Meaning of Channel Dynamics
Products of any company should be sent to sale – centers for selling out. The way used to send goods / products of a company to consumers is called distribution channel. Distribution channels may not be same forever. Distribution channel should be changed according to environmental changes. Changing of channels according to time is called channel dynamics. As the marketing is dynamic, so the distribution channel is dynamic. It does not remain in traditional structure. It also remains changing and developing according to time and is applied accordingly.
| New persons and new organizations enter in marketing channel system at different times. The functions and roles of such channel members become different according to the changes of time. So, distribution channel does not remain same for long, but remain changing. |
Channel Role
Each member involved in channel has his own roles. Such role may be leadership providing role and also may be subordinate or follower's role. If any change takes place in existing roles of the members, help may increase or conflicts appear. If any change does not come in the roles of channel members, only then marketing channel system can work well. So, roles of all channel members should be clear. Only then all the channel members can perform their responsibilities. As a result, all the activities of distribution channel become fruitful.
Channel Power
The capacity that can change channel members involved in distribution is called power. Channel leader persuades and controls the channel members. Mostly, channel power emerges from following five sources:
1. Reward power
The capacity to give financial or non-financial reward to the channel members involved in distribution is called reward power. Mostly, the producers use such type of reward power. Nowadays, this power has become very popular.
2. Coercion power
The power to punish, frighten, threaten etc. to all the channel members is called coercion power. Under this power, the channel members are forced to perform any work. Such power can be used by producers against wholesalers and retailers.
3. Referent power
Referent power comes out from intense desire of any channel member to be involved in channel system. Many middlemen desire to be involved for dealing with best brand of products. Due to such desire of middlemen, producers may use referent power.
4. Expert power
Expert power is acquired from long experience and special knowledge. Every channel member cannot use this power. Only those who have special knowledge and experience can use this power.
5. Legitimate power
The power which can influence / persuade and control channel members is called legitimate power. Ownership of reputed brand can provide this type of power. This types of powers makes every business just and regular.
Channel Conflict
Good relation and mutual coordination is needed among channel members in order to achieve the goal of distribution channel. As many members are involved in distribution channel, there appears conflicting environment. All the channel members may not have same wants, interest, beliefs, objectives and attitudes but may be different from person to person. As a result, conflict arises in distribution channel. Absence of harmony among channel members in their objective and functions causes conflict in distribution channel. Ideological difference, poor information, perceptual differences, unclear role, goal incompatibility etc. cause conflict.
Related Topic: Meaning and Concept of Conflicts
Channel conflict is related to human behavior. The humans have to perform their works remaining within a certain organizational environment. Misunderstanding may occur among them for several reasons. Such conflict may arise among individuals, groups, places, situations, organizations etc. In this way, conflict may arise between two sides or more in different situations. So, channel conflict can be resolved through talks, change in objective, improvement in communication and restructure of channel. So, conflict should be minimized as soon as possible not letting it spread from certain limit.
Resolution of Channel Conflict
The task of solving channel conflict is also called conflict management. Conflict surfaces for one or the other reason, but it should be not be let go beyond certain limit. If such conflict is not solved in time, it invites a great accident. So, conflict should be solved immediately by identifying its responsible causes. Generally, the following methods can be applied to solve conflict:
1. Problem solving
Various types of conflicts can emerge in distribution channel. They should be solved as soon as possible. Problem solving method is one of many methods. According to this method, all the channel members sit together, interact and find a common solution of the problem. Channel leader or any other members can also do such work.
2. Goal modification
Channel conflict can also be solved by modifying goal. Under this method, all the channel members sit together, scrutinize the causes of the conflict and new goal is formed. Such goal should be accepted by all channel members.
3. Persuasion
Channel conflict can be solved by clearly interpreting subject matter or persuading the channel members. Under this, channel leader persuades and calls all channel members to work for the interest of group members. In this method, the channel leader uses his power to persuade or convince the members and solve the conflict.
4. Bargaining
In this bargaining method, all the channel members sit together, discuss the responsible causes for the conflict and agree on a new contract. Neutral member plays an important role in facilitating new agreement. Such agreement should be accepted by all the channel members, channel conflict is automatically solved. But, if the channel conflict is to be solved promptly, this method is not suitable.
5. Diplomacy
Conflict among channel members should be minimized at certain level or solved. Diplomatic behavior of management helps in solving conflict. When the conflict appears, the management should give notice or information to all the channel members that it will be properly solved finding out the responsible causes. Because of mannered conduct, equal behavior, evidential logics of the management, channel members feel satisfied by which the conflict can be slowly tapered down.
6. Improvement in communication
Distribution channel also needs different information and notices. So, information should be clear, meaningful, and simple. Due to weak information system, conflict arises in channel. Such conflict can be tapered down through improvement in information system. But improvement in communication should be on both sides. Otherwise information becomes meaningless.
You may also like to read:
No comments:
Post a Comment