Chapter 25 Chapter 23 Effectively resolve channel conflicts

A producer must regularly check and improve his channel arrangement.Channel improvements are necessary when channel members are not working as planned, when consumer buying patterns change, the market shifts, or a product enters the final stages of its life cycle. Some distributors join the enterprise's channel network and become channel members of the enterprise, which only means that these middlemen have the right to distribute the products of the enterprise in accordance with the provisions of the contract, but they cannot guarantee that the channel members can effectively perform the distribution tasks, especially the channel members. due cooperation.As far as channel management is concerned, it is the challenge to urge channel members to cooperate with each other, resolve conflicts and problems in channel cooperation, and ensure that distributors can effectively complete the company's distribution tasks.

In March 1998, seven large shopping malls in Jinan's business community jointly refused to sell Changhong color TVs.The reason is that the shopping mall believes that Changhong's products are of poor quality and the after-sales service cannot keep up, which has seriously affected the reputation of the shopping mall and dragged down the revenue of the shopping mall.According to industry insiders, the real reason is that Changhong has different "policies" for various dealers in Jinan area, and its sales policy makes these seven shopping malls only enjoy small profits.The businessman failed to negotiate with Changhong, so this "collusion" behavior appeared.

Although Changhong took timely countermeasures, its brand was seriously damaged: Many consumers listened to the merchant's statement about the "truth" and did not buy Changhong color TVs. This situation lasted for more than a month. In fact, the key to the conflict between the two parties is the most sensitive and complex interest relationship.The market is getting harder and harder.While the expenses of manufacturers and merchants soared, their operating risks increased sharply.Both sides have the idea of ​​passing the risk to the other side.There are many similar conflicts: Some merchants seize the manufacturers' psychology of relying on their golden signs to expand sales, implement the consignment sales method of forcing manufacturers to supply goods, and return the goods if they cannot be sold, and ask for various sponsorships from suppliers who enter the store Fees, security deposits, store celebration fees, promotional fees and many other expenses.Merchants generally default on funds to manufacturers, especially large shopping malls, which often threaten manufacturers with payment for goods, forcing manufacturers to submit.While enduring the "big shop bullying", manufacturers adopt the strategy of "walking on two legs". On the one hand, they rely on merchants to open up the market, and on the other hand, they start to build their own sales network. partnership.

In view of the above inevitable conflicts in the cooperation process, manufacturers need to strengthen the management of distribution channels.Specifically, channel management can be done well in the following aspects: 1.When selecting members of the distribution channel, choose middlemen who are suitable for distributing the products of the enterprise, so as to promote the distribution of products. 2.Carry out strict supply management for distributors to ensure timely supply, and help distributors establish and straighten out sales networks to disperse sales and inventory pressure, thereby speeding up the circulation of goods.

3.Strengthen the support for dealers' advertising and promotion, reduce the resistance of commodity circulation; improve the sales force of commodities and promote sales; improve the utilization rate of funds, making it an important source of profit for dealers. 4.Guarantee the interests of dealers, on the basis of ensuring timely supply, provide dealers with various product services and technical support, properly handle product damage and deterioration, customer complaints, customer returns and other issues in the sales process, and effectively protect dealers interests are not unnecessarily harmed.

5.Strengthen the management of order processing, and try to avoid poor delivery caused by mistakes in the process of processing dealers' orders. 6.Strengthen the settlement management of dealers' orders, avoid settlement risks, and protect the interests of enterprises.At the same time, avoid dealers using settlement convenience to create market confusion. 7.Manage other tasks in the distribution process, including training dealers; strengthen dealers' recognition of the company's philosophy and values, and master and understanding of product knowledge; at the same time, pay attention to coordinating the relationship between channel members and handling the relationship between them. contradictions; and the coordination and control of the entire distribution channel.

In the process of distribution channel management, the manufacturer should participate in the operation and management of the dealers and give certain sales support, so as to ensure that the dealers can invest more energy in the sales of the company's products and cooperate more closely with the dealers , so as to effectively avoid the conflict between the two sides. Manufacturers want channel collaborations that generate higher overall channel profits than separate channels. Vertical channel conflict refers to the conflict between different levels of enterprises in the same channel, which is more common than horizontal channel conflict.For example, some wholesalers may complain that production companies control prices too tightly, leaving too little profit space for themselves, and provide too few services (such as advertising, sales promotion, etc.); There may be similar dissatisfaction.Avon and its distributors inevitably face similar conflicts.

