The slides highlight the competition and conflict with a marketing channel. Enjoy and rate out of 10. Thank You!

1. CONFLICT AND CHANNEL
COMPETITION
In Marketing Channels
Management

2. 1. CHANNEL COMPETITION
WHAT IS CHANNEL
COMPETITION?

3. F R O M T H E P R O D U C E R ’ S O R M A N U FA C T U R E R ’ S S TA N D P O I N T, A N U N D E R S TA N D I N G O F C O M P E T I T I V E S T R U C T U R E A N D
T H E C H A N G E S TA K I N G P L A C E I N T H AT S T R U C T U R E A R E C R U C I A L F O R S U C C E S S F U L C H A N N E L D E S I G N A N D
M A N A G E M E N T. I N D E S I G N I N G T H E M A R K E T I N G C H A N N E L , T H E C H A N N E L M A N A G E R N E E D S T O D E T E R M I N E W H I C H K I N D S
O F D I S T R I B U TO R S A N D / O R D E A L E R S C A N P R O V I D E T H E M O S T E F F I C I E N T A N D E F F E C T I V E D I S T R I B U T I O N O F T H E F I R M ’ S
P R O D U C T S . B U T G I V E N T H AT T H E C O M P E T I T I V E S T R U C T U R E O F D I S T R I B U T O R S A N D D E A L E R S C H A N G E S , S O M E T I M E S
R A P I D LY. C O N V E N T I O N A L I D E A S A B O U T T H E K I N D S O F D E A L E R S O R D I S T R I B U TO R S T H AT S H O U L D S E L L PA RT I C U L A R
P R O D U C T S C A N Q U I C K LY B E C O M E O B S O L E T E .

4. TYPES OF COMPETITION
1. Horizontal competition
2. Intertype competition
3. Vertical competition
4. Channel system competition

5. HORIZONTAL
competition between firms of the same
type; for example, an automobile
manufacturer versus another automobile
manufacturer, a plumbing supply
wholesaler versus another plumbing
supply wholesaler, or one supermarket
versus another. This is the most visible
and frequently discussed form of
competition. In economic theory, much of
the treatment of competition deals with
this horizontal type, although it is usually
referred to simply as competition, and
often the firms involved are producers or
manufacturers rather than wholesalers or
retailers.

6. INTERTYPE
This is competition between different
types of firms at the same channel level;
for example, the off-price store versus
the department store or the merchant
wholesaler versus agents and brokers.

7. EXAMPLE: TM VS THE TUCKSHOP
OWNER
TM TUCKSHOP

8. VERTICAL
Refers to competition between channel
members at different levels in the
channel, such as retailer versus
wholesaler, wholesaler versus
manufacturer, or manufacturer versus
retailer.

9. EXAMPLE: MOHAMED MUSSA VS
PICK N PAY
Pick n Pay Mohamed Mussa

10. CHANNEL SYSTEM
Refers to complete channels competing
with other complete channels. In order for
channels to compete as complete units,
they must be organized, cohesive
organizations.

11. CLASSIFICATIONS
Corporate
Contractual
Administered

12. Corporate channels, production and marketing facilities are owned by the same company;
Firestone Tire & Rubber Company and Sherwin-Williams Company (paints) are examples.
Contractual channel, independent channel members—producers or manufacturers, wholesalers,
and retailers—are linked by a formal contractual agreement. Wholesaler- sponsored voluntary
chains, retailer cooperatives, and franchise systems are the three major forms of contractual
marketing systems.
Administered channel systems result from strong domination by one of the channel members
(frequently a manufacturer) over the other members. This dominant position is a function of the
leverage that the dominant channel member can achieve based on a monopoly of supply, special
expertise, strong consumer acceptance of its products, or other factors.

13. 2. CHANNEL CONFLICT

14. BUT WHAT HAPPENS IN CHANNEL
CONFLICT?
•Channel conflict can also occur when there has been over production. This
results in a surplus of products in the market place.
• Channel conflict occurs when manufacturers (brands) disinter
mediate their channel partners, such as distributors, retailers, dealers,
and sales representatives, by selling their products direct to
consumers through general marketing methods and/or over
the internet through e-Commerce.
• Newer versions of products, changes in trends, insolvency of wholesalers
and retailers and the distribution of damaged goods also affect channel
conflict. In this connection, a company's stock clearance strategy is of
importance

15. TYPES OF
CHANNEL
CONFLICT
VERTICAL
HORIZONTAL
MULTI CHANNEL
Types of Channel
Conflict

16. VERTICAL COMPETITION

17. HORIZONTAL CONFLICT

18. MULTI CHANNEL CONFLICT
Example:-
Online Store Like e-bay
Example:-
Exclusive Company Outlet

19. CAUSES OF
CHANNEL
CONFLICT
Goal Incompatibility
Unclear Roles and Rights
Differences in Percerption
Intermediaries` dependency on
Manufactures

20. HOW TO MANAGE CONFLICT
Adoption of Super ordinate Goals
Exchange Of Employees
Co-Optation
Diplomacy By:-
 Mediation
 Negotiation
Legal Route

21. DILUTION &
CANNIBALIZATION:-
Marketers must be careful not to dilute
their brands through inappropriate
channels.
Exclusive dealings often includes
exclusive territorial agreements.
Such practices increase dealer confidence
& enthusiasm. Moreover it is perfectly
legal.
Some major brands adopt the policy of
“Full-Line Forcing”.
Although such tying agreements are not
illegal, but somehow they lower the
quality of the competition.

22. PRESENTATION DONE BY:
KEITH KACHIKIRA