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Managing Conflict (Chp. 9)

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Managing Conflict
Chapter 9 with Duane Weaver
What is Channel Conflict?
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In channel distribution, conflict is not
negative, rather, some conflict actually
strengthen and improves a channel.
“Channel conflict arises when the behavior of
a channel member is in opposition, to its
channel counterpart. It is opponent centered
and direct, in which the goal or object sought
is controlled by the counterpart.”
Coughlan, Anderson, Stern, Adel, p. 238
Types of Conflict
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Latent conflict – norm in marketing channels
…conditions are right for contention by the
organization is unaware of it (lacking perception).
Perceived conflict – cognitive, emotionless and
mental …channel member senses some sort of
conflict exists; “all in a days work”.
Felt conflict – affective conflict, when emotions do
enter the equation.
Manifest conflict – visible, expressed in behaviour.
Usually seen as blocking each other’s initiative or
withdrawing support.
Measuring Conflict
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Count – counting # of Issues
Importance – weighting or scale
Frequency – frequency of disagreement
Intensity – of dispute (how disparate)
N
CONFLICT = ∑ Importancei X Frequencyi X Intensityi
i=1
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Index of Conflict – can be used to compare members
in a channel
Calculating Conflict – Practice Exercise
(take home – answers will be on class website)
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Analyzing 3 issues in conflict with 8 car dealers and the manufacturer:
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Disagreement about volume discount programs for carrying your own inventory (small
car dealers see no advantage, big dealers see lots)
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Requirement to participate in National Advertising program
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Importance of issue 4 small = 4/10
and the 4 big = 8/10
Frequency is monthly (every shipment)
Intensity is very disparate 9/10
Importance = 2/10 Most dealers prefer their own program (especially the larger ones,
however, it is seen as a necessary evil of being part of being a franchise)
Frequency = 2 times a year
Intensity is not too disparate 4/10 comparatively
Warranty return administration requires quintuplicate forms and can take up to 90 days
to receive payment on labour and parts expended.
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Importance = 10/10 for all dealers
Frequency = every meeting (16 times a year) and in additional at least 2 complaints per
month per 8 dealers
Intensity is the same as for the National Advertising program
Desirable Conflict
Conflict can induce:
1. More frequent and effective communication
2. Create outlets for grievances
3. Members to critically review past actions
4. The more equitable split of resources
5. The balance of power to shift more equitably
6. Standardization for dealing with future
conflict and boundary delineation
Damage from Intense Conflict
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High channel conflict can create costs
…as shown in fig. 9.1 on Page 245.
пЃ® Trust diminished
пЃ® Commitment to relationship in jeopardy
пЃ® Reduction in financial rewards
пЃ® Reduction in psychosocial benefits and
gratification from relationship
Sources of Conflict
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Competing goals
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Perceptions of reality
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Margins, unit sales, expense control, inventory,
incentives, promotions, allowances, volumes and
thresholds, market penetration objectives…
Attributes of product or service are…
Application served and segments served
What is the competition
Domain of control
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More often a perception that the other channel member is
not pulling their weight for a domain that should be theirs.
Fueling Conflict
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The Conflict propensity is strongly
correlated to the quantity of historical
incidence
Threats – induction by punishments and/or
sanctions (Coercion can lead to escalating
conflict and ultimate channel damage)
Unbalanced power is indicative of short-term
relationship expectations – propensity for
conflict is increased
Conflict RESOLUTION STRATEGIES
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Information-Intensive Mechanism
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Third-Party Mechanism
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Risk sharing sensitive information with trust and cooperation or via a
diplomat
Joint membership in Trade Associations
Personage exchange
Co-aptation (involving channel members in corporate decisions)
Mediation
Institutionalized Arbitration process
Building Relational Norms
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Flexibility, Info Exchange, and Solidarity
Styles of Conflict Resolution
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See Fig. 9.2 on Page 269.
Accommodation
Avoidance
Competition or Aggression
Compromise
Collaboration or Problem Solving
Thanks
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Work through the Conflict Measurement
Exercise and check your answers with the
web
Mid-Term questions?
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