Marketing_Management_14th_Edition-min

DESIGNING AND MANAGING INTEGRATED MARKETING CHANNELS | CHAPTER 15 437
TABLE 15.2
Strategies to Manage Channel Conflict
Strategic justification
Dual compensation
Superordinate goals
Employee exchange
Joint memberships
Co-optation
Diplomacy, mediation, or arbitration
Legal recourse
impossible, but to manage it better. There are a number of mechanisms for effective conflict
management (see Table 15.2). 63
Strategic Justification In some cases, a convincing strategic justification that they serve
distinctive segments and do not compete as much as they might think can reduce potential for
conflict among channel members. Developing special versions of products for different channel
members—branded variants as described in Chapter 9—is a clear way to demonstrate that
distinctiveness.
Dual Compensation Dual compensation pays existing channels for sales made through
new channels. When Allstate started selling insurance online, it agreed to pay agents a
2 percent commission for face-to-face service to customers who got their quotes on the Web.
Although lower than the agents’ typical 10 percent commission for offline transactions, it did
reduce tensions. 64
Superordinate Goals Channel members can come to an agreement on the fundamental or
superordinate goal they are jointly seeking, whether it is survival, market share, high quality, or
customer satisfaction. They usually do this when the channel faces an outside threat, such as a more
efficient competing channel, an adverse piece of legislation, or a shift in consumer desires.
Employee Exchange A useful step is to exchange persons between two or more channel levels.
GM’s executives might agree to work for a short time in some dealerships, and some dealership
owners might work in GM’s dealer policy department. Thus participants can grow to appreciate
each other’s point of view.
Joint Memberships Similarly, marketers can encourage joint memberships in trade associations.
Good cooperation between the Grocery Manufacturers of America and the Food Marketing
Institute, which represents most of the food chains, led to the development of the universal product
code (UPC). The associations can consider issues between food manufacturers and retailers and
resolve them in an orderly way.
Co-option Co-optation is an effort by one organization to win the support of the leaders of
another by including them in advisory councils, boards of directors, and the like. If the
organization treats invited leaders seriously and listens to their opinions, co-optation can
reduce conflict, but the initiator may need to compromise its policies and plans to win
outsiders’ support.
Diplomacy, Mediation, and Arbitration When conflict is chronic or acute, the parties may
need to resort to stronger means. Diplomacy takes place when each side sends a person or group to
meet with its counterpart to resolve the conflict. Mediation relies on a neutral third party skilled in