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Channel Conflict

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

Types of Channel Conflict

 Horizontal Conflict – Occurs amongst similar

firms at the same level in a distribution
 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.

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
 This incompatibility may be the underlying
cause of stress, ultimately creating conflict.

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
 Conflict also arises when there is lack of
agreement concerning appropriate domain of

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

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 have a strong desire to
cooperate, conflict can result from different
perceptions of the facts

Causes of Channel Conflict

Ideological Differences
it is similar to those resulting from differences in
perceived roles and expected behaviours.
Can result from big-business and small-business
perceptions of the appropriate role of

Resolution of Channel Conflict

 Problem Solving:
Superordinate Goals:
Essentially a goal that all channel members desire but that cannot
be achieved by anybody acting alone.. Development of a
superordinate goal overrides individual member goals.
Communication Processes :
Seeks to alleviate communication noise in distribution channels.
More efficient communications in the channel will permit channel
members to find solutions to their problems based on common
objectives. Meetings and trade publications allow members to develop
solutions to common problems and reinforce relationship

Resolution of Channel Conflict

 Persuasion
Emphasis is on influencing behaviour through
persuasion rather than only sharing information.
Specifically, it seeks to reduce conflict about
 Negotiation
The objective is to halt a conflict, no attempt is
made to fully satisfy a channel member. Could
lead to a compromise, once basic reason for
stress is arrested

Resolution of Channel Conflict

 Politics
Refers to the resolution of conflict by the
involvement of new parties in the process of
reaching an agreement.
1.Coalition formation
2.Mediation & Arbitration
3.Lobbying & Judicial Appeal
 Withdrawal
If all other methods fail, then the last option for the
termination of conflict is for one firm to withdraw
from the relationship.