Week 12 - IBM_Channel Management (SW) v2.pdf

# Understanding channel conflicts Channel conflict is an inherent aspect of distribution systems, arising from natural tensions and differing objectives among channel members. ### 1.1 Natural tensions among channel members The distribution channel involves various entities, each with its own set of goals and priorities, creating a dynamic environment where conflicts can emerge. These goals are often in opposition, leading to a natural tension [14](#page=14): * **Final Customer:** Seeks the best value for money, implying the highest quality at the lowest price [14](#page=14). * **Distributor/Wholesaler:** Aims for the best assortment of products at the minimum possible cost [14](#page=14). * **Manufacturer/Producer:** Strives for the largest selling volume and often desires to sell their product at the highest price [14](#page=14). * **Retailer:** Focuses on offering the right assortment and volume at the right price for their customer base [14](#page=14). This divergence in objectives means that what is optimal for one member of the channel may be detrimental to another, laying the groundwork for potential conflict [14](#page=14). ### 1.2 Definition of channel conflict Channel conflict is defined as a state of opposition or discord among members within a given distribution channel. This opposition can manifest in various ways, including differences in viewpoints, perceptions, sentiments, interests, or intentions [15](#page=15). Channel conflicts can exist in different stages: * **Latent conflict:** This is an unspoken or unaware state of potential disagreement [15](#page=15). * **Perceived conflict:** Here, disagreements are verbalized by the channel members involved [15](#page=15). * **Manifest conflict:** This is when the opposition is expressed visibly through negative actions or behaviors that hinder channel operations [15](#page=15). > **Tip:** Understanding the different stages of conflict is crucial for proactive management, as addressing latent or perceived conflicts can prevent them from escalating into manifest issues. ### 1.3 Types of channel conflicts Channel conflicts can occur at different levels within the distribution structure. The two primary types are vertical and horizontal conflicts [16](#page=16). #### 1.3.1 Vertical channel conflicts Vertical conflict occurs between channel members who are positioned at different levels of the distribution chain. This means conflicts arise between entities such as a manufacturer and a wholesaler, a wholesaler and a retailer, or a manufacturer and a retailer [16](#page=16). #### 1.3.2 Horizontal channel conflicts Horizontal conflict arises between channel members who are at the same hierarchical level within the distribution channel. An example of this would be disputes or disagreements between two or more retailers selling the same brand or product, or conflicts between different wholesalers in the same market area [16](#page=16). --- # Modern sources of channel friction This section details contemporary factors contributing to channel conflict, focusing on pricing, assortment, platform dominance, and the amplification of grey markets [22](#page=22). ### 2.1 Pricing conflicts Differential pricing across various distribution channels is a primary driver of channel conflict. When authorized dealers offer products at one price, while unauthorized channels sell them at a significantly lower price, it creates a disadvantage for the authorized partners who often provide higher levels of service. This disparity can lead to authorized dealers losing sales volume to these lower-priced, unauthorized outlets [23](#page=23) [25](#page=25). ### 2.2 Assortment conflicts and product availability Conflicts can arise not only from pricing but also from differences in product assortment and availability across channels. This can manifest when certain channels have access to exclusive products or wider selections, or conversely, when authorized channels are expected to carry a full range while unauthorized ones cherry-pick popular items [22](#page=22). ### 2.3 Visibility and retail media conflicts While not explicitly detailed in the provided text, the mention of "Visibility & Retail Media Conflicts" suggests that disparities in how products are presented, promoted, or advertised within different retail environments or through digital platforms can also lead to channel friction. This could involve disagreements over promotional support, placement, or the use of retail media networks [22](#page=22). ### 2.4 Platform-induced conflicts The rise of dominant platforms introduces new avenues for channel conflict. These platforms can exert significant influence on pricing, product availability, and market access, potentially creating an uneven playing field for brands and traditional channel partners. The nature of these conflicts might involve platform fees, algorithmic biases, or direct competition with platform-owned entities [22](#page=22). ### 2.5 Grey market amplification Grey markets, also known as parallel markets or parallel imports, represent a significant modern source of channel conflict [23](#page=23). #### 2.5.1 Definition and characteristics of grey markets A grey market is characterized by the sale of authorized, branded products through distribution channels that are not officially sanctioned by the