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How should companies integrate channels and mange channel conflict

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Sameer Mathur
Sameer Mathur

How should companies integrate channels and mange channel conflict

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Designing and managing integrated marketing channels SHUBHAM VERMA IIT GUWAHATI How should companies integrate channels and manage channel conflict ?
Two type of marketing systems • Vertcal • Horizontal Types of marketing systems • Vertical Marketing System -> Producer , Wholesaler and retailer act as unified system • Horizontal Marketing System -> Two or more unrelated companies put together resources or programs to exploit an emerging opportunity
Vertical marketing systems Corporate VMS Contractual VMS Administered VMS Wholesaler sponsored voluntary chains Retailer coopretives Franchise oraganisations
3 types of VMS Corporate VMS -> Combines successive stages of production and distribution under single ownership Administered VMS -> Coordinates successive stages of production and distribution through through size and power of members Contractual VMS ->Independent firms at different level of production
What is integrated marketing channel system ? A channel system in which the strategies and tactics of selling through one channel reflect the strategies and tactics of selling through one or more other channels.
Example of Disney and Disney sells DVDs through 5 main channels : 1) Movie Rental Stores such as Blockbuster 2)Disney Stores 3)Retail Stores such as Best Buy 4)Online retail stores such as amazon.com 5)Disney catalog and other catalog sellers
3 benefits of adding more channels
More customers
Lower Channel cost
More force , Customized Selling
Integration helps (use the para above diag)
Channel Conflict Channel Conflict is generated when one channel member’s action prevent other channel to achieve it’s goal
Horizontal Channel conflict -> Occurs at same level When Pizza Inn franchises complained about cheating on ingredient and poor service Vertical channel conflict -> occurs at different levels Command of big retailers like Walmart on prices of Disney products. Multichannel conflict -> When two or more channels sell to same market Big Bazar boycotted Cadbury and Kellogs due to price issues.
Causes of conflict : • Goal incompatibility • Unclear roles and rights • Differences in perception • Intermediaries’ dependence on manufacturer
Strategies to manage Channel conflict • Strategic Justification -> Justifying that different channels serve different segments and do not need to compete • Dual Compensation - > Paying existing channels to sell through new channels • Superordinate Goals -> Make the channels agree that their main motive is high quality and satisfaction • Employee Exchange -> Exchange persons between two channels • Joint Membership -> Encouraging joint working • Co-potation -> Effort of one organization to win support of other
How should companies integrate channels and mange channel conflict

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How should companies integrate channels and mange channel conflict

  • 1. Designing and managing integrated marketing channels SHUBHAM VERMA IIT GUWAHATI How should companies integrate channels and manage channel conflict ?
  • 2. Two type of marketing systems • Vertcal • Horizontal Types of marketing systems • Vertical Marketing System -> Producer , Wholesaler and retailer act as unified system • Horizontal Marketing System -> Two or more unrelated companies put together resources or programs to exploit an emerging opportunity
  • 4. 3 types of VMS Corporate VMS -> Combines successive stages of production and distribution under single ownership Administered VMS -> Coordinates successive stages of production and distribution through through size and power of members Contractual VMS ->Independent firms at different level of production
  • 5. What is integrated marketing channel system ? A channel system in which the strategies and tactics of selling through one channel reflect the strategies and tactics of selling through one or more other channels.
  • 6. Example of Disney and Disney sells DVDs through 5 main channels : 1) Movie Rental Stores such as Blockbuster 2)Disney Stores 3)Retail Stores such as Best Buy 4)Online retail stores such as amazon.com 5)Disney catalog and other catalog sellers
  • 7. 3 benefits of adding more channels
  • 10. More force , Customized Selling
  • 11. Integration helps (use the para above diag)
  • 12. Channel Conflict Channel Conflict is generated when one channel member’s action prevent other channel to achieve it’s goal
  • 13. Horizontal Channel conflict -> Occurs at same level When Pizza Inn franchises complained about cheating on ingredient and poor service Vertical channel conflict -> occurs at different levels Command of big retailers like Walmart on prices of Disney products. Multichannel conflict -> When two or more channels sell to same market Big Bazar boycotted Cadbury and Kellogs due to price issues.
  • 14. Causes of conflict : • Goal incompatibility • Unclear roles and rights • Differences in perception • Intermediaries’ dependence on manufacturer
  • 15. Strategies to manage Channel conflict • Strategic Justification -> Justifying that different channels serve different segments and do not need to compete • Dual Compensation - > Paying existing channels to sell through new channels • Superordinate Goals -> Make the channels agree that their main motive is high quality and satisfaction • Employee Exchange -> Exchange persons between two channels • Joint Membership -> Encouraging joint working • Co-potation -> Effort of one organization to win support of other