Channel Conflicts : Vertical Channel Conflict Essay

713 Words Nov 20th, 2015 3 Pages
If we look in the field of business management, we can see a term "channel conflict" that related to a problem, or conflict, in the flow of sales, or sales channel. This condition can occur when a manufacturer or service provider tries to extend consumers without the help of third-party retailers, dealers, suppliers or promoters. The main purpose of this system is to save the prices associated with retailers and suppliers, but the real benefits can be varied depending on the channel conflict arises from this approach. Channel conflict is generated when one channel member’s actions prevent another channel from achieving its goal. We can identify three types of conflicts: horizontal channel, vertical channel, and multichannel conflict.
Horizontal channel conflict exists between channel members at the same level. For instance, some Pizza Inn franchisees complained about others cheating on ingredients, providing poor service, and hurting the overall brand image.
Vertical channel conflict occurs between different levels of the channel. For example, McDonalds has its own brand products. McDonalds want to give more space for its own brand products rather than other brands products. Other brands suppliers will be unhappy for it.
Multichannel conflict occurs when the manufacturer has established two or more channels that sell to the same market. It’s likely to be especially intense when the members of one channel get a lower price (based on larger-volume purchases) or work with a…

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