Avon's business model in China is not purely single-level direct sales, but more inclined to the business model of wholesale and retail stores, because it does not form a team of salesmen, nor does it have a collective incentive mechanism for salesmen, and its main Income comes from specialty stores and counters.Even among the 6,000 specialty stores that demonstrate Avon's "most thorough transformation", 95% of the stores are authorized franchise stores. That is to say, what Avon and its dealers have formed is a relatively loose "super organization" mainly focusing on franchise and franchise, and its biggest feature is that members maintain different and relatively independent target systems.Out of the consideration of improving efficiency and saving costs, both Avon and distributors have made efforts to contribute to the overall goal of the channel.However, each distributor has its own propositions and requirements on how to achieve the overall goal of the channel.

As the only company in the Chinese market that has obtained a "license" for direct selling pilots, Avon certainly hopes to expand its market share in China and demonstrate its advantages in direct selling through direct selling pilots, so as to improve its competitiveness and realize its long-term development strategy.However, dealers regard the direct selling pilot qualification as an "ominous omen", believing that the direct selling pilot not only lowered their sales expectations, but also made a considerable amount of inventory a heavy burden, and paid for the expensive fixed investment upfront. Dongliu...

As the upstream, Avon headquarters naturally hopes to maintain the coexistence of direct sellers and distributors, and jointly provide high-quality services for Avon's end consumers.However, this seems to be just Avon's wishful thinking. The channel conflicts caused by the differences in goals between it and distributors are testing the marketing skills and channel management capabilities of Avon's senior management. The conflict between Avon and distributors is a typical vertical channel conflict.Vertical channel conflicts are also referred to as upstream and downstream channel conflicts. On the one hand, more and more distributors are selling goods through the combination of direct sales and distribution for their own interests. This will inevitably compete with downstream distributors for customers. It dampens the enthusiasm of the downstream channels; on the other hand, when the strength of the downstream dealers increases, they are dissatisfied with their current position, hope to have greater rights in the channel system, and challenge the upstream channels.This leads to conflicts between upstream and downstream.

