Abstract for: Managing Marketing Multi-Channel Conflict to Maximize Profit in The Egyptian Consumer Electronics market
In today’s global competition, companies are obliged to go to market using multiple channels strategy for various reasons. However, channel conflict is inevitable in multi-channel structures causing sharp decreases in the demand of one or more channels. In this article, a system dynamic model was developed to simulate the complex multiple channel structure and various factors that affect the demand and channel conflict. The model aims to simulate the real situation of the supplier decision maker who has to take fast decisions in one of the various variables that he controls to achieve maximum profits and minimum channel conflict. The model was validated using real data of a major consumer electronics supplier in Egypt that has traditional distributors and Hypermarkets as two different channels. Various policies of inventory allocations in each channel and different promotion rates were tested in order to achieve the objective of maximizing supplier profit and minimizing channel conflict. It was found that the policy of allocating the inventory with the equal quantity in both channels with a promotion rate of one promotion per month in the hypermarkets is the optimal policy.