Channel Conflict a. Conflicts can arise when the objectives of one partner don't fit with those of another partner, or when one partner believes that another is using its power to upset the cooperation. Horizontal conflict can occur among partners at the same level in the channel. The potential for conflict increases when a producer sells a product through a variety of partners at the same level. Vertical conflict can occur among partners at different levels in the channel. Slotting fees are payments that retailers demand in exchange for placing products on store shelves.
Many marketers question the ethics of slotting fees.
If marketers want to keep their products on store shelves, they may be asked to pay annual renewal fees. The gray market is buying and selling among unauthorized channel partners that bring products from other countries at lower prices than authorized channel partners pay. Channel Leadership and Channel Power a. One way to control channel conflict is through channel leadership. A channel captain is a manufacturer or channel partner with the power to dominate the chain of channel partners.