MARKETING CHANNELS Channel Power Berman chapter 13 Version

MARKETING CHANNELS Channel Power Berman chapter 13 Version 3. 0 1

Channel Power • • 1. Behavioral - conflict, cooperation 2. Channel Power 3. Channel Dominance 4. Nature of Conflicts 5. Channel Cooperation 6. Conflict Management and Resolution 7. Channel Satisfaction 2

CHANNEL CLOUT • • • Innovative Assortment Brand- identity Profit making Bundling • Serviceresponsiveness • Training • Geographic • Quality • Market- development 3

1. Behavioral Systems • Approach vs Economic Systems • Perspectives – power – conflict – cooperation – satisfaction • Bases – social psychology – organizational theory 4

2. Channel Power – def - control and influence of marketing strategy of another member • • dependency vs independency range of power potential power exercised power – reward, referent, expertise, persuasion, legitimate, information – coercive vs non-coercive 5

Coercive power • ability to punish • opposite of reward • threat approach • conflict Non-coercive power • reward - performance • referent - identity, image • expertise - market knowledge • persuasion - validity • legitimate agreements • information - data access 6

3. Channel Dominance Manufacturer • economic scale, size • market share • brand loyalty • franchising • refusal to deal • termination • vertical integration • push money Wholesaler • economic scale • private label strategy • gray market strategy • customer loyalty • tying agreements • forward, backward integration • quantity discounts 7

Buyer Retailer Power • • • store loyalty bargaining share centralized purchasing private label strategy selling against the brand exclusive merchandise gray market distributors slotting, pay-for-performance, failure fees retail trade associations 8

• Control of the Channel – channel captain – individual determination • Power and Performance – higher performance – self preservation • complementary roles – self enrichment • mutual economic gain 9

4. Nature of Conflicts • types – horizontal, intertype, vertical • stages – latent - sources – perceived vs latent – felt - tension, anxiety, disaffection – manifest - blocking goal achievement – aftermath - post conflict behavior 10

• Dimensions – intensity - minor, occasional, major – frequency - infrequent, occasional, continuous – importance - high, medium, low • Causes – role incongruity – perceptional difference – decision domain disagreements – expectational differences – goal incompatibility – communication difficulty – resource scarcity 11

• Channel dysfunctional results – stimulates innovation – reduces complacency – increased efficiency – zone of tolerance 12

5. Channel Cooperation • • • joint promotional programs joint inventory management assistance exclusive products information sharing training territory protection 13

6. Conflict Management and Resolution general methods • persuasion • problem solving • negotiation • politics specific methods • sensitivity training • shared tasks • joint goal setting • channel wide committees • conciliation • distributor advisory councils 14

7. Channel Satisfaction elements • social interaction • product assistance • financial assistance • cooperative advertising results • higher morale • greater cooperation • fewer terminations • fewer lawsuits • reduced protective legislation efforts 15