manufacturer or supplier. These channels typically include discount outlets that offer less customer service compared to authorized retailers. Grey market activity is often motivated by price differentials between markets or by the need to offload excess inventory. While usually legal, grey market sales can breach existing distribution agreements. When products originate from foreign markets, this phenomenon is specifically termed "parallel market" or "parallel import" [23](#page=23). > **Tip:** It is crucial to distinguish grey markets from counterfeiting (black markets), which involves the sale of fake goods as genuine and is illegal [23](#page=23). #### 2.5.2 Sources of diversion in grey markets The flow of goods into grey markets can originate from various points within the supply chain. Potential diversion points include a supplier's foreign division, distributors or wholesalers, import/export houses, and professional traders. These intermediaries facilitate the movement of products from their intended markets to unauthorized retailers [24](#page=24). #### 2.5.3 Impact of grey markets The existence and activity of grey markets have detrimental effects on authorized channel members and the brand itself [25](#page=25). * **Diminished volume for authorized dealers:** Authorized retailers often experience a reduction in their sales volumes as consumers opt for the lower prices offered through grey channels [25](#page=25). * **Low service from unauthorized retailers:** The unauthorized outlets typically provide minimal to no service, which can lead to consumer dissatisfaction and a negative perception of the brand if issues arise [25](#page=25). * **Brand image damage:** The combination of price discrepancies and inconsistent service levels can significantly damage the overall brand image and reputation. This creates a lose-lose situation for both the supplier and authorized dealers [25](#page=25). #### 2.5.4 Case example: Mavic wheels The case of Mavic wheels illustrates the complexity of pricing and channel management in the face of potential grey market activity (#page=26,27,28,29,30). Mavic products, such as wheels, can pass through numerous marketing channels, leading to significant price variations for a single product (#page=27,29). These channels include bike assemblers, importers, wholesalers, retailers, wheel builders, custom builders, and ultimately, consumers (#page=27,29). The example highlights how a "highly discounted wheel" could emerge through unofficial channels, potentially originating from a direct-to-consumer website that bypasses traditional intermediaries. This scenario underscores the challenge for manufacturers in maintaining price integrity and controlling their distribution when products can be diverted through multiple, often opaque, pathways (#page=27,29,30) [26](#page=26) [27](#page=27) [28](#page=28) [29](#page=29) [30](#page=30). --- # Legal frameworks and their impact on channel management This section delves into the intricate web of legal regulations governing channel management, focusing on their influence on competition, pricing, and distribution strategies [43](#page=43). ### 3.1 Overview of key legal frameworks Several legal frameworks significantly impact how businesses manage their distribution channels, aiming to protect competition and ensure a fairer market environment [45](#page=45). #### 3.1.1 Vertical Block Exemption Regulation (VBER) The VBER (EU) governs vertical agreements between entities at different levels of the supply chain, such as manufacturers and distributors. The 2022 revision introduced more flexibility regarding dual pricing (online vs. offline), clarified rules for online marketplaces, and updated regulations for dual distribution (where brands sell directly to consumers (D2C) alongside using partners). It allows for channel differentiation and assortment control but strictly restricts pricing control. The VBER also provides stronger protection for selective distribution systems [45](#page=45) [48](#page=48). * **Allowed under conditions:** * Selective distribution based on quality criteria [48](#page=48). * Different prices for online versus offline sales (dual pricing) [48](#page=48). * Recommended resale prices (RRPs) [48](#page=48). * Limiting marketplaces if justified, as per the Coty ruling [48](#page=48). * Temporary exclusivity periods [48](#page=48). * Restricting discount usage under quality criteria [48](#page=48). * **Prohibited:** * Resale Price Maintenance (RPM) [48](#page=48). * A total ban on all online sales [48](#page=48). * Ban on passive sales (responding to demand outside a designated territory) [48](#page=48). * Market partitioning, including territorial exclusivity without justification [48](#page=48). #### 3.1.2 Digital Markets Act (DMA) The DMA (EU) aims to ensure fair competition in digital markets by regulating dominant online platforms, referred to as "gatekeepers." Gatekeepers are defined as large platforms with a significant EU turnover or valuation and a substantial number of monthly users, such as Google, Apple, Amazon, Meta, Microsoft, and TikTok. The DMA increases freedom and choice for businesses and consumers by opening access to digital channels, improving data transparency, allowing alternative distribution and payment routes, and encouraging stronger D2C strategies [45](#page=45) [51](#page=51). * **Gatekeepers