ch04.docx
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ch04.docx
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ch04
Chapter4
BEHAVIORALPROCESSESINMARKETINGCHANNELS
ChapterObjectives
Thischapternotesthatchannelconflictisaninherentbehavioraldimensioninmarketingchannelsandispervasivebecauseitstemsfrommanycausessuchasroleincongruities,resourcescarcities,perceptualdifferences,expectationaldifferences,domaindifferences,goalincompatibilityandcommunicationdifficulties.Themanagementofchannelconflictinvolvesthreetasks:
(1)detectingchannelconflict,
(2)appraisingtheeffectsofconflict,and(3)resolvingtheconflict.
Thechapterthengoesontodefinethefivetypesof“power”andtheirdefinitions.Thedefinitionofthevarious“roles”playedbychannelmembersaredescribedandthechapterdelineateseach“role”forachannelmemberintheprocess.Thechapterendsreviewingthecommunicationprocessforchannelmembersandhowthebehavioraldifferenceswithinthechannelinhibitsthecommunicationprocess.
Learningobjectives
1)Themarketingchannelcanbeviewedasasocialsystemaswellasaneconomicone.
2)Behavioralprocesses,suchasconflict,power,role,andcommunicationareinherentbehavioraldimensionsinmarketingchannels.
3)Howconflictemergesinmarketingchannels.
4)Whatarethemajorcausesofchannelconflict?
5)Recognizethemajorissuesinvolvedinmanagingchannelconflicts.
6)Becomefamiliarwiththeconceptofpowerasitappliestothemarketingchannel.
7)Beawareofthebasicresearchfindsconcerningtheuseofpower.
8)Bealerttotheconceptanduseofrolesinmarketingchannels.
9)Haveanappreciationforhowbehavioralprocessescandistorttheflowofcommunicationsinthemarketingchannels.
ChapterTopics
1)TheMarketingChannelasaSocialSystem
2)ConflictintheMarketingChannel
3)PowerintheMarketingChannel
4)RoleintheMarketingChannel
5)CommunicationProcessesintheMarketingChannel
ChapterOutline
TheMarketingChannelasaSocialSystem
KeyTermandDefinition
▪SocialSystem:
Thesystemgeneratedbyanyprocessofinteractiononthesocioculturallevelbetweentwoormoreactors.Theactoriseitheraconcretehumanindividual(aperson)oracollectivity.
Whentheseindividualsorcollectivities(firmsoragencies)interactasmemberofthemarketingchannel,aninterorganizationalsocialsystemexists.
ConflictintheMarketingChannel
Conflictexistswhenamemberofthemarketingchannelperceivesthatanothermember’sactionsimpededtheattainmentofhisorhergoals.
A)ConflictversusCompetition
Conflictinthemarketingchannelshouldnotbeconfusedwithcompetition.Competitionisbehaviorthatisobject-centered,indirect,andimpersonal.
Conflict,ontheother-hand,isdirect,personal,andopponent-centeredbehavior.
B)CausesofChannelConflict
Analysisandresearchhavepointedtomanypossiblecausesofchannelconflict.Theseare:
a.Misunderstoodcommunications
b.Divergentfunctionalspecializationsandgoalsofchannelmembers
c.Failingsinjointdecision-making
d.Differingeconomicobjectives
e.Ideologicaldifferencesofchannelmembers
f.Inappropriatechannelstructure
Althoughtherearemanycausesofchannelconflictmostcanbeplacedintooneormoreofthefollowingsevencategories:
1.Roleincongruities
2.Resourcescarcities
3.Perceptualdifferences
4.Expectationaldifferences
5.Decisiondomaindisagreements
6.Goalincompatibilities
7.Communicationdifficulties
1.Roleincongruities:
Membersofthemarketingchannelhaveaseriesofrolestheyareexpectedtofulfill.Ifamemberdeviatesfromthegivenrole,aconflictsituationmayresult.
2.Resourcescarcities:
Sometimesconflictstemsfromadisagreementbetweenchannelmembersovertheallocationofsomevaluableresourcesneededtoachievetheirrespectivegoals.Acommonexampleisbetweenmanufacturersandretailersover“houseaccounts”.Anotherexampleinvolvessiteselectioninfranchisedchannels.
3.Perceptualdifferences:
Perceptionreferstothewayanindividualselectsandinterpretsenvironmentalstimuli.Thewaysuchstimuliareperceivedareoftenquitedifferentfromobjectivereality.
4.Expectationaldifferences:
Variouschannelmembershaveexpectationsaboutthebehaviorofotherchannelmembers.Theseexpectationsarepredictionsorforecastsconcerningthefuturebehaviorofotherchannelmembers.Sometimestheseforecaststurnoutinaccurate,butthechannelmemberwhomakestheforecastwilltakeactionbaseduponthepredictedoutcomes–thuschannelconflict.
5.Decisiondomaindisagreements:
Channelmembersexplicitlyorimplicitlycarveoutforthemselvesanareaofdecision-makingthattheyfeelisexclusivelytheirs.Hence,conflictsariseoverwhichmemberhastherighttomakewhatdecisions.
Theareaofpricingdecisionhastraditionallybeenapervasiveexampleofsuchconflict.
