Transcript Behavioral processes in marketing channels

Behavioral processes in
marketing channels
Week 3
Instructor: Jungwan Lee
Learning objectives
• Understand that behavioral processes such
as conflict, power, role, and
communication are inherent behavioral
dimensions in marketing channels
• Know the major causes of channel conflict
• Recognize the major issues involved in
managing channel conflict
• Delineate the bases of power in marketing
channels
Marketing channel characteristics
• An economic
system
• A social system:
behavioral process
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Conflict
Power
Role
Communication
process
Conflict vs. Competition
• Conflict:
• ..is direct, personal,
and opponentcentered behavior.
• ..blocking activities
• Coupon war
• Competition:
• ..is objectcentered, indirect,
and impersonal.
• ..interference
• Private brand vs.
National brand
Causes of channel conflict
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Role incongruities
Resource scarcities
Perceptual differences: POP displays
Expectational differences
Decision domain disagreements
Goal incompatibilties
Communication difficulties
Channel conflict vs. channel efficiency
• Channel efficiency ..is
the degree to which
the total investment in
the various inputs
necessary to achieve
a given distribution
objective can be
optimized in terms of
outputs.
• Negative effectreduced efficiency
• No effectefficiency constant
• Positive effectefficiency
increased
• General curve
Managing channel conflict
• Detecting channel conflict
– Early warning system
– Marketing channel auditing
– Distributors’ advisory councils
• Appraising the effect of conflict
• Resolving conflict
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Channelwide committee
Joint goal setting
Distribution executive
Arbitration
Bases of power for channel control
• Power..is the capacity of a particular channel member to
control or influence the behavior of another channel
members.
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Reward power
Coercive power-Wal-Mart
Legitimate power-Franchisors
Referent power
Expert power
Behavioral problems in
channel communications
• Goal differences
• Language differences
• Other behavioral problems
– Perceptual differences
– Secretive behavior
– Inadequate frequency of communication