1. Tata McGraw Hill Publishing Channel Management

2. SDM- Ch 13 Tata McGraw Hill Publishing 2 Channel Management Is in three broad phases: Use of power bases Identifying and resolving channel conflicts Channel co-ordination Use of power….

3. Use of Power Bases Use of the 5 power bases brings diverse channel partners in line for effective implementation 5 power bases are: reward, coercion, legitimate,expert and referent (French & Raven) Two more power bases in the Indian context are support and competition

4. SDM- Ch 13 Tata McGraw Hill Publishing 4 “Power” of Motivation French & Raven Reward – incentives for good performance Coercion – threat of punishment for non-performance Referent – benefit of sheer association with a strong company Legitimate – arising out of a contract Expert – specialized knowledge Support – additional benefits for better performers only Competition – created between channel partners Countervailing power……

5. SDM- Ch 13 Tata McGraw Hill Publishing 5 Channel Conflicts Conflict is generated when actions of any channel member come in the way of the system achieving its objectives Three broad categories of channel conflict are: Goal conflict – understanding of objectives by various channel members is different Domain conflict – understand responsibilities and authority differently Perception conflict – reading of the market place is different and proposed actions vary

6. SDM- Ch 13 Tata McGraw Hill Publishing 6 Conflicts Result From… Each channel member wanting to pursue his own goals Each wants to retain his independence There are limited resources which all of them want to utilise in achieving their goals Features of conflicts: Initially latent and does not affect the working Is not normally possible to detect till it becomes disruptive Four stages….

7. SDM- Ch 13 Tata McGraw Hill Publishing 7 Four Stages LATENT PERCEIVED FELT MANIFEST Each stage is progressively more severe than the earlier one

8. SDM- Ch 13 Tata McGraw Hill Publishing 8 Types of Conflicts Latent Conflict: Some amount of discord exists but does not affect the working or delivery of customer service objectives. Disagreement could be on roles, expectations, perceptions, communication. Perceived Conflict: Discords become noticeable – channel partners are aware of the opposition. Channel members take the situation in their stride and go about their normal business No cause for worry but the opposition has to be recognized

9. SDM- Ch 13 Tata McGraw Hill Publishing 9 Types of Conflicts Felt Conflict: Reaching the stage of worry, concern and alarm. Also known as ‘affective’ conflict. Parties are trying to outsmart each other. Causes could be economical or personal Needs to be managed effectively and not allowed to escalate. Manifest Conflict: Reflects open antagonistic behaviour of channel partners. Confrontation results. Initiatives taken are openly opposed affecting the performance of the channel system. May require outside intervention to resolve

10. SDM- Ch 13 Tata McGraw Hill Publishing 10 Reasons for Channel Conflict Roles not defined properly Allocation of scarce resources between members seem unfair to some Differences in perception of the business environment

11. SDM- Ch 13 Tata McGraw Hill Publishing 11 Reasons for Channel Conflict Future expectations not likely to materialize Decision domain disagreements – who has to decide on what (key account pricing) Channel members do not agree on objectives Misunderstanding or mis-interpretation of routine business communication Resolving….

12. SDM- Ch 13 Tata McGraw Hill Publishing 12 Resolving Conflicts A 4 Stage Process Understanding nature and intensity Tracing the source of the conflict Understand the impact of the conflict Strategy and plan of action for resolution

13. Tata McGraw Hill Publishing Conflict Resolution Styles Avoidance Styles are a combination of assertiveness and co-operation. Aggression Accommodation Compromise Collaboration Least effort and results Maximum effort and Best results

14. SDM- Ch 13 Tata McGraw Hill Publishing 14 Avoidance Used by weak channel members. Problem is postponed or discussion avoided. Relationships are not of much importance. As there is no serious effort on getting anything done, conflict is avoided.

15. SDM- Ch 13 Tata McGraw Hill Publishing 15 Aggression Also known as a competitive or selfish style. It means being concerned about one’s own goals without any thought for the others. The dominating channel partner (may be the principal) dictates terms to the others. Long term could be detrimental to the system.

16. SDM- Ch 13 Tata McGraw Hill Publishing 16 Accommodation A situation of complete surrender. One party helps the other achieve its goals without being worried about its own goals. Emphasis is on full co-operation and flexibility in approach. May generate matching feelings in the receiver. If not handled properly, can result in exploitation

17. SDM- Ch 13 Tata McGraw Hill Publishing 17 Compromise Obviously both sides have to give up something to meet mid way. Can only work with small and not so serious conflicts. Used often in the earlier two stages.

18. SDM- Ch 13 Tata McGraw Hill Publishing 18 Collaboration Also known as a problem solving approach Tries to maximize the benefit to both parties while solving the dispute. Most ideal style of conflict resolution – a win-win approach Requires a lot of time and effort to succeed. Sensitive information may have to be shared