Power (definition)
" Power is the ability of one channel member (a) to get another channel member (b) to do something it otherwise would not have done."
dependence = x * y
x = ?
y = ?
x = utility y = scarcity
What is scarcity?
existence of substitutes/competitors and switching cost The higher the scarcity of A for B, the more dependent B is on A.
Name the 5 sources of power.
Reward Power Coercive Power Expert Power Legitimate Power Referent Power
What is Reward Power ?
A reward is a benefit, that a party receives for altering its behaviour or complying with its beheaviour Reward power is the capacity to bestow rewards
Name 2 Examples for Reward Power
1. Credible channel policies Pledges Conflict resolution policies 2. Market development programs Sales support Trade show support (=sales assistant) Certification programs 3. Supplement information programs Systematic, more sophisticated information exchange 4. Incentive programs Cash, discount 5. End user encouragement programs ( Create pull effect from end-user ) Reseller marketing programs Co-marketing Risk reduction/warranties
What is coercive power?
"Coercive power is the capacity to dispense punishment if a request or demand is not complied with"
What is Expert power?
"The influencer has special knowledge or expertise that is useful to the target and that the target does not possess"
What are the issues with Expert Power?
Durability --> Value of information diminishes once used! Thus continuous investment needed to build expert power
What is legitimate Power?
"The target has the obligation to comply with the request of the influencer"
Name the two differentiations concerning Legitimate Power!
1. Legal legitimate power Driven by law ( law of commerce, law of contracts) Exists objectively 2. Traditional legitimate power Not driven by law, but by norms Norms are often tied to cultural values
What is referent Power?
" The influencer is viewed as a reference and the target wants to look like the influencer or wishes to be identified publicly with the influencer" "ability to confer prestige"
How can an imbalanced relationship work?
Equitable treatment Distributive justice (resulting distribution of rewards) Procedural justice (how rewards are divided)
Name 4 categories of communication strategies!
1) Promise strategy : If you do what we wish, we will reward you 2) Threat strategy : If you do not what we wish, we will punish you 3) Legalistic strategy : You should do what we wish because in some way you agreed to do it 4) Request strategy : Please do what we wish 5) Information exchange strategy : Without mentioning the desired goal, pursuing a discussion to change the counterparts perception in favour of the influencer. 6) Recommendation strategy : You will be more profitable if you do what we wish
How do you measure dependence?
directly : rate utility rate scarcity indirectly Percentage of sales or profits that company derives from partner
