Channel Conflict

Situation where a manufacturer distributes products to customes using two or more channels, and the channels compete with one another. For example, HP sells computers using the direct channel - selling directly to consumers over the web - and using the retail channel through distributors such as Best Buy. If a computer is cheaper on the web people won't buy from the retail partner, and Best Buy will be mad. That's channel conflict, and it happens a lot.

To reduce channel conflict, many manufacturers create different products for different channels. Dell, for example, designed a computer for sale by Walmart that is not available directly from Dell.

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