1. 1 MARKETING CHANNELS Channel Power Berman chapter 13 Version 3.0

2. 2 Channel Power 1. Behavioral - conflict, cooperation 2. Channel Power 3. Channel Dominance 4. Nature of Conflicts 5. Channel Cooperation 6. Conflict Management and Resolution 7. Channel Satisfaction

3. 3 CHANNEL CLOUT Innovative Assortment Brand- identity Profit making Bundling Service- responsiveness Training Geographic Quality Market- development

4. 4 1.Behavioral Systems Approach vs Economic Systems Perspectives –power –conflict –cooperation –satisfaction Bases –social psychology –organizational theory

5. 5 2. Channel Power –def - control and influence of marketing strategy of another member dependency vs independency range of power potential power exercised power –reward, referent, expertise, persuasion, legitimate, information –coercive vs non-coercive

6. 6 Coercive power ability to punish opposite of reward threat approach conflict Non-coercive power reward - performance referent - identity, image expertise - market knowledge persuasion - validity legitimate - agreements information - data access

7. 7 3. Channel Dominance Manufacturer economic scale, size market share brand loyalty franchising refusal to deal termination vertical integration push money Wholesaler economic scale private label strategy gray market strategy customer loyalty tying agreements forward, backward integration quantity discounts

8. 8 Buyer Retailer Power store loyalty bargaining share centralized purchasing private label strategy selling against the brand exclusive merchandise gray market distributors slotting, pay-for-performance, failure fees retail trade associations

9. 9 Control of the Channel –channel captain –individual determination Power and Performance –higher performance –self preservation complementary roles –self enrichment mutual economic gain

10. 10 4. Nature of Conflicts types –horizontal, intertype, vertical stages –latent - sources –perceived vs latent –felt - tension, anxiety, disaffection –manifest - blocking goal achievement –aftermath - post conflict behavior

11. 11 Dimensions –intensity - minor, occasional, major –frequency - infrequent, occasional, continuous –importance - high, medium, low Causes –role incongruity –perceptional difference –decision domain disagreements –expectational differences –goal incompatibility –communication difficulty –resource scarcity

12. 12 Channel dysfunctional results –stimulates innovation –reduces complacency –increased efficiency –zone of tolerance

13. 13 5. Channel Cooperation joint promotional programs joint inventory management assistance exclusive products information sharing training territory protection

14. 14 6. Conflict Management and Resolution general methods persuasion problem solving negotiation politics specific methods sensitivity training shared tasks joint goal setting channel wide committees conciliation distributor advisory councils

15. 15 7. Channel Satisfaction elements social interaction product assistance financial assistance cooperative advertising results higher morale greater cooperation fewer terminations fewer lawsuits reduced protective legislation efforts