Premier department store, David Jones, terminated its arrangements with Country Road for the supply of clothing after Country Road became increasingly involved with discounting at Country Road stores and also distributing via Direct Factory Outlets (DFOs). David Jones believed that Country Road's distribution activities were not only a direct source of direct competition, but were also inconsistent with David Jones' carefully crafted image as a prestige brand. This is an example of:
A) a power struggle.
B) selective distribution.
C) exclusive dealing.
D) channel conflict.
E) none of the above

Question

Quizplus · Accepted Answer

This is a clear example of channel conflict, where two channel members (David Jones and Country Road) have conflicting interests and activities that lead to termination of their relationship. David Jones ends its arrangement with Country Road due to its direct competition through discounting and distribution via DFOs, which is not in line with David Jones' prestige brand image.

Premier Department Store, David Jones, Terminated Its Arrangements with Country