Essentials of Marketing 7th Edition by Charles Lamb,Joe Hair,Carl McDaniel

Exercise 12

Explain channel leadership, conflict, power, and partnering. Power, control, leadership, conflict, and partnering are the main social dimensions of marketing channel relationships. Channel power refers to the capacity of one channel member to control or influence other channel members. Channel control occurs when one channel member intentionally affects another member's behavior. Channel leader- ship is the exercise of authority and power. Channel conflict occurs when there is a clash of goals and methods among the members of a distribution channel. Channel conflict can be either horizontal, between channel members at the same level, or vertical, between channel members at different levels of the channel. Channel partnering is the joint effort of all channel members to create an integrated system that serves customers and creates a competitive advantage. Collaborating channel partners meet the needs of consumers more effectively by ensuring that the right products reach shelves at the right time and at a lower cost, boosting sales and profits.
9.1 Procter Gamble and Wal-Mart are key partners in a shared channel. P G is one of Wal-Mart's biggest suppliers, and Wal-Mart provides extremely detailed scanner data about customer purchases of P G products. Wal-Mart has begun selling its own brand of Sam's Choice laundry detergent in bright orange bottles alongside P G's Tide, but for a greatly reduced price. What do you think will be the impact of this new product on what has been a stable channel relationship?