DAYANANDA SAGAR ACADEMY OF

TECHNOLOGY AND MANAGEMENT

CHANNEL CONFLICT
Presentation on “CHANNEL CONFLICT”
Course :Marketing Management
Course code :20MBA15
Branch : Master of Business Administration
PRESENTED BY : Under the guidance
of:
BHAVYA R Prof. Rachana
D
RAKSHA GOWTHAM C V Assistant
Professor,
MADHUSOODHAN BHAT Department of Management
 CHANNEL CONFLICT

Channel conflict can be any dispute or difference arising between two or

more channel partners, where one partner’s activities or operations affect
the business, sales, profitability, market share or similar goal
accomplishment of the other channel partner.
 TYPES OF CHANNEL CONFLICT

It is of the following four categories and

depends upon its flow and the parties
involved.
TYPES
• Horizontal Level Conflict • Vertical Level Conflict

The conflict among the channel It is a conflict among the channel

partners belonging to the same partners at different level within
level, i.e., issues between two or the same channel.
more stockists or retailers of
different territories.
• Inter-type Channel Conflict
Where the large retailers go out
of their way to enter a product
line different from their usual
product range, to challenge the
small and concentrated
retailers.
• Multi-channel Level Conflict
Where the channel partners
involved in a particular
distribution channel encounters
an issue with the other channel.
CONSEQUENCES OF CHANNEL CONFLICT
Price Wars: Here, the partners compete with each other on the grounds of price, and therefore, the
consumer may defer the purchase searching for the best deal.

Customer Dissatisfaction: Here,the distributors or retailers may show much interest in the
company’s products and resist to assist the consumers, which results into their resentment towards
the brand.

Sales Deterioration: Conflicts can adversely affect the sales of the products due to the decline in
distributors’ interest and an increasing number of consumers shifting to competitors’ products.

Distributors Exit: For the manufacturers, it is essential to retain the distributors or partners to
increase product sales. When there is a channel conflict, the chances of various distributors leaving
the channel increases.

Poor Public Relations: The unsatisfied distributors may negatively publicize the brand and its
products as a result of manufacturer’s unhealthy public relations with them.
CHANNEL CONFLICT MANAGEMENT
Mediation, Arbitration and Diplomacy

To resolve a dispute, the manufacturer can adopt the strategy of intervention where a third person
intervenes to create harmony. The other option is arbitration, where an arbitrator listens to the
argument of the parties involved in a conflict and declares a decision.

Co-optation

The manufacturer should hire an expert who has already gained experience in managing the channel
conflicts in other organizations, as a member of the grievance redressal committee or board of
directors, for addressing such conflicts.

Dealer Councils and Trade Associations

To handle the horizontal or vertical conflicts, the manufacturer forms a dealer council where the
dealers can unanimously put up their problems and grievances in front of the channel leader.
Regular Communication
The channel leader should take regular feedback from the channel partners through formal
and informal meetings to know about market trends and dynamics. Also, the channel
partner’s issues and conflicts can be addressed through frequent interactions.

Legal Procedure
When the conflict is critical and uncontrollable by the channel leader, the aggrieved party
can seek legal action, by filing a lawsuit against the accused party.

Fair Pricing
Most of the channel conflicts are a result of the price war, and therefore, these can be
resolved by ensuring that products are equally priced in all the territories and a fair margin
is provided to the channel partners.

Superior Goals

Establishing a supreme goal of the organization and aligning it with the individual goals or
objectives of the channel partners, may reduce the channel conflicts.
 SAMSUNG
The world-renowned brand ‘Samsung Electronics‘, faced a multi-channel level conflict in its
Indian market in the year 2014. The company was selling its products (especially mobiles)
through multiple channels, i.e., via offline mode and online mode.
The offline channel partners raised the issue that the e-retailers are providing high
discounts to attract more and more customers, which had ultimately affected the offline sale
of the product.
Due to this, many retailers and distributors in the offline market, distance themselves from
the brand and its products.
To address this issue and retain its offline distributors and retailers, Samsung provided the
right to sell forty-eight models of its brand exclusively through the offline distribution
channel, thus, re-energizing the brick and mortar channel partners.