MUST:** * Allow third-party services and payments [51](#page=51). * Permit users to uninstall default applications [51](#page=51). * Enable data access for businesses regarding their own data [51](#page=51). * Facilitate easy switching of services [51](#page=51). * Enable interoperability and switching between services [51](#page=51). * Provide transparency on advertising prioritization for businesses [52](#page=52). * **Gatekeepers MUST NOT:** * Self-promote their own products or services [51](#page=51). * Combine user data across services without explicit consent [51](#page=51). * Force exclusive use of platform tools [51](#page=51). * Block businesses from directly contacting their customers [51](#page=51). * Enforce "Best Price" clauses (Most Favored Nation - MFN), obliging retailers to offer the lowest prices on their platforms [52](#page=52). * Favor their own products or services (self-preferencing) [52](#page=52). * Lock app stores to proprietary payment systems [52](#page=52). #### 3.1.3 Digital Services Act (DSA) The DSA (EU), effective from February 2024, regulates online content and commercial activities, with a significant focus on channel management. It aims to create a safer digital sales environment, making it easier to identify and remove unlawful products, counterfeits, and unauthorized sellers. The DSA enhances brands' ability to enforce selective distribution and combat grey market activities [45](#page=45) [53](#page=53). * **Practical Implications:** * Grey market sellers become easier to identify and remove [53](#page=53). * Selective distribution enforcement online is strengthened [53](#page=53). * Brands gain legal standing to remove unauthorized discount sellers [53](#page=53). * Platforms must verify business identities ("Know Your Business Customer") [53](#page=53). * Platforms must swiftly remove illegal listings [53](#page=53). * Consumers must be informed when a product is illegal [53](#page=53). * Transparency duties require platforms to indicate who the seller is, explain ranking algorithms, and clearly label paid placements [53](#page=53). * Platforms must track repeat offenders of counterfeit and grey market sales and share data with authorities [53](#page=53). * Consumers must be warned if purchasing from high-risk sellers [53](#page=53). #### 3.1.4 National Laws National laws also play a crucial role in enforcing channel management regulations, often with stricter interpretations in certain regions compared to EU directives [45](#page=45). * **Switzerland:** * Has revised its Cartel Act with stricter enforcement, particularly concerning Retail Price Maintenance (RPM), high pricing via selective distribution, abuse of relative market power towards Small and Medium-sized Enterprises (SMEs), and a geoblocking ban. Swiss enforcement is generally faster than EU enforcement [56](#page=56). * **Brands CANNOT:** Impose minimum resale prices, mandatory online pricing policies, block Swiss distributors from selling to EU markets, or block imports based on price structure differences [56](#page=56). * **Brands CAN:** Utilize selective distribution with objective criteria, differentiate assortments per channel, employ temporary exclusivity, and offer recommended resale prices [56](#page=56). * **United Kingdom (Post-Brexit):** Enforcement is described as aggressive [57](#page=57). * **United States:** Generally more flexible but with rising scrutiny [57](#page=57). * **China:** Very strict on platform advantages [57](#page=57). ### 3.2 Horizontal vs. Vertical Restraints Understanding the distinction between horizontal and vertical restraints is crucial for legal compliance [43](#page=43). #### 3.2.1 Horizontal Restraints (Cartels) A horizontal restraint is an anti-competitive agreement, decision, or concerted practice between businesses operating at the same level of the distribution chain, aiming to restrict, prevent, or distort competition. "Hardcore cartel" activities include price agreements and market sharing between competitors. Even informal agreements and the exchange of commercially sensitive information between competitors are prohibited [44](#page=44). * **Confidential information includes:** Prices (current or proposed), margins, sales conditions, customer details, discounts and bonuses, costs, product plans, quantities, and marketing strategies [44](#page=44). * **Internal Guidelines:** While meetings with competitors are permissible, discussions must be carefully managed. Information should only be acquired from proper sources, and confidential information should not be exchanged with competitors [44](#page=44). #### 3.2.2 Vertical Restraints A vertical restraint is an agreement or practice between businesses on different levels of the distribution chain concerning the conditions for purchasing, selling, or reselling goods or services, which has the object of restricting competition. Examples of hardcore vertical restrictions include Resale Price Maintenance (RPM) and a total ban on online sales [46](#page=46). * **Resale Price Maintenance (RPM):** * **Allowed:** Communicating a recommended resale price (without enforcement). In limited circumstances, fixing the resale price for a new market or product introduction for a short duration is permissible, but legal advice is essential [47](#page=47). * **Strictly Forbidden:** Advising