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Channel Conflict

Channel Conflict Assignment / Homework Help
Marketers often believe in the theory that increasing distribution members helps in boosting sales. Addition of resellers should be a well thought out strategy as this may often lead to channel conflict. Existing resellers often feel threatened by the addition of new ones as they see it as a threat to their business. Additional resellers mean sharing of customers and potential business and this is not always taken down well by the existing resellers. In case the resellers feel this conflict they may even stop selling the marketer's product.

Need for Long-term Commitments

It is very difficult for the marketer to take channel decisions as often such decisions have long-term consequences. Forming new relationships takes a lot of effort and ending existing ones can be very difficult.

A company may decide to change its distribution strategy and stop selling their products through the existing channel. If in the future the company wants to revert back to the previous distribution channel the transition may not be very smooth. The company will face resistance as the distribution system may now be distributing products of a competitor company. In addition past experience with the company may make the distribution system reluctant in offering its services to the company again. Therefore before severing ties with a distribution system the marketer should be sure it is in the best interest of his company.


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