Distribution and Retailing Channels

Distribution and Retailing Channels

Ways in which conflict may arise within this distribution channels

Channel conflict can be defined as circumstances which force different business people to differ due to similarities in some of their tasks for example how they distribute their products. These conflicts affect the profitability and performances of businesses for they lead to both healthy and unhealthy competitions.

Horizontal channel conflict

This kind of conflict occurs when a party faces conflicts between two of its sales division. This kind of conflict arises between two or more departments of a business. Whereby one department may affect the profits of other departments due to inconveniences .The main reason for this is failure to use intermediaries to manage these departments. For example Fashion wholesalers may face this problem because of carrying out the advertisements and distribution themselves.one department may not be very productive hence it may end up using the profits earned by the other department hence affecting the performance of the whole business at large .this can be by reduced sales to retailers who may end up shifting to other suppliers hence a big loss.

Vertical channel conflict

Vertical conflict arise when a party decides to carry out all the activities without incorporating third parties and they are still relating with them, for example retailers and distributors.in this case the retailers may get very low profits or even end up not getting profits at all. This will automatically discourage them and they may either switch to other channels or to other kinds of businesses and this will affect the wholesalers and they end up making grand losses.

Multilevel Channel Conflict

This kind arises when a wholesaler creates competition between its channels of advertising and distributing and at the same time relating with retailers. This leads to competition increase. This is because costs of advertising and distributing the products will automatically shoot up and these costs will be directly or indirectly transferred to the retailers. This will affect their profits greatly and demoralize then and they may move to other alternatives which may favor them

Conflict resolution

Fashion wholesalers may fall a victims of such conflicts as mentioned above, it is wise for them to apply the suggested below conflict resolution ways;

Fashion wholesalers can fight against horizontal conflicts by ensuring each of its departments is properly managed .for example the showroom department, distribution and the storage department should be continually evaluated to ensure that each department is performing appropriately. Any department that is cutting the profits of other departments should be properly examined and if the problem cannot be adjusted it should be eliminated and a third party can be used.

In the case of vertical conflicts, fashion wholesalers should ensure that they directly distribute their products to the women retailers and not to the consumers directly. This reduces the risks of losing the retailers because their profits will have been affected for they will be forced to sell at the same price as the manufacturers. This will affect the Fashion wholesalers to great extent because they will lose the retailers who are their major customers for they will have opted to do other businesses. Therefore Fashion wholesalers should focus on one kind of a group that is the retailers so as not to interfere with the distribution chain and hence maintaining a health and a conflict free business.

Multilevel channel conflict which is also a threat to Fashion wholesalers can be dealt with by ensuring that the departments in a business don’t compete or no competition with third parties. For example there should not raise a competition between the women retailers and Fashion wholesalers for this will promote disunity and UN necessary disagreements and no productivity at all. The fashion wholesalers should agree with their retailers on how they will distribute their products and also on the prices and then work from that point of view.so that both businesses benefit and profits flow at each level and fairly. Internally the distribution channel should not compete with the storage or the advertisement department. These departments should work harmoniously so ensure overall productivity of the organization. In case of a depart pulling the others down due to one reason or another other departments should be willing to support it that it may not cause negative impacts to all the other departments.

Retail mix for a startup retailer of men’s clothing

A retail mix is where a variety of products may be offered.in this case the retail mix for the men’s clotting may consist of casual wear and official wear.

The following assumptions are made;

The retailer will offer men’s T-shirts. The store department will need to store them according to their sizes, prices and quality .so we are going to assume that the store will have approximately 100 T-shirts for a start.

The T-shirt should be of different sizes since these men are not of the same size, the sizes will be measured by the bespoke tailors. Since we are targeting two different classes of people the quality and the prices should be different. For grade a social class the prices and quality should be higher and better respectively. The type of the T-shirt is also important to consider for in our case we are dealing with men aged 40 and above so they will not automatically buy T-shirts that are styled to suit the youth.This category of people also needs to be addressed respectively so as to win they buy the products. Since this is the start advertisements should be clearly made.