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Marketing Management 15th Edition by Philip Kotler, Kevin Keller
Edition 15ISBN: 978-0133856460Marketing Management 15th Edition by Philip Kotler, Kevin Keller
Edition 15ISBN: 978-0133856460 Exercise 2
How can we establish multiple channels and yet manage channel conflict?
Explanation
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Channel conflict
It is an emerging issue in the marketplace with online shopping and discounted stores. When the same merchandize is available at different location accessible to customer with price variation there is channel conflict.
Management of Channel Conflict
Customers will try to buy the merchandize at the least available price (at disintermediate channels). Thus brick and motor stores lose sales and customers as online sites offer heavy discounts.
The brands which are present in the brick and motor stores should not be sold at the online sites. There should be different line of products for online and retail stores. The prices should be same among the different stores in the same locality.
Thus, if the channel partners starts competing against each other they will eat up each other's revenue and incur loss. This can be managed through controls, agreements, terms and conditions applied to supply chain.
It is an emerging issue in the marketplace with online shopping and discounted stores. When the same merchandize is available at different location accessible to customer with price variation there is channel conflict.
Management of Channel Conflict
Customers will try to buy the merchandize at the least available price (at disintermediate channels). Thus brick and motor stores lose sales and customers as online sites offer heavy discounts.
The brands which are present in the brick and motor stores should not be sold at the online sites. There should be different line of products for online and retail stores. The prices should be same among the different stores in the same locality.
Thus, if the channel partners starts competing against each other they will eat up each other's revenue and incur loss. This can be managed through controls, agreements, terms and conditions applied to supply chain.
Marketing Management 15th Edition by Philip Kotler, Kevin Keller
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