or pressuring distributors/retailers to adjust prices, and monitoring resale prices [47](#page=47). * **Caution:** Actions like stopping deliveries or worsening sales terms for a customer could be interpreted as pressure [47](#page=47). * **Online Sales:** * **Allowed:** Setting qualitative criteria for internet sales, provided they are comparable to brick-and-mortar criteria and applied coherently [47](#page=47). * **Strictly Forbidden:** A total ban on online sales, limiting the overall proportion of online sales, and using dual price lists for online and offline resale [47](#page=47). ### 3.3 Abuse of Dominant Position A company holding a dominant position in a relevant product and geographic market is not inherently anti-competitive. However, exploiting this position to eliminate competition constitutes an abuse [54](#page=54). * **Assessing Dominance:** Dominance is assessed by defining the relevant product market (products considered substitutes by consumers) and geographic market (area with homogenous competition conditions). Market share is a primary indicator, with higher and longer-held shares suggesting dominance. A market share below 40% is a useful initial indication that dominance may not exist [54](#page=54). * **Examples of Abuse:** * Refusal to deal with certain customers [54](#page=54). * Bundled discounting (discounts based on purchasing multiple products) [54](#page=54). * Discrimination (applying different conditions to similar transactions without justification) [54](#page=54). * Tying (making the sale of one product conditional on purchasing another) [54](#page=54). * Charging unreasonably high prices [54](#page=54). * Predatory pricing (selling at artificially low prices to eliminate competitors) [54](#page=54). * Exclusive sales or purchasing agreements [54](#page=54). * **Can a Business Refuse to Sell?** * **Allowed when:** Freedom of contract applies, the company has low market power, there's a legitimate reason (risk, credit, capacity, non-compliance), or if a reseller fails to meet objective quality criteria in a selective distribution system [55](#page=55). * **Illegal when:** Under Article 102 TFEU, a dominant company refuses to supply if it harms competition or eliminates an effective competitor. This includes refusing to sell to prevent parallel trade, forcing RPM, discriminatory cutting off of supplies, or actions that lock out competitors, potentially invoking the "essential facility" doctrine [55](#page=55). ### 3.4 AI, Algorithmic Pricing, and Channel Conflict The increasing use of Artificial Intelligence (AI) in pricing presents new challenges for competition authorities. Concerns include algorithmic price coordination, tacit collusion enabled by shared vendors, AI-assisted RPM, and predictive repricing engines that pressure Minimum Advertised Price (MAP) or Manufacturer's Suggested Retail Price (MSRP) discipline. This can automate channel conflict and exacerbate price gaps, leading to increased grey market activity [49](#page=49). * **AI Pricing Breakdown:** * **Internal AI repricing based on own data:** Allowed as unilateral pricing [50](#page=50). * **Monitoring competitor prices via public sources:** Considered market intelligence [50](#page=50). * **Automatically aligning prices based on competitor data:** Risky and can amount to tacit collusion if it removes uncertainty between competitors [50](#page=50). * **Using the same repricing vendor/software across multiple competitors:** Risky if it leads to coordinated pricing behavior or joint price coordination [50](#page=50). * **AI used by brands to enforce MAP/MSRP or minimum resale price:** Illegal in the EU/Switzerland/UK as RPM is prohibited [50](#page=50). * **Sharing future pricing strategies (even via AI):** Considered price signaling or coordination [50](#page=50). * **AI manipulating discounts/promotions jointly with retailers:** Illegal if it impacts resale freedom [50](#page=50). ### 3.5 Jurisdictional Comparison of Channel Management Practices Different jurisdictions have varying approaches to channel management practices [57](#page=57). | Jurisdiction | RPM (Fixed Resale Price) | Selective Distribution Allowed? | Marketplace Ban Legal? | Notable Enforcement Style | | :----------- | :----------------------- | :---------------------------- | :------------------- | :------------------------ | | EU (DMA + VBER) | Hardcore illegal | Yes (objective, justified) | Allowed (Coty ruling) if quality-driven | Structured, slower but strong case law | | Switzerland | Strictly illegal (fines likely) | Yes (must be objective) | Allowed if justified, closely monitored | Fast, strict, SME protection | | UK (post-Brexit) | Illicit if pressure applied | Yes | Under scrutiny — allowed only if justified | Very aggressive | | USA | Rule of reason (may be legal) | Yes | Usually challenged if anti-competitive | More flexible but rising scrutiny | | China | Often illegal (if abusive) | Yes but monitored | Only temporary or weak restriction | Very strict on platform advantage | > **Tip:** Always consult with legal counsel to ensure compliance with the specific regulations of each market in which you operate [43](#page=43) [47](#page=47). ### 3.6 Summary of Permissible and Prohibited Channel Actions Understanding what is permissible and what is strictly forbidden is key to compliant channel management [58](#page=58). * **You