Channel Conflict

Channel conflict arises when two different distribution channels of the same manufacturer find themselves competing for the same set of customers. 

Since manufacturers sell their products through a variety of channels from online stores to super markets, these conflicts are bound to arise. 

 

Possible effects:

 

  • At times it could be a necessity of a normal competitive business environment , leading to increased efficiency in the supply chain forcing out-of-date players to adapt or perish.
  • It has a negative effect when the overlap of consumers is big and one channel has significant advantage over the other. Sometimes the threatened channel retaliates of stops stocking the products. Ultimately the manufacturer suffers.

 

Example:

This is quite easy to relate to the Bharti-Walmart case. If Unilever’s products are stocked in a Bharti-Walmart store as well as in the near-by mom -and-pop store, the smaller local store is bound to feel threatened. 

 

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s