Effects of channel conflict upon managers and salespersons with the UK automotive industry's manufacturer-dealer dyad

In the UK, most European motor manufacturers hold franchise agreements with third party dealerships (ie - not manufacturer-owned), which are relied upon by manufacturers for sales, service and aftersales representation to retail customers, and for delivery of brand experience within each customer transaction. A number of developments have led to increased difficulties faced by manufacturers in controlling and reducing channel conflict, for example: since the mid-1990s, dealerships have increasingly operated multi-franchised sites, in which rival manufacturers' competing products are offered under one roof; the widespread manufacturer practice of offering dealerships large discounts to 'pre-register' unsold vehicles at month-end to achieve short-term 'sales' targets corrodes dealers' respect for manufacturers and places each partner on opposing sides of a negotiating table, encouraging conflict. This distressing of channel relationships is perhaps more damaging than the more publicised distressing of new vehicle pricing, further undermining brand equity and – through the phenomenon of “Supply Chain Contagion” (McFarland et al, 2008) - the quality of customer brand experiences.

The current research outlined in this paper aims to address these key contemporary issues in the UK motor industry by exploring the effects of channel conflict upon managers and salespersons within the UK automotive industry’s manufacturer-dealer dyad and gaps identified in the literature and discussed below will also be addressed.

Most literature exploring conflict within the marketing distribution channel is quantitative. Few articles limit study to the motor industry specifically, and most concern themselves with the U.S. market. Research in this area seemingly peaked in the 1970s. The perspective has been overwhelmingly ‘top-down’, both in deductive methodology and contextualisation of channel conflict against purely commercial considerations rather than the ‘human’ experiences of those managers and salespeople working within the dyad. This study intends to redress this imbalance.