Directorate of distance education

Modifying Channel Arrangements
Periodic modification to meet new conditions in the marketplace. 
Modification is necessary when:
➢ Distribution channel is not working as planned.
➢ Consumer buying patterns change.
➢ Market expands.
➢ New competition arises.

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Notes
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➢ Innovative channels emerge.
➢ Product moves into later stages in the product life cycle.
3 levels of channel adaptation can be distinguished:
1. Adding or dropping individual channel members.
2. Adding or dropping particular mkt channels.
3. Developing a totally new way to sell goods in all markets.
Conventional Marketing Channel
➢ Comprises an independent producer, wholesaler(s) & retailer(s).
➢ Each is a separate entity.
➢ No channel member has complete or substantial control over the 
other members.
Roles of Individual Firms in the Channel
➢
Insiders
. Members of the dominant channel.
➢
Strivers
. Firms seeking to become insiders.
➢
Complementers
. Not part of the dominant channel
➢
Transients
. Outside the dominant channel & do not seek 
membership. Short-run expectations.
➢
Outside innovators
. Real challengers & disrupters of the dominant 
channels.
Channel Cooperation, Conflict & Competition
Types of Conflict & Competition
➢
Vertical
channel conflict exists when there is conflict between 
different levels within the same channel.
➢
Horizontal
channel conflict exists when there is conflict between 
members at the same level within the channel.

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Notes
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➢
Multichannel
conflict exists when the manufacturer has established 
two or more channels that compete with each other in selling to the 
same mkt.