Part 5 Place Dynamics
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customer. For this reason, a channel of
distribution is often called a supply chain.
You can visualize each step in the channel
of distribution as being one of the links
in the supply chain. The supply chain is
visualized vertically, with the raw material at
the top and the final customer at the bottom.
Products start at the top and move from link
to link to reach the final customer, 26-8.
Each step in a supply chain can be
referred to as a segment. In the simple supply
chain shown in Figure 26-8, the producer,
wholesaler, retailer, and final consumer are
segments of the supply chain. In a supply
chain, each segment is the customer of
the preceding segment. In Figure 26-8, the
wholesaler is the producer’s customer.
The retailer is the wholesaler’s customer. The
final customer in the consumer market is
the retailer’s customer.
Similarly, each segment is the supplier of
the following segment. In Figure 26-8, the
producer supplies products to the whole­-
saler. The wholesaler supplies products to
the retailer. The retailer supplies products to
consumers.
Supply chains (in other words,
distribution channels) can be long or short.
Services usually have very short supply
chains, direct from the service provider to the
customer. Manufactured goods often have
very long and complex supply chains. These
Supply Chain Example
Producer
Wholesaler
Consumer
Retailer
Jane’s
Convenience Store
Tamar’s Apple
Distributors, Inc.
Roberto’s
Apple Orchard
You
Customer Customer
Supplier Supplier
SALE
26-8
A channel of distribution is often referred to as a supply chain. The four segments of this supply chain
are the producer, wholesaler, retailer, and consumer. Each segment is the supplier of the following
segment. Each segment is the customer of the preceding segment.