But staying in good relation with the wholesale distributors became difficult because they thought that their customer base would be encroached by the potential new retailers. There can be many possible ways in which the manager can respond to this situation.
Several companies have to handle channel conflicts when they are dealing in a hybrid or multi channel distribution system. Crafton is experiencing “external channel conflict” in the given scenario. It can be handled in various ways. Firstly, Crafton can arrange some business planning meeting in which the company can clarify it to them that they are an important part of their distribution channel and cannot be neglected in any way. The company can also use motivation strategies to instil a sense of responsibility towards the company (Linton, n.d.), as the wholesalers have been in business relation with Crafton for a very long period of time and they cannot just quit.
Aligning pricing strategy is another solution for this channel conflict. This can guarantee the wholesalers that their share of the profit is not siphoned to the retailers. The wholesalers would have a clear idea of what proportions of the profit margins are theirs and what is going to the retailers. Crafton has to make clever decisions in this strategy because the company cannot afford to lose any of its own profits or any of the distribution channels’. Crafton can do this by formulating a consistent pricing and discount strategy. The prices must be reflective of service, availability of the product and the costs. Prices should only be set by the supplier.
Creating monthly, quarterly and annual business plans would enable the wholesalers and the retailer to fulfil certain criteria on these entire bases. This would allow the company to give retailers and wholesalers some targets to be achieved till a certain point in time, for ...