Management of conflicts in parallel distribution channels

Many good consumer companies who are basically into retail sales have a substantial market in institutions to justify setting up of an institutional sales group. Examples in India are - Gillette, Dabur, Lakhanpal (Novino), Blow Plast (VIP Luggage), and Luxor- Parker etc. There is an underlying tussle and sometimes ever contentious relationship between the retail and institutional sales force. This conflict many times flares up into arguments and accusations. The companies with established systems have evolved mechanisms to avoid such unhealthy conflict or deal with it at the branch level itself so that it is not a regular irritant. However, for companies which are new to operating parallel distribution system, such a conflict can build up and cause harm to the overall interests. The top management can do well to recognize the telltale sign of such a conflict. The objective of this paper is to understand nature and sources of conflicts in parallel distribution channels and to suggest ways and means to manage parallel distribution channels. The information is based on secondary sources supported with authors’ work exposure.