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Introduction
GE side-by-side refrigerators is stated at Monterey (Mexico), than goods are shipped by truck to Pegasus (the USA) and delivered to distribution center. At this stage, GE has numerous competitors such as Siemens AG and Bosch. Both of these companies create effective supply chains outsourced abroad. Similar to GE they produce their refrigerators abroad and deliver to the end consumers by trucks or by train. In this case, channel decisions influence prices, middlemen activities, and margins. They strongly affect inventory situations and production fluctuations, as well as marketing policies in such areas as advertising, branding, product lines, personnel selling, and physical distribution. Yet channel selection often receives less attention than such areas as the allocation of advertising budgets or the motivating of salesmen. Although a continuing task, channel selection is often treated as a decision to be made once for a relatively long period of time. The strength of Siemens AG and Bosch is that they try to avoid terminal stations and deliver their product to distribution center (Cohen and Roussel, p. 37). This case shows that whereas channel decisions usually involve long-run commitments, channel policy is not irrevocable. It must be reviewed and changed to improve efficiency. The wrong channel choice can severely handicap a program, especially for a new product, and yet switching channels is not likely to be a frequent occurrence because it is a disruptive and costly undertaking.
Main body
The second supply chain involves customers travel to retail stores and the process of ordering. Two types of competitors can be identifies at this stage: direct competitors of GE (Siemens AG and Bosch) and indirect competitors (all companies that produced and sold refrigerators). The main competitor is Whirpool. Also, consumers can choose another type of a refrigerator if it has lower price and more confinable. The main competitive types are compressor refrigerators or refrigerators with dual power gas/electricity units. In this case, channel selection is not entirely rational, relevant factors are usually considered. These decisions govern and affect other aspects of the marketing mix, including physical distribution, personal selling, advertising, credit, sales promotion, and product service. Through time, changes in the channels of distribution are not readily made, though, in theory, managers should continuously evaluate pertinent factors and select and shift channels accordingly (Cohen and Roussel, p. 33).
At the third supply chain stage, the main competitors are delivery and transportation companies. If GE does not propose free delivery service, other companies will benefit from this situation. Some of such companies propose discounts and bonus systems for repeat clients. In general, the concentration or diffusion of markets, their geographic spread, and customer wants and needs affect channel decisions. In most situations, however, the choice is neither direct nor simple. Workable rather than optimal choices must be made because of the lack of complete information. Since existing alternatives present limitations and the wisdom of decisions is determined by unpredictable future events and long-run commitments, management must deal with expectations (Cohen and Roussel, p. 33). Nevertheless, the consideration of channel factors can make the decision a very logical one. The analysis shows that GE and LG refrigerators are faced with competition at every stage of its supply chain. Thus, channel analysis and evaluation is important; it is part of the marketing audit. Adjustments must be made continuously, based on criteria of channel performance. Profitability, sales volume, number and kinds of units sold, and facilities often serve the purpose, with company records, warranty cards, salesmens report, panels, and retail audits providing useful data.
Works Cited
Cohen, Ch., Roussel, J. Strategic Supply Chain Management. McGraw-Hill; 1 edition, 2004.
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