Chapter 10 Channel Relationship Management

Theoretical Basis of CRM

Relationship Marketing Theory

Transaction Cost Theory

Resource-dependent Theory

Strategic Alliance Theory

Core-competence Theory

Concept of CR

Channel Relationship

Transaction Benefit School of Hunt

Transaction Partner School of Stern

Transaction Benefit School of HuntHunt(1983)thinks that channel relationship a kind of

exchange relationship that contributes to mutual interests of the channel members based on the perspective of transaction,which is widely recognized by many scholars.

Pelton and someothers(2002)developed Hunt’s definition about the channel relationship by defining it as various relationships that aim at creating customer value during the process of acquiring,consuming and disposing the prdocuts and services.The think the channel relationship is emerging to adapt to the market need as a means of serving the market.

Transaction Partner School of Stern School of transaction partner think channel relationship is that the

related parties recognize each others’ special status and regard each other as its parnter to improve the product quality and reduce

management costs in a concerted effort, based on the trust.

Gronroos developed this idea in 1990.He thinks channel relationship is the member relationship which is exchanged ,promised ,built ,maintained and commacialized with the aim at realizing all the channel memebers’goals.

In 2001 Stern further ponited out that the nature of the channel relationship is that the channel members concert efforts to build alliance between the upstream enterprises and the downstream enterprises to maintain the sustainable competition and excessive profits.

Based on the study fruits of many scholars ,we could see that

Channel Relationship is a reciprocal relationship which is built from the upstream to th downstream based on the interactions among the channel members,which aims at acquiring greater channel value.

Components of Channel

Relationship

Components of Channel Relationship

Common vision

Mutual trust

Behavioral cooperation

Sharing of information and benefits

Value of channel relationship

Synergy Effect

Sharing of detailed customers’ information

Sharing about the other party enterprise ability to realize the increasing income of own enterprise ability

Key Words of Channel Alliance

Awareness

Exploration

Expansion

Commitment

Decline and Dissolution

Discussion Comparison between TC & RC

A B C D E

Nature Supplier Manufacturer Distributor Consumer

Transaciton Distribution Relatinship DistributionUnstable relationship Stable relationship

Single transaction Mutiple transaction

Short cooperative time Long cooperative time

Statisfying customers in one way Statisfying customers in many ways

one time transaction Distributors’ loyalty

Occasional action Schemed action

Independent transaction goal Realizing the goal of sharing

Small supplier quantity Large supplier quantity

Pursuiting profits per transaction Solving the promblems in a long term

Acquring new customers continously Maintaining the current customers

Low trust between each other High trust between each other

Few cooperative contents Many cooperative contents

Little feedback to each other Much sharing resource

Main Factors of Channel Members’ Relationship

1) Trust

2) Mutual Dependence

3 ） Influence Strategy

4 ） Reputation & Promise of Suppliers

5 ） Uncertainty of Environment

Information Flow

Material Flow

Capital Flow

Relationship-oriented Innovation of Channel Management

consumerManufacturersupplierSales

Agent

Philosophy Innovation

Management Innovation

Mechanism Innovation

Process Innovation

Thank you for your time!