Channel conflict when adding an Internet based marketing channel in an existing marketing channel system

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The evolution of the Internet, from being an easy way to spread information to being a new way to do business, has created new possibilities and new threats for companies all over the world. The threat of channel conflict is not a new issue to companies, but its importance has increased due to the emergence of electronic business. The purpose of this study was to examine the Internet's impact on channel conflict. Three distributing companies were studied to see how management perceived channel conflict brought on by the Internet, and how this has been managed. Each of the companies in this study had a multichannel distributing system with an Internet based marketing channel reaching the end consumer. Theories suggest that whenever two companies could sell to the same customer, conflict may arise and there are different ways to manage this potential conflict. Through telephone interviews, empirical data was collected, and based on these interviews the companies were described in three different cases. This study shows that managers are aware of the issue of channel conflict but no conflict caused by the Internet was found. All companies had developed well-functioning strategies to prevent conflict from appearing. These strategies differed due to the companies' differing conditions. Clear connections could be made between ...