Communicating for Better Channel Relationship
Marketing Management, Vol. 8, pp. 39-45, Summer 1999
8 Pages Posted: 13 Mar 2017
Date Written: June 1, 1998
Managing channel relationships continues to be a vexing issue for manufacturers. Manufacturers want dealers to be committed and satisfied and to coordinate their activities, but sometimes these outcomes can be elusive. Manufacturers have tools to gain dealer cooperation, including outright ownership, contractual/franchise relationships, or the use of power. However, these options may not be palatable or available to all manufacturers. This study of computer dealers found that collaborative communication has a strong, positive effect on dealer commitment to, and satisfaction and coordination with, a focal manufacturer when that manufacturer did not (or could not) use ownership, franchise relationships, or power to influence its dealers. In this sense, then, when other methods to gain dealer cooperation are not relied upon, collaborative communication strategies may be used to positively affect outcomes.
In today's volatile business environment, coordinating efforts between manufacturers and dealers continues to be potentially troublesome, yet rewarding. Channel relationships are difficult to manage, given the very different goals and objectives of dealers and manufacturers. In addition, with the advent of the Internet and database marketing, changes in the go-to-market landscape mean manufacturers and dealers (not to mention customers) have more choices. Finally, consolidation in many industries means that larger firms -- both manufacturers and dealers -- are able to exert more control over relationships with partners, and smaller players are left struggling to have a voice in the market.
In light of these monumental changes, several critical issues arise: How can channel relationships be managed to emphasize shared interests and common goals? How can manufacturers increase the likelihood that dealers comply with their programs and policies? Under what conditions will dealers feel satisfied with and committed to the manufacturer?
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