A soft drink concentrate producer makes 20 percent margin on its regular soda and 25 percent on its diet version of the same drink. The soft drink bottlers, however, are required to sell both the regular and diet versions to the retailers at the same price. This is a classic example of

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Channel conflict arises when there's a disagreement or discord among channel members about how to achieve goals or how profits are distributed. In this case, the requirement for bottlers to sell both versions at the same price despite different margins from the concentrate producer can lead to disagreements or dissatisfaction, reflecting a conflict within the distribution channel.

A Soft Drink Concentrate Producer Makes 20 Percent Margin on Its