Sales and distribution Management

1. channel conflict
•A channel conflict may be defined as “A situation
in which one channel member perceives another
channel member(s) to be engaged in behavior
that prevents it from achieving its goals”.
•Conflict is opposition, disagreement or discard
among the organizations.

2. • Conflict is not always undesirable.
• ¬It is needed to have positive effect as loopholes in the
existing system can be plugged timely and performance
can be maximized.
• It can keep other channel members on their toes knowing
that a decline in performance might lead to a change in the
channel arrangements.
• “Channel conflict arises when the behavior of a channel
member is in opposition, to its channel counterpart. It is
opponent centered and direct, in which the goal or object
sought is controlled by the counterpart.” Coughlan,
Anderson,

3. • Conflicts exists in the channels despite of well
design and management.
• Channel conflict is generated when one
channel member’s actions prevent another
channel from achieving its goal.
Conflict

4. Causes of channel conflict
Conflict may arise from:
• Goal incompatibility
– Manufacturers - rapid market penetration with low price
– Dealers – high profit margins, short run profitability.
• Unclear roles and rights:
– Territory rights, customer segments (larger accounts) etc.
• Difference in perception:
– Manufacturers – optimistic and want dealer to hold higher inventory
– Dealer vice versa.
• Intermediaries’ dependence on the manufacturer.
– The fortune of exclusive dealers are affected by the manufacturer’s
products and pricing decision.

5. Types of Conflict
• Pre- contractual and post contractual conflict
Conflict before the contract
Conflict after the contract
• Channel level conflicts

6. Channel conflict refers to disagreement over
goals, roles, and rewards by channel members
• Vertical conflict: between different levels
within the same channel.
• Eg. conflict might be between the retailer
and the distributor, or it might be between
the distributor / C&F and the company.
Channel Level Conflict

7. • Horizontal conflict: between members at the
same level within the channel (under-cutting,
territory invasion)
Eg.conflict between 2 distributors or a conflict
between 2 retailers is known as horizontal
channel conflict.

8. • Multichannel conflict: exists when two or
more channels sell to the same market.
(parallel dealership)
Eg. Small business, Modern retail and E-
commerce.

9. There are several mechanisms for effective conflict
management:
–Adoption of super-ordinate goals: agreement on
fundamental goals
–Exchange of employees
–Joint membership in trade associations
–Co-optation (common committee)
–Diplomacy, mediation, or arbitration
–Legal option
Managing Channel Conflict

10. • Have a realistic assessment of risks and opportunities
associated with your decision.
• Be upfront with your existing distribution
• Be ready to accept criticism
• Price your products fairly across all channels.
• Do not favor one channel over another
• Assign geographical exclusivity for your brand.
• Implement a lead attribution system that will allow the
entity who obtained the lead to get the sale
• Explore private labeling

11. Negotiation
• Negotiation is a transaction between two or
more parties, leading to an exchange of
information resulting in an agreed outcome
with both parties having the right to veto.
-Roger Fisher & William Ury

12. Negotiating Steps
• Develop ground rules
• Jointly identify issues
• Explore interests
• Develop objective standards
• Brainstorm options
• Evaluate options using standards
• Try to reach consensus decision

13. Persuasive Mechanism

14. Problem Solving Strategies
• Identify the issues.
• Understand everyone's interests
• List the possible solutions (options)
• Evaluate the options
• Select an option or options.
• Document the agreement(s).
• Agree on contingencies, monitoring, and
evaluation.

15. Conflict Management Strategies
• Avoiding
Not to deal with issue or persons involved, Goes away from situation, Hoping that it may
resolved itself, Suitable when emotions are high and other could resolve
• This is Lose-Lose strategy
• Harmful when not given attention and ignored
• Accommodating
More concerned with maintaining the relationship then accomplishing a specific goal
through interaction

16. • Compromising
We agree to give up a part of our goal and part of our relationship in order to reach an agreement
• Competing
• It is a forcing strategy
• Work to achieve your goals at all cost Relationship are sacrificing in it
• I win, you loss strategy
• Time is less for the decision because of the welfare of the organization
• collaborating
• Win- Win
• strategy
• Involves energy, commitment, and excellent skills
• no one returns home empty-handed

17. Organizational Politics
– The activities managers engage in to increase their
power and to use power effectively to achieve
their goals or overcome resistance or opposition.

18. Political strategies
Specific tactics used to increase power and use it
effectively to influence and gain the support of
other people while overcoming resistance.
• Political Strategies for Increasing Power
• Political Strategies for Exercising Power

19. Co-optation:
Co-optation is the process of absorbing new element into
leadership or policy determining structure of the
organization as a mean of averting threat to its stability
or existence.
Co-optation may permit the ready accessibility among
channel members in that.
It requires the establishment of routine and reliable
channel through which information, aid and request
may be brought.
Co-optation also permit the sharing of responsibility so
that variety of channel members may become
identified and committed to the programme developed
for a particular product or service.

20. Channel Leadership
• Leaders , Managers & Staff – Must work
together understanding each other roles to
produce successful results
• Understanding the different roles is important
to know where you got to spend more time
on a day to day basis. Important you develop
your skills to align the business requirements.

21. • Channels usually perform better if a party is in
charge, providing some level of leadership.
Essentially, the purpose of this leadership is to
coordinate the goals and efforts of channel
institutions

22. Role of leadership in resolving
conflicts
– Channel captain -
– Coordination
– Commitment
– Trust between channel members
– Self Confidence Energy
– Tolerance of Stress
– Willingness to take responsibility persistence and
determination fairness
– Adaptability
– emotional intelligence

23. SKILLS NEEDED TO LEAD A TERRITORY/ REGION
• Articulate in Speech Social Skills
• Organization and Coordination Skills
Conceptualization and Creativity Diplomatic
• tactful and persuasive

24. Thank you