities &
differences can reasonable
expectations concerning the channel
relationship may be derived.
Compliance Techniques ( Contd.)
 Information exchange:
 Here the source firm’s boundary personnel
initiate a discussion on general business
concern.
 Operating policies to change the perceptions of
how the target firm might be more effectively
operated.
 Example: franchises advisory council.
 Recommendations:
 The source firm’s boundary personnel
communicate the view that the target firm’s
future will brighten if it complies with the
source's suggestion.
 From the avoidance of negative consequences or
receiving the beneficial consequences.
Compliance Techniques ( Contd.)
 Requests:
 It occurs when the source firm simply informs the target
firm of the actions it would like the target to take,
 Without referring to any specific consequences of
compliance or non compliance.
 Give & take relationship
 Satisfactory relationship with respect to economic &
interpersonal standpoint.
 Promises:
 The source firm commits to a specified reward upon
compliance from the target.
 Directly influenced by the source member.
 Increase the target’s dependence on the source.
Compliance Techniques ( Contd.)
 Threats:
 Is employed when the source
informs the target that
sanctions will be applied
should the target fail to
perform the desired action.
 Is a high cost compliance
technique by reducing the net
benefits.
 Overall effect on the
relationship.
 Stages of Relationship
Developments:
Stages Key development Processes

Awareness Cognizance of other party’s existence



Investigate potential relationship

benefit.
Exploration Attraction
Communication & bargaining

Development & use of power

Norms & expectation development

 Stages Key development Processes

Expansion Growth of value added benefits

from relationship
Growth of independence.

Commitment Loyalty
Shared values

Willingness to overcome partner’s

temp. shortfall
Trust

Future orientation
Thank You….

Question?????