Discuss channel cooperation and conflict. How might each one affect distribution channel functions?

Question

What will be an ideal response?

Answer 1

Channel cooperation is vital if each member is to gain something from the other members. Cooperation enables retailers, wholesalers, suppliers, and logistics providers to speed up inventory replenishment, improve customer service, and cut the costs of bringing products to the consumer. Because the supply chain is an interrelated system, the success of one firm in the channel depends in part on other member firms. Without cooperation, neither overall channel goals nor individual member goals can be realized. Thus, marketing channel members should make a coordinated effort to satisfy market requirements. Channel cooperation leads to greater trust among channel members and improves the overall functioning of the channel. Cooperation also leads to more satisfying relationships among channel members.Although all channel members work toward the same general goal-distributing products profitably and efficiently-members sometimes may disagree about the best methods for attaining this goal. If self-interest creates misunderstanding about role expectations, the end result is frustration and conflict for the whole channel. For individual organizations to function together, each channel member must clearly communicate and understand role expectations. Communication difficulties are a potential form of channel conflict because ineffective communication leads to frustration, misunderstandings, and ill-coordinated strategies, jeopardizing further coordination. Many firms use multiple channels of distribution, especially now that most retail firms have an online presence. The Internet has increased the potential for conflict and resentment between manufacturers and intermediaries. Channel conflicts also arise when intermediaries overemphasize competing products or diversify into product lines traditionally handled by other intermediaries. When a producer that has traditionally used franchised dealers broadens its retailer base to include other types of retail outlets, for example, conflict can arise with the traditional outlets. Sometimes conflict develops because producers strive to increase efficiency by circumventing intermediaries.