1
MARKETING CHANNELS
Channel Power
Berman chapter 13
2
Channel Power
• 1. Behavioral - conflict, cooperation
• 2. Channel Power
• 3. Channel Dominance
• 4. Nature of Conflicts
• 5. Channel Cooperation
3
CHANNEL CLOUT
• Innovative • Assortment
• Brand- identity • Profit making • Bundling
•
Service-responsiveness • Training
• Geographic • Quality
4
1.Behavioral Systems
• Approach vs Economic Systems
• Perspectives
– power – conflict
– cooperation – satisfaction
• Bases
– social psychology
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
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
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
8
Buyer Retailer Power
• store loyalty
• bargaining share
• centralized purchasing
• private label strategy
• selling against the brand
• exclusive merchandise
• gray market distributors
9
• Control of the Channel
– channel captain
– individual determination
• Power and Performance
– higher performance – self preservation
• complementary roles – self enrichment
10
4. Nature of Conflicts
• types
– horizontal, intertype, vertical
• stages
– latent - sources
– perceived vs latent
– felt - tension, anxiety, disaffection
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
12
• Channel dysfunctional results
13
5. Channel Cooperation
• joint promotional programs
• joint inventory management assistance
• exclusive products
• information sharing
• training
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
15
7. Channel Satisfaction
elements
• social interaction • product assistance • financial assistance • cooperative
advertising
results
• higher morale
• greater cooperation • fewer terminations • fewer lawsuits