CAN:** * Recommend resale price (RRP) [58](#page=58). * Use selective distribution [58](#page=58). * Differentiate offline vs. online pricing (if justified) [58](#page=58). * Use temporary channel exclusivity [58](#page=58). * **You CANNOT:** * Enforce minimum resale price [58](#page=58). * Ban all online sales [58](#page=58). * Block passive cross-border sales [58](#page=58). * Penalize retailers for price deviation [58](#page=58). --- # Strategies for managing and resolving channel conflicts This section details various strategies and mechanisms for effectively managing and resolving conflicts that arise within distribution channels. ### 4.1 Understanding conflict resolution styles Conflict resolution styles describe an individual's approach to managing disagreements, characterized by levels of assertiveness (concern for one's own goals) and cooperativeness (concern for the other party's goals). The five primary conflict resolution styles are [32](#page=32): * **Competition or Aggression:** High assertiveness, low cooperativeness. Focuses on achieving one's own goals without regard for the other party [32](#page=32). * **Collaboration or Problem Solving:** High assertiveness, high cooperativeness. Seeks to find mutually beneficial solutions that satisfy both parties' goals [32](#page=32). * **Compromise:** Moderate assertiveness and cooperativeness. Involves finding a middle ground where both parties make concessions [32](#page=32). * **Accommodation:** Low assertiveness, high cooperativeness. Prioritizes the other party's goals over one's own [32](#page=32). * **Avoidance:** Low assertiveness, low cooperativeness. Involves withdrawing from or ignoring the conflict [32](#page=32). ### 4.2 Strategies for conflict resolution Several approaches can be employed to resolve conflicts within distribution channels: #### 4.2.1 Institutionalized conflict resolution This involves embedding conflict resolution mechanisms into the structure of channel relationships. Examples include [33](#page=33): * Joint membership in trade associations [33](#page=33). * Personal exchanges and relationship-building across channel organizations [33](#page=33). * Cooptation, which involves bringing together representatives of channel members to address issues [33](#page=33). #### 4.2.2 Third-party mechanisms When direct resolution is difficult, involving a neutral third party can be effective [33](#page=33). * **Mediation:** A third party facilitates communication and helps the conflicting parties find common ground and win-win solutions [33](#page=33). * **Arbitration:** A third party makes a final and binding decision to resolve the dispute [33](#page=33). #### 4.2.3 Incentives Implementing pay-for-performance systems can align channel member incentives and reduce conflict by rewarding desired outcomes [33](#page=33). ### 4.3 Proactive strategies for managing channel conflict Preventing or minimizing conflict before it escalates is often more effective than resolving it. Strong channel stewardship plays a crucial role in this [34](#page=34). #### 4.3.1 Strong channel stewardship This approach focuses on building robust relationships and clear operating principles to preempt conflict. Key elements include [34](#page=34): * **Prevention:** * Implementing clear and consistent pricing strategies across different channels and within the company [34](#page=34). * Establishing clear territory strategies, avoiding overlaps between channel members at the same level [34](#page=34). * Conducting regular and productive discussions internally and with various channel members [34](#page=34). * Encouraging feedback from field sales teams [34](#page=34). * **Management:** * Communicating in a solution-oriented manner [34](#page=34). * Prompting channel members to understand each other's perspectives deeply [34](#page=34). * Shifting discussions from solely focusing on margin levels to emphasizing value-added solutions [34](#page=34). #### 4.3.2 Product differentiation and temporary exclusivity In multi-channel strategies, differentiating products or offering temporary exclusivity can reduce tension and conflict [35](#page=35). * **Product Differentiation:** Offering distinct product variants to different channels, potentially with varying service levels and price points, can create clearer market segmentation. For instance, Channel 1 might receive Product Variant A with high customer service and a higher price, while Channel 2 receives Product Variant B with lower customer service and a lower price [35](#page=35). #### 4.3.3 Channel Right Assortment (CRA) A CRA ensures a consistent and focused selection of products representing each brand's positioning within wholesale channels. This cascade from regional to country, country to channel, and channel to account, when implemented consistently, drives [36](#page=36): * Channel differentiation [36](#page=36). * Decreased price competition [36](#page=36). * Improved sell-through rates [36](#page=36). * Sell-in effectiveness [36](#page=36). * Consumer loyalty [36](#page=36). #### 4.3.4 Channel control systems and segmentation An in-depth understanding and precise segmentation of distribution channels enable better control, conflict management, and clear communication regarding prices, margins, and inventory. Benefits of an integrated and consistent retail segmentation include [37](#page=37): * Defining launch strategies for new product categories [37](#page=37). * Refining sales strategies for existing product categories [37](#page=37). * Developing assortments and range differentiation by channel [37](#page=37). * Effective differentiation between and within channels [37](#page=37). * More effective customer and brand portfolio management [37](#page=37). Segmentation can also support selective distribution models (open, open and regulated, selective), with the choice depending on the importance of required change and available resources for implementation and management [37](#page=37). > **Tip:** The legal framework governing competition and channel relations is complex and dynamic. Overlooking it can lead to costly mistakes. While it can assist in managing competition and conflict, regulatory frameworks often lag behind actual business practices [37](#page=37). > **Example:** A product launch, such as "BBR" in 2012, which was retired by 2014 after only three seasons, might serve as a cautionary tale of what can happen when channel strategies are not managed effectively, leading to a fiasco to avoid [40](#page=40) [41](#page=41). --- ## Common mistakes to avoid - Review all topics thoroughly before exams - Pay attention to formulas and key definitions - Practice with examples provided in each section - Don't memorize without understanding the underlying concepts

| Term | Definition | |------|------------| | Channel Conflict | A state of opposition or discord among channel members within a given distribution channel, arising from differing viewpoints, perceptions, sentiments, interests, or intentions. It can exist in latent, perceived, or manifest forms and occur at vertical or horizontal levels. | | Vertical Conflict | This type of conflict occurs between channel members operating at different levels of the distribution chain, such as a manufacturer and a retailer, or a wholesaler and a retailer. | | Horizontal Conflict | This conflict arises between channel members at the same level of the distribution chain, for instance, between two retailers or two wholesalers. | | Grey Market | The sale of authorized, branded products through distribution channels that are not officially authorized by the manufacturer, often occurring through discount outlets with reduced service levels. This is typically motivated by price differentials or excess inventory. | | Parallel Market | Often used interchangeably with Grey Market, this term specifically refers to the sale of products originating from foreign markets through unauthorized distribution channels. | | Counterfeiting (Black Market) | The illegal sale of fake goods that are falsely presented as branded ones, often within authorized channels. This is distinct from the grey market and is illegal in most jurisdictions. | | Vertical Restraint | An agreement or concerted practice between businesses at different levels of the distribution chain that dictates the terms under which goods or services are purchased, sold, or resold, potentially restricting or distorting competition. | | Resale Price Maintenance (RPM) | A type of vertical restraint where a supplier attempts to control the minimum price at which a distributor or retailer resells their products. This is generally illegal in many jurisdictions. | | Dual Distribution | A strategy where a company sells its products both directly to consumers (D2C) and through independent intermediaries like distributors or retailers. | | Digital Markets Act (DMA) | An EU regulation aimed at ensuring fair competition in digital markets by governing dominant online platforms, referred to as "gatekeepers," to provide businesses and consumers with more freedom and choice. | | Digital Services Act (DSA) | A regulation in the EU that governs online content and commercial activity, focusing on aspects like unlawful products, counterfeits, and transparency of marketplace sellers to create a safer digital environment. | | Selective Distribution | A distribution strategy where a supplier permits only certain authorized retailers to sell its products. This selection is based on predefined, objective quality criteria that are applied consistently and fairly. | | Algorithmic Collusion | A practice where algorithms used by competing companies lead to coordinated pricing behaviors, potentially amounting to tacit collusion and artificial price alignment without direct communication. | | Channel Stewardship | A proactive approach to managing distribution channels by establishing clear strategies, consistent communication, fostering understanding among channel partners, and focusing on value-added solutions rather than just pricing. | | Mandatory Minimum Advertised Price (MAP) | A policy where a manufacturer requires retailers to advertise products at or above a certain minimum price. While not always directly enforceable as a minimum resale price, it can still be a point of contention. | | Geoblocking | The practice of blocking consumers from accessing e-commerce sites or services based on their geographical location. This is increasingly being restricted by regulations like the EU's geoblocking regulation. | | Assortment Strategy | The plan that defines which products a retailer or distributor will offer to its customers, considering factors like brand positioning, customer needs, and market competition. |