In some cases, in order to promote their products, manufacturers may skip the first-tier distributors and directly supply the second-tier distributors, which on the other hand intensifies the conflict between the upstream and downstream channels.Therefore, manufacturers, including Avon, need to consider the overall situation, properly resolve vertical channel conflicts, and promote better cooperation among channel members. No matter how a channel is designed and managed, there will always be some conflict.Most conflict is dysfunctional, and the question is not whether to eliminate it but how to better manage it. In addition to conflicts between manufacturers and distributors, there may also be conflicts among distribution member companies at the same channel level.In the same channel model, intermediaries at the same level may compete for the market, and thus face conflicts.For example, if a company has too many franchised stores and the distance between them is too close, everyone's profits will be reduced, and there will inevitably be conflicts between them. Avon was once synonymous with single-level direct selling.However, after more than 100 years of development, Avon has completely resembled a traditional cosmetics company. Her soaring performance and improved brand image have made many big-name cosmetics companies treat her as a real opponent up.Counters, specialty stores and supermarkets almost all have the shadow of Avon, and have achieved good results. Avon lets different members of the channel play different roles.Each channel member has its own field and scope of activities, and each channel member will fight for an exclusive decision-making area for himself.At present, Avon's sales revenue mainly comes from shopping mall counters and specialty stores, which are the main force for Avon to serve customers and promote Avon's development. However, Avon, which has always insisted on "direct sales", will have a huge impact on these special counters and specialty stores, and may completely break the current situation of clear division of labor.Since salesmen can go directly to the company to get goods, direct sales can reduce various direct or indirect costs, so direct sellers will have more price advantages.At the same time, because Avon has always implemented a strict "performance management" system in human resource management and implemented quantitative performance indicators, Avon store salesmen may take away a large number of store consumers after the transformation.This may lead to the fact that Avon products will completely skip dealers and be sold through direct sales personnel, and specialty stores and special counters may become places where Avon products are displayed for free and defective products are returned for free. Although Avon has repeatedly insisted that the direct selling pilot system is completely independent of the franchise store operation system, the franchise stores will operate normally no matter in the pilot area or in the non-pilot area.However, it is undeniable that the pilot program of direct selling has impacted the original and well-defined fields in various aspects.Dealer returns are only a superficial problem, and the deep-seated problem is the conflict of interests between the new and old channels caused by the field conflicts of members.After this battle, it will be one of Avon's indispensable and important agendas to redefine the field of members so as to achieve effective management of channel conflicts. Like Avon’s lessons learned, the reason for level conflicts is that the production enterprises did not make a reasonable plan for the number of intermediaries in the target market, so that the intermediaries competed with each other for their own interests. After the production enterprises have opened up a certain target market, the middlemen must strive for more market share in order to obtain more benefits, and have to start the "enclosure campaign" in the limited target market.For example, an intermediary dealing in the products of company A in a certain area may think that another intermediary dealing in the products of company A in the same area is too aggressive in terms of pricing, promotion and after-sales service, and robs them of their business.If such contradictions occur, the production enterprise should take effective measures in time to alleviate and coordinate these contradictions, otherwise, it will affect the cooperation of channel members and the sales of products.In addition, manufacturers should plan ahead and take corresponding measures to prevent these situations from happening. Multi-channel conflict arises when a manufacturer has established two or more channels through which products are sold to the same market.For multi-channel conflicts, companies can try to add an e-commerce channel. With the continuous increase of customer segments and available channels, more and more enterprises adopt multi-channel marketing system, that is, use channel combination and integration.Most manufacturers have established two or more channels through which they sell their products to the same market.Therefore, there is also a conflict between multiple channels. Since the transformation in 1998, Avon's distributors have made indelible contributions to the development of Avon in China.It is these authorized stores that bring Avon China's annual sales growth rate of 40%. In 2004, among Avon's sales of more than 2 billion yuan in China, the contribution from specialty stores reached 70%. However, Avon insists on direct selling, and its direct selling operation needs a large number of salesmen to demonstrate its biggest competitive advantage. In order to adapt to the new rules of the direct selling game, Avon has to gradually reduce its dependence on dealers and focus on sales promotion instead. In the eyes of dealers, the training of employees is almost a taste of "crossing the river and tearing down the bridge".Where will dealers be placed?Are the special counters and specialty stores in shopping malls just for beauty or product display?Or just a dropshipping pick-up point just for Avon?Dealers who have invested a certain amount of fixed funds in the early stage have suffered serious setbacks. The pilot program of direct selling will cause a fatal blow to the store's performance, and even salesmen in some specialty stores have used specialty stores to sell products directly.Direct sellers can now pick up goods directly from Avon, which has led to a sharp decline in sales at specialty stores.The