Channel conflict: is where any two different marketing channels are competimg for the same sale with the same brand!
How could an insurance firm start selling insurance directly to end customers without upsetting their traditional insurance agent/broker channel?
It is possible to not upset established retail conflict between the insurance company and their previous channels. By selling directly online they are scared they will lose business! They can do this by: being a newly established retail business (as they don’t have the history with their retailers!) They could also create a site where they directly sell their products but also advertise their retailers, whilst providing links to the retailing sites so consumers cam purchase them from there. As mentioned within mylams.com.au, Dell the computer company started off as directly selling to consumers and then branched out to retailers. This is insurance company needs to set clear goals and outline them to their retailers, so they achieve a united front. Including channel partners in decision making (such as their brokers). Functional conflict can be achieved where each channel understands that the success of one channel dictates the other. Make a deal with the brokers, do not do it blindly. Mediation may be used by a third party to assemble the agreement between the channels. This strategy may be efficient where they should hire someone to do an e commerce distribution assessment such as TechZui.
How would the approach resolve the above situation for the insurance company?
By sharing rewards and creating new synergies between the manufacturer and the brokers. As a team they are more likely to make appropriate decisions surrounding the internet business. It is in both of their interests to make more profit and market more power. I have included this answer in the question above.
Provide another example of channel conflict that you can think of. What style of resolution was used?
Internal conflict is where new online channels must compete with existing offline channels within the same business! Harvey Norman has received some conflict whilst selling Apple products. They do not in fact make a profit on these items as they only sell at cost price and the profits go directly to Apple. They stock their products because without the consumers will not come into their physical stores but also have deals with Apple as the manufacturer. Apple has incredible market power but by selling it’s products, Harvey makes no financial gains. There is no resolution to this, Apple is the dominant company and Harvey are a retailer. They do attract customers to their store and have a brand deal with Apple so in some ways that is the resolution.