Channel Conflict: Horizontal & Vertical Conflict

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Supply Chain Management: Technology, Measurement, Relationship & Material Integration

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:05 Channel Power
  • 2:54 Horizontal Conflict
  • 3:54 Vertical Conflict
  • 4:55 Lesson Summary
Add to Add to Add to

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Login or Sign up

Timeline
Autoplay
Autoplay

Recommended Lessons and Courses for You

Lesson Transcript
Instructor: Jennifer Lombardo
A marketing logistics plan can have channel conflict. This occurs when channel members do not agree with pricing, distribution or even logistical operations. The channel member's ultimate goal is to create a comprehensive channel partnership to eliminate any conflict and drive product efficiently to consumers.

Channel Power

Everyone wants power! Power can be used to influence people, maintain control and even force decision-making. In marketing channel development, certain members of the channel have more power. Channel power is when a certain marketing channel member controls or influences the behavior of other channel members. A powerful channel member is usually a manufacturer or a retailer. The channel leader or channel captain is the member who assumes channel leadership and exercises authority and power. In the local metropolitan area, Cheap-Mart is the perfect example of a channel leader. They have the ability to control the retail price, inventory and post-sales follow up.

Channel Conflict

Not all channel relationships are smooth in nature. Traditionally, channel members have difficulty agreeing. Channel conflict is when there is a clash of goals and methods between distribution channel members. Some conflict can actually be good for the overall marketing channel relationship. For example, Cheap-Mart does not accept retailers' practices of offering in-store coupons. They only will stock the lowest prices and demand the price-cut without having customers use coupons. The Cheap-Mart demand actually benefits consumers in the long run, as it saves them time and money.

Channel conflict can also occur because of conflicting business goals. For example, Cheap-Mart wants to sell as much candy as possible during the Halloween season. The retailer does not care if it's Sugar Rush, Hershey, Mars or Willy Wonka brand. Whereas, the individual channel member manufacturers do care who gets the best shelf space and the most support from Cheap-Mart.

Another area of conflict that can occur is when one channel member fails to fulfill expectations of another channel member. This can happen due to communication issues or not following member guidelines. For instance, Cheap-Mart believes that their customer is always in the right, and they also offer a very generous return policy. The manufacturers do not like getting large product returns. Since Cheap-Mart is the channel leader with the most power, the manufacturers have to play by Cheap-Mart's rules or not have their products stocked. This, in turn, would result in a huge loss of sales since Cheap-Mart is the largest retailer in the area.

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 160 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create An Account
Support