Channel Conflict Resolution


Channel conflict arises when two different channels associated with a company attempt to sell to the same customer. For example, a company might want to increase online sales, anticipating that direct sales will result in higher profits. However, the company's established resellers are likely to become angry, believing that the company is now in competition with them and that it will have all of the advantages. The end result is that the company's sales are simply transferred from the resellers to the company's online store with no substantial increase in sales volume. The company fails to increase profitability because it now must spend money supplying the services previously performed by the resellers.

By assessing your channel management strategy and analyzing your product’s target markets, Manifest Marketing helps you create a channel marketing plan that maximizes sales and profits.


Problem: A major PC manufacturer was successfully selling both through direct sales and through a large computer retail chain. As the computer retailer’s sales force become more successful, channel conflict arose when both groups of sales people tried to underbid one another in order to win the business. This competition resulted in lost profitability for both the manufacturer and retailer.

Solution: A solution was uncovered by re-examining the strengths of both companies. The retailer excelled in immediate same-day service while the manufacturer provided large volumes of custom-configured product. Many end customers wanted to continue buying from both sale forces because they needed both quick service and the custom-configuration capability. Therefore, territory plans were developed to allow both sales teams to service customers. This provided a win/win solution for the manufacturer and the retailer, as well as the end customers.