Question

Discuss the causes of channel conflict as identified by Berman (1966), and explain how "clothing bank charity" resolves channel conflict

Answer 1

Channel conflict is defined as any dispute or discord arises between channel partners where one partner business activities affects the market share, sales , profitability of another partner.

Causes of channel conflict -  

Role Ambiguity- The ascertain act of intermediaries in multi-channel partner business leads to disturbance in the distribution channel and leads to confusion and conflict among the intermediaries.

Incompatible Goals- When the goal orientation of the intermediaries are manufactures does not align, they work in different direction to meet their personal objectives which leads to conflict.

Marketing Misalignment - When two different partners market the same product in a different way, it creates gap and different brand image in the mind of the customer.

Difference in market perception - The manufacturer’s understanding of the potential market and penetration into a specific region or territory, may vary from the perception of the intermediaries.

Change Resistant - The change resistant can be intermediaries or channel partner creates confusion and conflict in the progress and development.

Improper Demography- If the sales territory is big and the channel partners are less can effect sales. Even a small territory with a lot of channel partner creates confusion ion the mind of customer also it can create a lack of interest.

The main consequence of this issue is the price war and customer dissatisfaction, distributor exit.

Clothing bank charity can resolves channel conflict - The clothing bank skills and support the unemployed the local retailers to earn their living. They use clothing waste to support supply chain. The clothes are sold at micro level at profit and hence it supports locals and also the business.

The clothing bank helps to promotes brand without much of intermediaries and hence reducing the conflict.

The price war is resolves as the intermediaries are diminished so the pricing becomes reasonable. The brand communication is also clear and the customer are also satisfied with a positive brand image made through clothing bank. The clothing bank can resolve the issue of channel conflict. On this model the other brands can also work lessen the intermediaries can lessen the conflict and promote brand image.