Channel Conflict
Conflict, Cooperation and Competition
Channel conflict is generated when one channel member’s actions prevent another channel member from achieving its goal.
On the other hand, channel coordination occurs when channel members are brought together to advance the goal of the channel, as opposed to their own potentially incompatible goals.
There are three pertinent issues to be examined here: Types of Conflict and Competition, Causes of Channel Conflict and How to Manage Channel Conflicts.
Case 1: Apple Inc Channel Conflict
In 2003, an Apple reseller, Tom Santos, filed a lawsuit against Apple Computers Inc. . The court case alleged Apple of showing undue preference to its own Apple retail and online stores. The lawsuit claimed that Apple Computers was neglecting Apple reseller stores while shipping new goods. Many believed the suit was a result of Apple’s deteriorating relationship with some of its dealers
Apple was also accused for adopting unethical business practices. The legal battle criticized Apple’s intention to divert sales to its own stores. Dealers claimed that Apple used discriminatory pricing to undercut dealers, selling products below cost in order to get customers away from independent stores. Many other resellers joined the legal proceedings. Till June 2005, the plaintiffs awaited the allotting of a trial date at the Superior Court of the county of Santa Clara, California. Over the years Apple has succeeded not because of its first-to-market strategy but because it has been able to reach customers with clever products, clever marketing, and smart distribution. Apple though claims that its intent with its retail stores program is to make the market bigger, rather limit its existing channel.
As part of its strategy, apple continued to open more retail stores and currently operates hundreads of stores around the world.
Types of Conflict * Vertical Channel Conflict: Different levels within the same channel. E.g. Petrol pumps, beverage
Channel conflict is generated when one channel member’s actions prevent another channel member from achieving its goal.
On the other hand, channel coordination occurs when channel members are brought together to advance the goal of the channel, as opposed to their own potentially incompatible goals.
There are three pertinent issues to be examined here: Types of Conflict and Competition, Causes of Channel Conflict and How to Manage Channel Conflicts.
Case 1: Apple Inc Channel Conflict
In 2003, an Apple reseller, Tom Santos, filed a lawsuit against Apple Computers Inc. . The court case alleged Apple of showing undue preference to its own Apple retail and online stores. The lawsuit claimed that Apple Computers was neglecting Apple reseller stores while shipping new goods. Many believed the suit was a result of Apple’s deteriorating relationship with some of its dealers
Apple was also accused for adopting unethical business practices. The legal battle criticized Apple’s intention to divert sales to its own stores. Dealers claimed that Apple used discriminatory pricing to undercut dealers, selling products below cost in order to get customers away from independent stores. Many other resellers joined the legal proceedings. Till June 2005, the plaintiffs awaited the allotting of a trial date at the Superior Court of the county of Santa Clara, California. Over the years Apple has succeeded not because of its first-to-market strategy but because it has been able to reach customers with clever products, clever marketing, and smart distribution. Apple though claims that its intent with its retail stores program is to make the market bigger, rather limit its existing channel.
As part of its strategy, apple continued to open more retail stores and currently operates hundreads of stores around the world.
Types of Conflict * Vertical Channel Conflict: Different levels within the same channel. E.g. Petrol pumps, beverage
Bibliography: 1. Kotler, Keller, koshy, Jha; Marketing Management, South Asian Perspectiuve, 2011 2. http://www.casestudyinc.com/apple-computers-channel-conflict-case-study 3. Licentiate thesis: Multiple Marketing Channel Conflict, Department of business Administration & Social Sciences, Lulea university of technology