Distribution Channel Conflicts

Topics: Logic, Rhine Pages: 1 (293 words) Published: June 4, 2012
Is there any difference between channel conflict and channel competition?
The main difference between these two terms is the consequences of the new competition. What I understand from the texts is that the channel conflict is derivated from the channel competition but this last not necessarily has to end in a conflict.

So, the channel competition is when one channel serves customers that are already served by other channel but in different situations and offering different value proposition; so there is a gain with the new channel operation. And the channel conflict occurs when one channel targets segmented customers that are already served by other channel, so the already existing one due to the weakening is bounded to stop its activity; being the manufacturer who suffers the main impact.

Clear examples of these are: For the competition, the bending machines in the streets, which serve same customers than retailers but in other situations, both are complementary. And for the conflict, when offering the product through established channel the manufacturer settles a new direct channel to reach the end user annulling the first one.

Can channel conflicts be avoided?
Channel conflicts are inevitable but not all are drastically dangerous. Most of them can be avoided if the threats are well defined. Not every new channel is meant to end in a conflict, and analyzing the market situation and the customer’s preferences helps to avoid them. Manufacturer has to be smart enough to understand that sometimes will have to give up a traditional or existing channel for the benefit of a new one due to a shift in the market and leading to avoid the conflict. Anyway, some conflicts can appear along the time, and managing them it’s all about analyzing and making decisions.
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