Value Pricing and E-Book Content

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Channel conflict occurs when partners must compete against each other or
against the vendor's sales team (Grant, 2012). This makes it difficult for the retailer
who wants to offer several product brands to consumers, in an effort to attract more
customers and increase sales. Many retailers will offer several brands of the same
product. Often the retailer does this to capture more of the market share from
consumers who desire products at different price points. Often, retailers will also
offer different brands to meet other needs of consumers, such as offering green
products, organic products, or products made of special ingredients or materials.

Retailers may not be particularly concerned with how brands compete against
each other. They may increase the number of brands of particular products to
satisfy their customers. This is particularly true for retailers who attempt to target
a variety of consumers with various demographics. Channel conflict situations may
not be perceived as problems to the consumers and retailers who serve them.
Multiple brands offered through the same channel are a benefit to customers and
retailers who serve them. Even when customers tend to show brand loyalty, they
want choices and the ability to choose substitutions, should product features of
the favored brand change.

Brands compete with each other when channels, such as retail stores (both
brick and mortar and online stores) offer multiple brands of the same or similar
products. Many retailers, for example, offer several brands of bath towels, kitchen
cookware, and furniture. Some brands are similar in price and quality, though one
may be slightly cheaper than another. This creates a challenge for the brand that
wants to establish itself as a low cost leader. If a higher priced brand strategizes to
compete with additional features (such as longer warranty)or better quality, there is
less of a challenge in maintaining brand loyalty. However, if the customer's
situation changes and income is reduced or he/she has a bad experience with the
preferred brand, the several competing brands offered through one or two channels
may create a situation where ...