By Garima Mehra on May 24, 2024

The market has very high competition these days, which can be attributed to factors like globalization and changes in technology. This is because companies can enter any market due to globalization. There are no prohibitions on the same. So, the local competitors have to worry about competitors from abroad who have better experience. When the market has so much demand, the businesses can’t meet it. Hence, other businesses create similar products to meet this increased demand. Businesses also are finding it easy to market their products due to social media and internet. But all these sources of marketing are available to all businesses, hence getting the attention of customers is now a big problem.

What are channel conflicts?

Channel conflicts can occur when there are problems between the different people involved in the distribution of a product, such as retailers, distributors, etc. Horizontal channel conflicts happen when there is a conflict between the same level of sellers of the same good. For example, retailers of the same manufacturer might compete aggressively to sell goods in the market. This can lead to them slashing the prices, causing a loss to the manufacturer.

Vertical channel conflict happens when two different distribution levels of the same manufacturer have a conflict with each other. This happens when the manufacturer starts selling goods at high prices to the retailers. It can also happen that a manufacturer decides to sell products to the consumers himself, causing problems for the retailers. The manufacturer might not offer any support to the retailers also. Most of the manufacturers have gone online also withdrawing the use of retailers. Since their use of retailers has lessened, this has been a big issue for the latter. Vertical channel conflict can also happen between distributors and retailers, since the former might sell goods to them at high prices.

Multichannel conflict can happen when a manufacturer has multiple ways to reach the consumer, and this can cause price conflict. For example, he might have retailers selling his goods offline, and he is himself directly selling to consumers online at low prices. Consumers get confused about where to buy from, online or offline, from the retailer. Retailers might be selling goods at higher prices than online. In such a scenario, prices should be the same for online and offline selling.

Apart from price wars, there can also be other kinds of problems in case of such channel conflicts. There can be problems when two retailers compete in the same area as to who will sell in which territory. Sometimes, some intermediaries get better promotional support from the manufacturer.

Better advertisement: Sales training is a critical part of such promotional support. It includes advertising allowances in which the retailers are reimbursed for all or some of the money they spend on advertising whether it is in newspapers, on radios, or even sponsored ads on social media. When the intermediaries like the distributors and retailers are given some sales training, they can run effective ads on such mediums keeping in mind the ROI.

Better promotion:Manufacturers can also help the intermediaries with promotional material which can boost sales. Since the promotional material is provided by the manufacturer, it is uniform everywhere and encourages the formation of a brand image in customer’s minds. These are point-of-the-sales displays such as posters, banners, and display stands. Using such displays is good for manufacturers to ensure that wherever sales happen, there are the same marketing materials. Sales training can help intermediaries how to make the best use of such materials for attracting customers to the store.

Price reductions: Temporary price reductions or rebates are offered to channel partners to encourage them to stock and promote certain products. These discounts can also be passed on to the end consumers.

Price reductions are also important for manufacturers to increase sales. Retailers also tend to buy more of these goods because they are cheaper now. It’s because when such reductions happen, the intermediaries sell the goods at cheaper prices.

Better territorial management:Sales training can help in the avoidance of conflicts between channel partners, It can make sure that the intermediaries have a coherent idea about the pricing and selling rights in territories. This ensures that no conflicts can arise between intermediaries regarding selling rights and prices. They also become clear about the promotions of products, like what kind of displays are to be used. So, with sales training, it can be ensured that no retailer is selling goods at cheaper prices than the other retailer. Territory management is also important for the manufacturers to avoid conflicts between channel partners. They don’t sell in the territories of other partners. When two partners sell in the same area, it can lead to reduced profits for both. But with proper management of territories taught in sales training, such situations of territory overlapping can be avoided.

Better product knowledge: Sales training also involves imparting product knowledge to the various intermediaries. Since all the intermediaries know about the product, there is bound to be no confusion, and they all impart the same knowledge to the customer. It can cause a lot of issues when every retailer has different product knowledge, and the customer does not know from whom to buy. The company can offer product training through various modes such as webinars, in-person training, videos, and resources like product bytes, and pamphlets to learn about features.

Incentive schemes: The sales training can also ensure that the channel partners understand how the incentives will be distributed. When the channel partners communicate quite well about the incentive schemes, they know why they have been paid so much incentive and don’t engage in conflicts with other partners over incentives. Hence, transparency regarding incentives is necessary.