Retailer cooperatives—Retailers take the initiative and organize a new business entity to carry

and catalogs for a “best of ” array of merchandise and don’t want to have to click through dozens of pages. Conflict, Cooperation, and Competition No matter how well channels are designed and managed, there will be some conflict, if only because the interests of independent business entities do not always coincide. Channel conflict is generated when one channel member’s actions prevent another channel from achieving its goal. Software gi- ant Oracle Corp., plagued by channel conflict between its sales force and its vendor partners, de- cided to roll out new “All Partner Territories” where all deals except for specific strategic accounts would go through select Oracle partners. 56 Channel coordination occurs when channel members are brought together to advance the goals of the channel, as opposed to their own potentially incompatible goals. 57 Here we examine three questions: What types of conflict arise in channels? What causes conflict? What can marketers do to resolve it? Types of Conflict and Competition Suppose a manufacturer sets up a vertical channel consisting of wholesalers and retailers hoping for channel cooperation and greater profits for each member. Yet horizontal, vertical, and multi- channel conflict can occur. • Horizontal channel conflict occurs between channel members at the same level. Some Pizza Inn franchisees complained about others cheating on ingredients, providing poor service, and hurting the overall brand image. • Vertical channel conflict occurs between different levels of the channel. When Estée Lauder set up a Web site to sell its Clinique and Bobbi Brown brands, the department National account management Direct sales Internet Telemarketing Direct mail Retail stores Distributors Dealers and value- added resellers Gather relevant information Develop disseminate communications Reach price agreements Place orders Acquire funds for inventories Assume risks Facilitate product storage movement Facilitate payment Oversee ownership transfer VENDOR CUSTOMER Demand-generation Tasks Marketing Channels and Methods |Fig. 15.6| The Hybrid Grid Source: Adapted from Rowland T. Moriarty and Ursula Moran, “Marketing Hybrid Marketing Systems,” Harvard Business Review, November–December, 1990, p. 150.