Disintermediation is the process of eliminating layers of intermediaries, such as distributors and wholesalers, to sell directly to customers. This is a tricky process, particularly if a firm wants to sell online and through its traditional distribution channels simultaneously. For example, if a firm has traditionally sold its products through electronics stores and is now offering the same products for sale online, the electronics stores may refuse to stock the products or may insist that they be sold online for the same price offered in the stores. This problem is referred to as channel conflict. This conflict occurs when two or more separate marketing channels (e.g., online sales and retail sales) are in conflict over their roles in selling a firm’s products.
Channel conflict starts when one channel member believes another channel member is involved in activities that are preventing it from attaining its goals. Vertical conflict takes place between intermediaries at different levels in a marketing channel. For instance, between manufacturers and wholesalers. Disintermediation is a channel conflict when one member bypasses another member and buys or sells products directly.
Use of the term in Sentences:
- The professor is discussing disintermediation & channel conflict in the marketing class.
- The students were asked to write some examples of disintermediation & channel conflict in the sudden test.
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