Behavioral Processes in Marketing Channels

Behavioral Processes in Marketing
Channels
Marketing Channel as Social System
Social System
• Generated by any process of

interaction on sociocultural level
• Between two or more actors
• Actor is individual or collectivity
=
Interorganizational
Social
System
Individuals or collectivities
Interacting within marketing channel
Behavioral Processes
Conflict Power
Roles
Communication
How Conflict Emerges
Cause When a channel member perceives

that another member’s actions impede the
attainment of his or her goals
Direct, personal, and

Behavioral trademarks
opponent-centered behavior
Causes of Channel Conflict
Role Incongruities
Resource Scarcities
Perceptual Differences
Expectational Differences
Decision Domain Disagreements
Goal Incompatibilities
Communication Difficulties
Conflict & Channel Efficiency
Does conflict Can conflict increase

decrease efficiency?
efficiency?
How does conflict

affect channel
efficiency?
Does conflict have

any affect?
Effects of Channel Conflict
Negative Effect: Reduced Efficiency
As the level of conflict increases,
Channel efficiency declines

No Effect: Efficiency Remains Constant
Exists in channels characterized by

high level of dependency among
members
Channel efficiency is not affected

Positive Effect: Efficiency Increased
Conflict might be impetus for either

or both members to reappraise their
policies
Channel efficiency increases

Managing Channel Conflict
Detecting
conflict
Appraising the
effect of
conflict
Resolving
conflict
Managing
Conflict
Detecting Channel Conflict
Regularly survey other members’

perceptions of firm’s performance
Perform marketing channel audit

OR
Form distributors’ advisory councils

OR or channel members’ committees
Appraising the Effect of Conflict
Subjective process that relies on

manager’s judgment
Resolving Conflict
Creative action on the part of some party

to the conflict is needed if the conflict is to
be successfully resolved.
Conversely, if conflict is simply “left alone,”

it is not likely to be successfully resolved
and may get worse.
Power in the Marketing Channel
The capacity of a particular channel

member to control or influence the
behavior of another channel member
Keys to understanding Power:

• Power Bases
• Use of Power Bases
Bases of Power for Channel Control
Reward Power
Coercive Power
Legitimate Power
Referent Power
Expert Power
Using Power in the Marketing Channel
1. Identify available power bases

Bases are a function of size of:
• producer or manufacturer
• organization of channel
• particular set of circumstances
2. Select and use appropriate

power bases to better or
worsen channel relationships
Basic Research Findings
Classic Findings
• Expert and referent • Power employed by

power in conventional manufacturers based
channels may be more on economic rewards or
effective than direct coercion provided a
monetary incentives or higher degree of control
threats in inducing over channel members
channel members to than power based on
accept controls. legitimacy, expertise, or
reference
Noncoercive power bases satisfaction in “weaker”

channel members, such as franchises
1. Franchisees are likely to have higher morale.

2. Franchisees are more likely to cooperate with
the franchisor.
3. Franchisees are less likely to terminate their
contracts.
4. Franchisees are less likely to file individual suits
against the franchisor.
5. Franchisees are less likely to file class action suits.
6. Franchisees are less likely to seek protective legislation
such as the “Franchise Full Disclosure Act” (1970).
General Inferences from findings
1. Power must be exercised to influence member behavior.

2. Effectiveness of power bases to influence members is
situation-specific.
3. The exercise of power and how it is used affects the degree of
cooperation, conflict, and satisfaction among channel
members.
4. The use of coercive power probably promotes conflict and
dissatisfaction to a greater degree than the other power bases.
5. The use of coercive power can reduce channel’s stability and
viability.
Roles in Marketing Channels
A set of prescriptions defining what the behavior

of a position member should be
• Roles change over time.

• Straying far from a role may cause conflict.
• Roles help describe & compare the expected
behavior of channel members and
provides insight into the constraints
under which they operate.
Roles in Marketing Channels
Questions to help the channel manager
• What role does the channel manager expect a particular

channel member to play in the channel?
• What role is this member expected to play by his or her
peers?
• Do the manager’s expectations for this member conflict
with those of the member’s peers?
• What role does this member expect the manager to
play?

Behavioral Processes in Marketing Channels

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Behavioral Processes in Marketing Channels

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Behavioral Processes in Marketing

• Generated by any process of

Cause When a channel member perceives

Direct, personal, and

Does conflict Can conflict increase

How does conflict

Does conflict have

Negative Effect: Reduced Efficiency

As the level of conflict increases,

Channel efficiency declines

No Effect: Efficiency Remains Constant

Exists in channels characterized by

Channel efficiency is not affected

Positive Effect: Efficiency Increased

Conflict might be impetus for either

Channel efficiency increases

Regularly survey other members’

Perform marketing channel audit

Form distributors’ advisory councils

Subjective process that relies on

Creative action on the part of some party

Conversely, if conflict is simply “left alone,”

The capacity of a particular channel

Keys to understanding Power:

1. Identify available power bases

2. Select and use appropriate

• Expert and referent • Power employed by

Noncoercive power bases satisfaction in “weaker”

1. Franchisees are likely to have higher morale.

1. Power must be exercised to influence member behavior.

A set of prescriptions defining what the behavior

• Roles change over time.

Questions to help the channel manager

• What role does the channel manager expect a particular

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