DECA Marketing Cluster Practice Exam

What characterizes horizontal conflict in marketing channels?

1. A dispute between different levels of distribution

2. A disagreement among partners on the same level

3. A conflict related to pricing strategies

4. A negotiation for exclusive distribution agreements

The correct answer is: A disagreement among partners on the same level

Horizontal conflict in marketing channels is characterized by disagreements among partners that operate at the same level within the distribution chain. This typically occurs between retailers or distributors who compete for the same customer base, creating a situation where one retailer may feel that another is undermining their efforts through aggressive pricing, promotions, or territorial encroachment. For example, if two retailers in the same geographic area sell the same product and one decides to offer significant discounts, this could lead to conflict because the other retailer might lose business as a result. Such conflicts can negatively affect relationships between businesses that are supposed to cooperate and can lead to a variety of issues within the marketing channel, such as price wars or loss of brand loyalty. The other scenarios offered in the choices describe different types of conflicts. Disputes between different levels of distribution, such as between manufacturers and retailers, illustrate vertical conflict. Conflicts over pricing strategies can refer to any level within the channel but typically fall under broader issues rather than specifically horizontal conflicts. Lastly, negotiations for exclusive distribution agreements involve the relationships between supply partners and often pertain to vertical strategies rather than horizontal interactions.