6.Goalincompatibilities:
Eachmemberofthemarketingchannelhashisorherowngoals.TheopeningvignetteofthechapterconcerningAisanexampleofsuchincompatiblegoals.
Amazonistryingtosellasmuchmerchandiseaspossiblefromwhateversourcesprovidethemostrevenueandprofitstothem.TheCD,bookorelectronicsfirmwhoadvertisesthroughAwantsAtoselltheirnewproducts.
7.Communicationdifficulties:
Communicationisthevehicleforallinteractionsamongchannelmembers,whethersuchinteractionsarecooperativeorconflicting.Anyfoul-uporbreakdownincommunicationscanquicklyturncooperationintoconflict.
C)ChannelConflictandChannelEfficiency
KeyTermandDefinition
▪Channelefficiency:
Thedegreetowhichthetotalinvestmentinthevariousinputsnecessarytoachieveagivendistributionobjectivecanbeoptimizedintermsofoutputs.
Thegreaterthedegreeofoptimizationofinputsincarryingoutadistributionobjective,thehighertheefficiencyandviceversa.
i.NegativeEffect–ReducedEfficiency
Figure4.1showsthatasthelevelofchannelconflictarisesthelevelofchannelefficiencydeclines.
ii.NoEffect–EfficiencyRemainsConstant
Figure4.2showsthattheexistenceofchannelconflicthashadnochangeinchannelefficiency.
Thistypeofrelationshipisthoughttoexistinchannelsthatarecharacterizedbyahighlevelofdependencyandcommitmentamongchannelmembers.
iii.PositiveEffect–EfficiencyIncreased
Figure4.3showswhereconflictcausesanincreaseinchannelefficiencywherebothpartiesexaminedtheirrespectivepositionsandagreedtomodifykeyattributesinordertoachievetheirrespectivedistributionobjectives.
Theresultofthistwo-partyreappraisalisareallocationofinputsbaseduponthecomparativeadvantagesofeachchannelmemberforperformingthedistributiontasksnecessarytoachievetheirrespectivedistributionobjectives.
iv.ConflictandChannelEfficiency–GeneralCurve
Figure4.4showsanexampleofthecombinationofallthreecurvesandthepossibleeffectonchannelefficiency.Notetostudentsthatonceathresholdisreached(C2)additionalchannelconflictwillresultindecreasedchannelefficiency.
D)ManagingChannelConflict
Therearefourgeneralizationsregardingchannelconflict:
1.Conflictisaninherentbehavioraldimensioninthemarketingchannel.
2.Giventhenumerouscausesfromwhichconflictmaystem,itisapervasivephenomenoninmarketingchannels.
3.Conflictcanaffectchannelefficiency.
4.Variouslevelsofconflictmayhavebothnegativeandpositiveeffectsonchannelefficiency,orpossiblynoeffect.
Channelmanagersmust:
1.Detectconflictsorpotentialconflicts
2.Appraisethepossibleeffectsofconflicts
3.Resolvechannelconflict
1.Detectchannelconflict:
Channelmanagerscandetectpotentialconflictareasbysurveyingotherchannelmembers’perceptionsofhisorherperformance.Suchsurveyscanbeconductedbyoutsideresearchfirms,ortradeassociations.
Table4.1showsanexcerptfromIndustrialDistributionMagazine.
Themarketingchannelauditisanotherpossibleapproachofuncoveringpotentialconflictbetweenchannelmembers.Thetermchannelauditsuggestsaperiodicandregularevaluationofkeyareasoftherelationshipofagivenchannelmemberwithothermembers.
Distributors’advisorycouncilsorchannelmembers’committeesofferanotherapproachtoearlyconflictdetection.Thesegroupsconsistoftopmanagementrepresentativesfromeachlevelofthechanneldistributionsystem.
Thecommonthemeofearlydetectionofchannelconflictisthis:
channelmanagersneedtomakeaconsciousefforttodetectconflictoritspotentialiftheyexpecttodealwithitbeforeitdevelops.
2.Appraisingtheeffectofconflict:
Agrowingbodyofliteraturehasbeenemergingtoassistthechannelmanagerindevelopingmethodsformeasuringconflictanditseffectonchannelefficiency.
Forthepresent,mostattemptstomeasureconflictandappraiseitseffectsonchannelefficiencywillstillbemadeataconceptuallevelthatreliesonthemanager’ssubjectivejudgment.
3.Resolvingconflict:
Whenconflictexistsinthechannel,thechannelmanagershouldtakeactiontoresolvetheconflictifitappearstobeadverselyaffectingchannelefficiency.
Threetechniquesaresuggested:
▪Achannelwidecommittee,asortof“crisismanagementteam”
▪Jointgoalsettingbycommittee
▪Adistributionexecutivepositioncreatedforeachmajorfirminthechannel.Theindividual(s)fillingthispositionwouldberesponsibleforexploringthefirm’sdistribution-relatedproblems.
Anotherapproachtoresolvingchannelconflictisbyarbitration.
Whatismoreimportantthanthespecificsofanyoftheseparticularapproachesistheunderlyingprinciplecommoninallofthem:
creativeac
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