It takes a big direct sales force to cover the waterfront in multiple markets. Channels, however, can help companies get to lots of prospects quickly and at relatively small cost. Thus, companies establish channels for different target markets and aim for efficiency, control, and adaptability. However, these various channels could bring some potential channel conflicts. According to Kotler, Channel conflict is "disagreement among marketing channel members n goals and roles- who should do what and for what rewards." In this Staples's case, the primary channel conflict would occur between the Internet and existing channel. Why? - Many channel participants would think that they contributed to the development of the product, and that they are supposed to share in the rewards from this development.
- The introduction of Internet channel prevented the existing channel from returns on their historical investment. - Existing channel members are particularly threatened when the Internet offers advantage over traditional methods. - In the Staples's case, Internet segment accounted for 28 percent of sales and 40 percent of profit. - The traditional channel might respond by reducing efforts to promote products that are available on the Internet. - The introduction of new channel increases the need of communication because of more decision-makers and more information, which make the process more complicated.
- For example, the availability both of Internet and bricks and mortar staples has made it more difficult for retailers to figure out inventories. Why not? - The use of multiple distribution channels is an important mechanism for targeting separate segments with different marketing offers. - The use of two channel- Internet and retailer- enables Staples to satisfy customers who prefer to try the product before purchasing and to satisfy customers who do not have time to visit a retail store. - Staples's retail stores let consumers interact face to face with salesperson and assure the quality of the product. - However, there are some requirement for preventing the channel conflict and bringing the best result of multichannel and These are - abandoning attempts to price discrimination - letting customers use Internet interactively, for example, Staples.
com help customers find the nearest store or print out driving directions and maps.