multi-channel conflict between personal selling and traditional distributors is a pain in Avon's business model transformation, but it is hard to avoid. In addition, with the in-depth development of Avon's direct sales pilot, online direct sales, one of the main methods of direct sales, is gradually becoming one of the important contents in the blueprint of Avon's direct sales empire.Moreover, the ever-changing Internet technology, modern logistics technology, and modern marketing technology also provide a strong material guarantee for online direct sales.However, it was the introduction of online direct sales that while consolidating Avon's direct sales empire, it also had a severe impact on existing channels (including personal sales and store sales).A few years ago, after Avon introduced the online store, many dealers even expressed strong resistance by returning the products. Since Avon will still be in the transformation stage of its business model in the next few years, and the direct sales process in China is also a gradual process, therefore, exclusive stores (special counters), personal sales, online direct sales, etc. will coexist in Avon's business within a certain period of time. In the sales network, different channels have different interests, so multi-channel conflicts will be difficult to avoid. This is a major test of Avon's marketing technology and management capabilities. After a production company establishes a multi-channel marketing system, the conflicts that arise when different channels serve the same target market are what we call "multi-channel conflicts."For example, Levi's jeans in the United States were originally sold through special dealerships. When it decided to include Sears and J.C. Penney as its distribution partners, the special dealerships naturally expressed strong dissatisfaction. The conflict between different channels is especially strong when a certain channel lowers the price (usually occurs in the case of mass purchases) or reduces the gross profit.Therefore, production enterprises should pay attention to guiding channel members to compete effectively, prevent excessive competition, and coordinate. No matter how well the channel is designed and managed, there will always be some conflicts, the most basic reason being that the interests of various independent business entities cannot always be aligned.All marketing channels have the potential for channel conflict and competition from inconsistencies in goals, unclear mandates and powers, differences in perception, and high interdependence. Distribution channel conflict refers to a situation in which one member of a distribution channel regards another member as an enemy, and injures, tries to obstruct, or obtains scarce resources on the basis of harming the member.That is to say, all channels in which one or several parties of relevant members take advantage of certain advantages and opportunities to take certain hostile actions against another or several members can be considered channel conflicts.In every channel system, conflicts often arise between channel members.The root of the conflict lies in the inherent interdependence among the channel members. The stronger the interdependence among the members, the greater the chance that they will be interfered by other channel members in their actual goals, and the greater the possibility of conflict. Big. Just as channel conflicts are ubiquitous in the social system, channel conflicts in the field of mobile communications are also an objective phenomenon in channel relations. It cannot be eliminated or eradicated, but if ignored, it will intensify.Therefore, we should have sufficient understanding and necessary preparations for the objective existence of channel conflicts, actively prevent, avoid and deal with channel conflicts, and control them within an appropriate and controllable range to ensure the health and safety of channels. run efficiently. The competition in the field of mobile communications has broken through the boundaries of a single enterprise and extended to the entire value chain, which is more directly manifested in the competition between distribution channels in the market. The distribution channel of the mobile communication industry is gradually formed in the long-term competition, with the operating enterprise as the core, and a comprehensive system composed of a series of complex economic organizations.In a diverse and mixed hierarchical structure, conflicts among members exist objectively and are unavoidable.Benign conflicts in an appropriate range can promote competition and cooperation among channel members, but vicious and large-scale conflicts will affect channel efficiency at least, and lead to the collapse of the channel system at worst. China Unicom's distribution channel system is affected by its causes, structure and market policies in different periods, and the possibility of conflicts among channel forms, levels and members is relatively high.Different profit drivers and different levels of difficulty in marketing will lead to channel conflicts.Therefore, it is of great significance to deal with channel conflicts in a timely and appropriate manner to avoid internal friction, improve efficiency and win the market. Moderate conflict is a powerful motivating force, forcing management to look actively at management and find ways to improve the efficiency of its activities.But too many conflicts are not conducive to the harmonious development of the channel system, and may even have disastrous consequences, causing irreparable losses to the enterprise. Therefore, when there are conflicts among channel members, managers should take corresponding measures to prevent the occurrence of vicious conflicts and design certain strategies to facilitate conflict resolution. Through contradiction analysis, the enterprise can find out the defects of the incentive and restraint mechanism in the channel, which is conducive to improving the incentive methods and methods, so as to increase the channel members' interest in joint cooperation and encourage members to strengthen cooperation. At the same time, it can also control channel conflicts. , Discover the deficiencies in the construction of the channel structure, which will help plug the loopholes, eliminate internal friction factors, and ultimately help improve the management of marketing channels. Certain channel conflicts can be constructive.It can lead to more dynamics of the changing environment.Of course, more conflict is