Distribution Channel Conflict i72y

Presented By, Manisha Katare Jyoti Dheer Ayan Chakraborty Pratik Mohapatra Sarbojit Bhattacharjee

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Channel conflict is a situation in which channel partners have to compete against one another or the vendor internal sale’s department. Channel conflict may also occur among various segments of corporate departments such as the sale’s channel.

• Can happen in any stage in the channel management. • Requires immediate attention. • Generally arise when channel and company differs.

•Direct channel conflict • Internal channel conflict • External channel conflict

• Managing channel conflict

•Negative

• Detect channel conflict

• Positive

• Informal communication system

• No effect

• Marketing channel audit

• Resolve conflict

• Appraise effect of conflict

• Tom Santos president of MACadam Computer Inc. USA, the authorized reseller of Apple complained about Apple is not helping him procuring new products such as iBook CD/DVD rewritable, Mac OS update X10.0 etc and it leads to allegation by many Apple resellers. • Mr. Santos also claimed for a faulty & quality control system. Several other resellers such as MacTech, Oregon, ed Santos and charged a law suit against Apple accusing fraud, breach of contract & unfair practices. • Apple is also being accused that it collected information about resellers’ customers and ed them to offer heavy discounts on purchasing from an Apple store. • Still By the end of March 2003, Apple had opened more than fifty stores all over the US, even as the total number of resellers who filed lawsuits against Apple went up.

• Apple signed yearly contracts with its resellers, making it mandatory for them to renew the contracts every year.

• The new contract bounded the resellers to provide their business and inventory reports and even their list of customers to Apple whenever requested. • Some resellers who tried to make changes in the contract has been cancelled their dealerships of Apple Co. • As per the new contract, Apple could allocate the available inventory to its physical stores, online stores, and other dealers before considering the resellers.

• The revised contract restricted them from using Apple's trademarks on promotional equipment.

• On March 31, 2004, Apple resellers started a website (www.TellOnApple.org) which contained articles regarding their conflict with Apple. • The site attracted by 2 million hits by the end of 2004. • Apple held its shareholders' meeting at its headquarters at Cupertino, California. • Around ten resellers protested in front of the headquarters and carried placards.

• The resellers said that their aim was to inform the shareholders of Apple's predatory policies. • On August 26, 2004, the Santa Clara Superior Court ruled that there was sufficient evidence against Apple. •Till December 2004, around five lawsuits were filed against Apple by various resellers.

• A five-member group of consumers and dealers filed a class-action lawsuit accusing Apple of selling used products after refurbishing them. • Some customers said they found names of other customers on some of the new Apple products they bought. • They charged that Apple had deliberately reduced its warranty coverage. • The resellers alleged that Apple charged them for the parts for machines under warranty. • The damages and losses claimed by the three consumers in the lawsuit was nearly US$75,000.

• Foxconn makes Apple devices from the iPhone to the iPad. • It has been accused for illegal overtime, improve safety protocols and not upgrade worker housing and other amenities. • Apple & Foxconn are coming to an Agreement for increasing power of Chinese workers. • The agreement could result in higher prices for consumers, though the impact will be limited . • If Foxconn tries to increase prices, Amazon could go to other major contract manufacturers like Quanta, Wistron, Pegatron or Inventec.

•Resellers in other countries such as Australia, Canada, and Taiwan alleged that they were also hit by Apple's unfair treatment. • The iPod now s for one- third of Apple's revenues and its 'halo effect' has contributed to a 35% increase in sales of the company's Macintosh computers . • Now its questionable fact that whether Apple's retail strategy had contributed significantly to this revenue growth or not. • Foxconn said it would reduce working hours to 49 hours per week including overtime. • Foxconn said it was raising salaries by 16 to 25 percent. • To compensate for the reduced hours, Foxconn will hire tens of thousands of additional workers. • Apple CEO Tim Cook, has shown a willingness to tackle the global criticism head-on.