Value network and marketing channel decisions are among the most complex and challenging decisions facing the firm. Each channel system creates a different level of sales and costs. Once a particular marketing channel is chosen, the firm usually must adhere to it for a substantial period.
Marketing channels are characterized by continuous and sometimes dramatic change, especially with the changes brought by the growth of the Internet as a major marketing tool and channel of distribution. For example, the new competition in retailing no longer involves competition between individual firms but rather between retail systems. Three of the most significant trends are the growth of vertical, horizontal, and multichannel marketing systems. All channel systems have a potential for vertical, horizontal, and multichannel conflict stemming from such sources as goal incompatibility, unclear roles and rights, differences in perception, and high dependence.
Managing these conflicts can be sought through superordinate goals, exchange of persons, co-optation, joint membership in trade associations, diplomacy, mediation, and arbitration. Marketers should continue to explore and respond to the legal and moral issues involved in channel development decisions.
channel conflictChannel conflict can probably never be totally avoided, as one is dealing with both organizations and individuals, each with their own idiosyncrasies and politics. However, conflict can be minimized by:
• Careful selection of channel partners
• Careful detailing and communication of expectations of each partner
• Upholding the expected standards
• Engaging in ethical decision-making
