Chapter 10 Channel Relationship Management

Theoretical Basis of CRM Relationship Marketing Theory Transaction Cost Theory Resource-dependent Theory Strategic Alliance Theory Core-competence Theory

Concept of CR Channel Relationship Transaction Benefit School of Hunt Transaction Partner School of Stern

Transaction Benefit School of Hunt Hunt(1983)thinks that channel relationship a kind of exchange relationship that contributes to mutual interests of the channel members based on the perspective of transaction,which is widely recognized by many scholars. Pelton and someothers(2002)developed Hunt’s definition about the channel relationship by defining it as various relationships that aim at creating customer value during the process of acquiring,consuming and disposing the prdocuts and services.The think the channel relationship is emerging to adapt to the market need as a means of serving the market.

Transaction Partner School of Stern School of transaction partner think channel relationship is that the related parties recognize each others’ special status and regard each other as its parnter to improve the product quality and reduce management costs in a concerted effort, based on the trust. Gronroos developed this idea in 1990.He thinks channel relationship is the member relationship which is exchanged,promised,built,maintained and commacialized with the aim at realizing all the channel memebers’goals. In 2001 Stern further ponited out that the nature of the channel relationship is that the channel members concert efforts to build alliance between the upstream enterprises and the downstream enterprises to maintain the sustainable competition and excessive profits.

Based on the study fruits of many scholars,we could see that Channel Relationship is a reciprocal relationship which is built from the upstream to th downstream based on the interactions among the channel members,which aims at acquiring greater channel value.

Components of Channel Relationship Common vision Mutual trust Behavioral cooperation Sharing of information and benefits

Value of channel relationship Synergy Effect Sharing of detailed customers’ information Sharing about the other party enterprise ability to realize the increasing income of own enterprise ability

Key Words of Channel Alliance Awareness Exploration Expansion Commitment Decline and Dissolution

Discussion Comparison between TC & RC A B C D E Nature Supplier Manufacturer Distributor Consumer

Transaciton DistributionRelatinship Distribution Unstable relationshipStable relationship Single transactionMutiple transaction Short cooperative timeLong cooperative time Statisfying customers in one wayStatisfying customers in many ways one time transactionDistributors’ loyalty Occasional actionSchemed action Independent transaction goalRealizing the goal of sharing Small supplier quantityLarge supplier quantity Pursuiting profits per transactionSolving the promblems in a long term Acquring new customers continouslyMaintaining the current customers Low trust between each otherHigh trust between each other Few cooperative contentsMany cooperative contents Little feedback to each otherMuch sharing resource

Main Factors of Channel Members’ Relationship 1) Trust 2) Mutual Dependence 3 ） Influence Strategy 4 ） Reputation & Promise of Suppliers 5 ） Uncertainty of Environment

Information Flow Material Flow Capital Flow Relationship-oriented Innovation of Channel Management consumer Manufacturer supplier Sales Agent

Philosophy Innovation Management Innovation Mechanism Innovation Process Innovation

Thank you for your time!