Negotiation Strategies and the Nature of Channel Relationships

In recent years, retailers have placed greater emphasis on developing long-term relationships to obtain sustainable benefits on issues such as product quality, price, and markdown allowances. The author examines the impact of situational factors such as the time orientation of a relationship and the importance of the issues to be resolved on the use of various negotiation strategies (problem solving, compromise, and aggressive) in channel relationships. He also investigates the impact of different strategies on channel member outcomes and satisfaction. The data used to test the model were obtained in a mail survey of 124 retail buyers in six regional department store chains. The study results indicate that when retailers are long-term oriented, problem-solving and passive aggressive strategies are used for resolving conflicts on major issues. The use of problem-solving strategy to resolve major conflicts resulted in higher outcomes and greater satisfaction than either compromise or aggressive strategies. The findings also provide insights on the use of various negotiation strategies by retailers to resolve conflicts on important and relatively unimportant issues.