Unit - IVMarketing Channels: Channel Management, Co-operation & Conflict ManagementArun MishraAsst. ProfessorVNS Business School(M) 9893686820Email: arunimi!hra"gmail#comMarketing Channels Defined$% Marketing Channel can &e 'ie(e) a! large canal or pipelinethrough(hich pro)uct!, their o(ner!hip, communication,financingan)pa*ment,an) accompan*ing ri!+ flo( to the con!umer#$,t i! a !et of inter)epen)ent organi!ation! that ea!e! thetran!ferofo(ner!hipa!pro)uct!mo'efrom pro)ucer to &u!ine!! u!er! of con!umer!#$ChannelMe!ersareallpartie!inthemar+eting channel(honegotiate(ithoneanother,&u*!ell pro)uct!, & facilitate the change of o(ner!hip#$U"strea"artnersinclu)era(material !upplier!, component!, part!, information, finance!,an)e-perti!etocreatea pro)uct or !er'ice$Do#nstrea"artnersinclu)ethe mar+etingchannel!or)i!tri&ution channel! that loo+ to(ar) the cu!tomerSu""l$ Chain PartnersValue Deli%er$ Net#ork$Value deli%er$ net#ork i! the firm.! !upplier!, )i!tri&utor!, an) ultimatel* cu!tomer!(hopartner(itheach other to impro'e the performance of the entire !*!tem&he Nature and I"ortance of Marketing Channels$Interediariesofferpro)ucer!greater efficienc*inma+inggoo)!a'aila&leto targetmar+et!#/hroughtheircontact!, e-perience,!peciali0ation,an)!caleof operation!,interme)iarie!u!uall*offer thefirmmorethanitcanachie'eonit! o(n#'o# Channel Me!ers Add Value&he Nature and I"ortance of Marketing Channels$1romaneconomic'ie(,interme)iarie! tran!formthea!!ortmentofpro)uct!into a!!ortment! (ante) &* con!umer!$Channelmem&er!a))'alue&*&ri)ging themaortime,place,an)po!!e!!ion gap!that!eparategoo)!an)!er'ice! from tho!e (ho (oul) u!e them'o# Channel Me!ers Add Value&he Nature and I"ortance of Marketing Channels'o# Channel Me!ers Add Value&he Nature and I"ortance of Marketing Channels'o# Channel Me!ers Add ValueNu!er of Channel (e%els Channel Conflict$Channelconflictrefer!to)i!agreemento'er goal!, role!, an) re(ar)! &* channel mem&er!#$/*pe! of Conflict!:2'ori)ontalconflictin'ol'e!conflict&et(eenmem&er! atthe!amele'el(ithinthechannel#*g.APizza franchiseecomplainabouttheotherfranchisee cheating.2Vertical conflict mean! conflict! &et(een )ifferent le'el! (ithin the !ame channel#2Multi Channel Conflict e-i!t (hen the manufacturer ha! e!ta&li!he) t(o or more channel! that !ell to the !ame mar+et# Channel Conflict$Causes of Channel conflict:2 +oal inco"ati!ilit$.2 Unclear roles and rights.2 Differences in "erce"tion.2 Interediaries de"endence on the anufacturer.$Managing Channel Conflicts:2 Ado"tion of su"erordinate goals2 *,change "ersons !et#een t#o or ore channel le%els.2 Including the in ad%isor$ councils etc.2 *ncouraging -oint e!ershi"s in trade associations.2 Di"loac$2 Mediation2 Ar!itrationVertical Marketing S$stes $Vertical arketing s$stes .VMSs/ con!i!t of pro)ucer!, (hole!aler!, an) retailer! acting a! a unifie) !*!tem an) con!i!t of:2Corporate 3ertical Mar+eting !*!tem!2Contractual 3ertical Mar+eting !*!tem!2%)mini!tere) 3ertical Mar+eting !*!tem!$Cor"orate%erticalarketings$steintegrate! !ucce!!i'e!tage!ofpro)uctionan))i!tri&utionun)er !ingle o(ner!hip #$Adinistered%erticalarketings$steha!afe( )ominantchannelmem&er!(ithoutcommono(ner!hip# 4ea)er!hip come! from !i0e an) po(er#$Contractual%erticalarketings$stecon!i!t!of in)epen)entfirm!at)ifferentle'el!ofpro)uctionan) )i!tri&ution(hoointogetherthroughcontract!too&tain more economie! or !ale! impact than each coul) achie'e alone#/hemo!tcommonformi!thefranchi!e organi0ation#Vertical Marketing S$stesVertical Marketing S$stes 0ranchiseorgani)ationlin+!!e'eral!tage!in the pro)uction )i!tri&ution proce!!2Manufacturer-!pon!ore) retailer franchi!e !*!tem2Manufacturer-!pon!ore)(hole!alerfranchi!e !*!tem25er'ice firm-!pon!ore) retailer franchi!e !*!tem'ori)ontal Marketing S$ste$'ori)ontalarketings$stesare(hent(o or more companie! at one le'el oin together to follo( a ne( mar+eting opportunit*# Companie! com&inefinancial,pro)uction,ormar+eting re!ource!toaccompli!hmorethanan*one compan* coul) alone#$Eg.Manysupermarketchainshave arrangementwithlocalbankstoofferin-store banking.Multichannel Distri!ution S$stes '$!rid Marketing Channels$Multichannel Distri!ution s$stes .'$!rid arketing channels/ are (hen a !ingle firm !et! up t(o or more mar+eting channel! to reach one or more cu!tomer !egment!Channel Beha%ior and 1rgani)ationMultichannel Distri!ution S$ste Channel Manageent Decisions