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Channel Convergence: Merging Perspectives and ...
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How channel convergence minimizes channel conflict. “The product availability issues in different channels, some channel partners (distributors/retailers) getting it early and others receiving it late or manufacturer deciding to sell through its direct-to-consumer (D2C) channel and competing with existing channel partner can also lead to a channel conflict situation.” The channel conflict, beyond a point, can lead to customer confusion or dissonance, purchase postponement, reduced sales, and negative impact on brand reputation in the marketplace. The technological advancements such as Industry 4.0, enterprise resource planning (ERP), and other digitization initiatives have enhanced demand on the manufacturers by their channel partners. The increase in number of product and services in the product portfolio is making it challenging for companies to track the channel conflict phenomenon. The adoption of strategic pricing techniques and adequate utilization of channel mediums are two methods by which a competitive edge can be gained in B2B channel disputes. The conflict can happen at vertical and horizontal channel distribution level.
Network expansion is part of business growth strategy. The channel network expansion facilitates seamless distribution of goods and services to the customers. Maintaining strong business relationship with channel partners is essential for the sustenance and growth of the business.1 However, the network expansion may lead to conflict situations which are popularly known as “channel conflict” in the industry. The channel conflict occurs when the same brand is selling at different prices in same or different distribution channels. The product availability issues in different channels, some channel partners (distributors/retailers) getting it early and others receiving it late or manufacturer deciding to sell through its direct-to-consumer (D2C) channel and competing with existing channel partner can also lead to a channel conflict situation.2The channel competition and unrealistic business goals may weaken business-to business channel synergy. “The channel conflict, beyond a point, can lead to customer confusion or dissonance, purchase postponement, reduced sales, and negative impact on brand reputation in the marketplace.” Vertical Channel Conflict: The Manufacturer-Distributor Puzzle
How channel convergence minimizes channel conflict. “The channel conflict occurs when the same brand is selling at different prices in same or different distribution channels.” The channel conflict, beyond a point, can lead to customer confusion or dissonance, purchase postponement, reduced sales, and negative impact on brand reputation in the marketplace. The technological advancements such as Industry 4.0, enterprise resource planning (ERP), and other digitization initiatives have enhanced demand on the manufacturers by their channel partners. The increase in number of product and services in the product portfolio is making it challenging for companies to track the channel conflict phenomenon. The adoption of strategic pricing techniques and adequate utilization of channel mediums are two methods by which a competitive edge can be gained in B2B channel disputes. The conflict can happen at vertical and horizontal channel distribution level.
How channel convergence minimizes channel conflict. “The channel competition and unrealistic business goals may weaken business-to business channel synergy.” The channel conflict, beyond a point, can lead to customer confusion or dissonance, purchase postponement, reduced sales, and negative impact on brand reputation in the marketplace. The technological advancements such as Industry 4.0, enterprise resource planning (ERP), and other digitization initiatives have enhanced demand on the manufacturers by their channel partners. The increase in number of product and services in the product portfolio is making it challenging for companies to track the channel conflict phenomenon. The adoption of strategic pricing techniques and adequate utilization of channel mediums are two methods by which a competitive edge can be gained in B2B channel disputes. The conflict can happen at vertical and horizontal channel distribution level.
Setting ground rules “The organization should share ground rules with all channel partners especially regarding pricing.” Emulating use cases in channel conflict management
Pricing strategy “The pricing policy of the organization should document the tiered pricing which should clearly delineate the discount given as per volume, type of customer, region, delivery schedules, and other industry relevant parameters.” Setting ground rules
Pricing strategy “The transparent pricing policy and the alignment of channel incentives are key to constructive business relationships in the network.” Setting ground rules