Value Chain Glossary: Market Signals
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Market Signals
The transfer of information from the market,(such as changes in the nature and quantity of end market demand, changes in supply levels of available inputs and products) transmitted through the value chain. Continual assessment of market information at all levels of the chain is required for affective adjustments in competitive market activities and donor interventions.
In Central America, supermarkets are key communicators of market signals downstream through the value chain. Supermarket retail chains throughout the region have been quick to respond to shifting consumer demands in terms of price, quality, diversity, shopping environment and convenience. Their flexibility and adaptability to market signals has allowed them to capture significant market share. The ability of supermarket retailers to respond to changes in market demand is directly correlated to the ability of producers and intermediaries to fill orders that meet market specifications. Wal-Mart Central America's purchase of a major share of the holding company that owns Hortifruti, a regional agriculture supplier, has provided a governance structure for direct communication of market information and technical assistance between the market and the producers that has enabled Wal-Mart to meet dynamic market demands.[1]
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Footnotes
- ↑ [1] microREPORT:Hortifruti in Central America: A Case-Study About the Influence of Supermarkets on the Development and Evolution of Creditworthiness of Small and Medium Agricultural Producers. Gonzalez-Vega, Claudio; Chalmers, Geoffrey; Quiros, Rodolfo; Rodriguez-Mega, Jorge. April, 2006.
