We have a fair bit of channel conflict in our house. My kids want ABC2 or 3, I want food shows, my hubbie wants footy......oh hang on, I just read the brief and it seems I may be off track. For those of you like me, who could be forgiven for thinking channel conflict is related to the television, let me tell you exactly what it is.
Channel conflict is when a business decides to engage by selling directly to the consumer, at the same time retailers/ distributors are also attempting to sell their product through other avenues. It makes sense that this would create some disharmony, particularly when a business has heavily relied on that middle man to create sales previously.
The Microsoft situation is an interesting one. Basically it would seem that Microsoft had a case of the greedy guts and wanted more than one slice of the pie (an apple pie it would seem), they created a tablet in direct competition to the Ipad, a product that currently uses the operating system Microsoft creates.
I don't think this kind of behaviour is uncommon and their are a number of organisations doing it quite successfully. Dell has made the reverse transition and gone from exclusive online sales to both online direct and utilising retail stores. There are certainly still a percentage of people that prefer to touch and feel a product before investing their cold hard cash.
I am personally surprised this tablet got off the ground given the feelings expressed by some fairly influential people in the industry and connected to Microsoft.
Without knowing the term channel conflict previously, I am aware of it in a very practical sense. I have just recently wound down a small biscuit business called The vintage baker. I stocked in stores around the Goldfields region and in Melbourne and also did markets. I was always wanting to ensure no conflict was created with my stockists. I always ensured if I had markets within their vicinity, then part of my marketing included making people aware that there were places locally they could purchase my products. I also had to ensure my pricing didn't undercut theirs.
In my opinion whether it is a small or large business choosing this method, the most important aspects of the process is relationships and communication. It would seem Microsoft were fairly illusive with the details and therefore placed strain on relations and a level of trust was lost.
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