Marketing of Crafton Industries Inc - Essay Example

The main issue at hand is the establishment of Crafton’s distribution centers or wholesale operations. But staying in good relations with the wholesale distributors became difficult because they thought that their customer base would be encroached upon by the potential new retailers. There can be many possible ways in which the manager can respond to this situation.

Several companies have to handle channel conflicts when they are dealing with a hybrid or multi-channel distribution system. Crafton is experiencing “external channel conflict” in the given scenario. It can be handled in various ways. Firstly, Crafton can arrange some business planning meetings in which the company can clarify to them that they are an important part of their distribution channel and cannot be neglected in any way. The company can also use motivation strategies to instill a sense of responsibility towards the company (Linton, n.d.), as the wholesalers have been in business relations with Crafton for a very long period and they cannot just quit.

Aligning pricing strategy is another solution for this channel conflict. This can guarantee the wholesalers that their share of the profit is not siphoned to the retailers. The wholesalers would have a clear idea of what proportions of the profit margins are theirs and what is going to the retailers. Crafton has to make clever decisions in this strategy because the company cannot afford to lose any of its profits or any of the distribution channels. Crafton can do this by formulating a consistent pricing and discount strategy. The prices must be reflective of the service, availability of the product, and costs. Prices should only be set by the supplier.

Creating monthly, quarterly, and annual business plans would enable the wholesalers and the retailer to fulfill certain criteria on these entire bases. This would allow the company to give retailers and wholesalers some targets to be achieved till a certain point in time, for which the company can offer bonuses and incentives. Incentives can be given for profit, tonnage, fill rates, stocks, forecast accuracy, and store traffic, etc. Usually, the business practice is to set some metrics for this purpose. Each company has these metrics to avoid and resolve conflicts. This is a very critical management strategy because Crafton has to look for a tactic in which the metrics are such a way that does not harm the wholesalers and the retailers both. The metrics should be able to keep them at the same level.

Above all, having clear goals and expectations is imperative for resolving channel conflicts. In the business planning meeting, Crafton can certify to the wholesalers that they are not being ignored by the company by adding their retail chain and that they are needed by the company in every possible way. The company has to clarify certain goals and must find out ways to fulfill its expectations. Even some of the contemporary business analyses say that the introduction of e-commerce or selling products online to the customers directly can solve channel conflicts, but this would enrage the wholesalers completely and they can take the upright decision of withholding their business with Crafton in the given scenario. Read More