dysregulated. Although some channel conflicts are beneficial to the development of enterprises, for example, they can lead to the adaptation of enterprises to the environment. This kind of conflict is a benign conflict, but more conflicts are vicious, which will lead to a decline in market share and damage to the interests of dealers. .Therefore, corporate marketers need to better manage conflict rather than try to eliminate it. Haitian Company is a large and medium-sized enterprise with a history of more than 100 years. Its core business is the production of condiments (such as soy sauce, monosodium glutamate, vinegar, seasoning sauce, etc.).Its soy sauce has a large market share and can be described as the leader in the domestic condiment industry. Seasoning is a necessity in people's daily life, and this close relationship with people's daily life makes it difficult for this product to adopt a high price strategy.In the condiment market, on the one hand, due to the invasion of foreign brands, local protectionism in various regions and people's long-term habit of consuming local products, the market competition for condiments is very fierce. The scattered market areas require Haitian Company to provide more Sales staff, who provide more services to distributors.On the other hand, most of the distributors are self-employed, and each distributor conflicts with each other. The company's capital recovery speed is relatively slow, and sales profits are also very thin. In order to change this situation, the company decided to increase the development of distributors (wholesalers), improve the management and guidance of distributors, adopt a wider selective distribution strategy, and use the resources of many distributors to increase market development. strength. In addition, with the strengthening of Haitian's strength and reputation, the company has changed its past practice of free marketing and agency sales, and its price strategy has reduced credit support for distributors. The speed at which funds are withdrawn.However, the new policy led to more and more conflicts in the process of sales channel development and management. The conflict between the company's sales department and distributors is mainly reflected in two aspects: 1.conflict of interest.Distributors want to develop the market and hope that Haitian can do more local advertising, but at the same time they don't want to reduce the profits of distributors.As a cost expenditure, advertising investment will inevitably lead to a decline in the company's profits to distributors, and the contradiction of "fame and fortune" is very prominent. 2.Conflict of Payment Conditions.The company's "cash-and-stock" approach has angered distributors in some regions. In addition, there are also problems among distributors: one is that they do not abide by the rules of the game, and distributors penetrate each other and conduct cross-regional sales.The second is not to follow the guiding wholesale price stipulated by the company, and sell at a lower price in order to seize the market, forming a certain degree of vicious competition.And between distributors (wholesalers) and retailers there are also conflicts in terms of benefit distribution and settlement methods.In addition, large supermarkets also require the so-called entry fee, which also causes conflicts, and distributors often transfer this conflict back to the company and ask the company to resolve it (such as requiring the company to pay the entry fee). This is a typical case of failure to deal with channel conflicts. The channel conflicts of Haitian Company are mainly caused by the inconsistency of goals. The company hopes to use distributor resources to develop the market, and expects to be able to cash in stock, but this practice just damages distribution. When dealing with such conflicts, the company should adopt methods such as communication, mediation, and negotiation to reach consensus with distributors and set common goals, rather than unilateral actions.Specifically, we can resolve conflicts and problems in the channel in the following ways: 1.Super target.Super goals refer to channel members working together to achieve goals that cannot be achieved individually, including channel survival, market share, high quality, and customer satisfaction.Fundamentally, super goals are goals that cannot be undertaken by a single company and can only be achieved through cooperation.Generally, only when the channel is threatened, the joint realization of the super goal will help to resolve the conflict, and it is necessary to establish the super goal. 2.Personnel exchange.Personnel exchange is the best way to resolve vertical conflicts. For example, let some sales executives of the manufacturer go to some dealers for a period of time, and some dealer leaders can work in the field where the manufacturer formulates policies about dealers.After exchanging personnel, it can provide a place to put yourself in the other party's shoes and consider issues, which is convenient for dealing with some vertical conflicts on the basis of determining common goals. 3.Effective information sessions.Holding effective information sessions is also a good way to deal effectively with vertical conflicts.A number of trade associations have been established in many industries, including marketing channel companies.To some extent, all channels of communication are designed to avoid or reduce conflict.Use Manufacturer Sales Agents to pass the message between the manufacturer and the seller that they have achieved their respective goals while working toward a common goal.Sales agents can often be understood as channel problem solvers. 4.Mediation.The resolution of conflicts through mediation is actually mediation by a neutral party according to the interests of both parties. 5.negotiate.The goal of coordination, like mediation, is to stop conflict among members.Compromise may prevent conflict from erupting, but it cannot address the root causes of conflict.Negotiation is a way for channel members to bargain.In the negotiation process, each member will give up something, so as to avoid conflicts. 6.arbitration.The use of arbitration means that the parties agree and accept that the arbitration decision will be made by a third party.Perhaps the arbitrator will make a proposal, which may not be acceptable to both parties.The use of arbitration to solve problems is very common, but in fact it often fails to solve the problem.At this time, both parties to the conflict can resort to the law.