The Coca-Cola Company Channel Management Conflicts Essay
Introduction
Table of Contents
The Coca-Cola Company has a worldwide reputation for it manufactures its products for more than a century already. It started as a small private enterprise and over the years has grown into a large corporation that has subsidiaries throughout the world. The company faced several problems in the course of its development, but its talented management succeeded in coping with all the challenges. Currently, the company faces challenges in managing its channel members who conceal the discounts which it offers to the consumers; motivating the channel partners through collaboration and sharing of the profits may help to deal with this problem.
Literature Review
In general, managing the channel is all about improving the performance of the company. Albaum, Duerr, & Strandskov (2005) view a channel as a network consisting of “several stakeholders – that is, independent or dependent companies that are interrelated and all have a stake in the success of the network” (p. 264). It is often the case that the companies face problems with managing channel members. Most of the scholars agree with the idea that there exist several approaches in managing channel conflict. Reid & Bojanic (2009) note that two basic of these approaches are behavioral (influencing channel power and leadership) and contractual (dealing with vertical marketing systems). Havalday & Cavale (2006), in their turn, believe that collective goal setting can also be efficient while managing the channel conflict. In this case, all the goals are agreed upon by both parties and achieved mutually. Moreover, “they feel that they have been a ‘partner’ in the decision and are more likely to abide by it” (Havalday & Cavale 2006, p. 13.17). After the goals are established, channel managers should collaborate to achieve them (Gorchels, West, & Marien 2004). This means that they should stimulate sales using different support tools and programs.
Application
The Coca-Cola Company needs to introduce several changes to deal with the problems it faces in managing channel members. First of all, it should adopt a behavioral approach to managing channel conflict, because this approach will increase the cooperation of the channel members. In addition, a behavioral approach will ensure the company with proper channel leadership and help it associate with successful companies and learn from their experience. In the future, such association may grow into the merging of the companies, which would also be beneficial for The Coca-Cola Company. What’s more, to motivate the channel members, the company can increase its sales; this can be done by offering discounts on its cans. Since namely discounts are the essence of the conflict between the channel members, the company’s management has to offer collective goal setting to the retailers. They can agree not to pocket the discounts and share the profits which these discounts will bring in the future. Such a decision would be beneficial for both parties. These changes are likely to increase the channel members’ motivation thus solving the problems with managing them.
Conclusion
Taking into consideration everything mentioned above, it can be stated that any company, even such a large and famous as the Coca-Cola Company, can face challenges. The company’s current problem with managing its channel members can be dealt with using a behavioral approach to managing channel conflict. This means that the company and its retailers should apply collective goal setting which will not harm anybody’s interests and which will bring profits to both parties.
List of References
- Albaum, GS, Duerr, E & Strandskov, J 2005, International marketing and export management, Pearson Education, London.
- Gorchels, L, West, C & Marien, E 2004, The manager’s guide to distribution channels, McGraw-Hill Professional, New York.
- Havaldar, K & Cavale, VM 2006, Sales and distribution management: text and cases, Tata McGraw-Hill, New Delhi.
- Reid, RD & Bojanic, DC 2009, Hospitality marketing management, John Wiley and Sons, New York.
