MARKET

INTEGRATION
 “ IS A STATE OF AFFAIRS OR A
PROCESS INVOLVING ATTEMPTS
TO
COMBINE SEPARATE NATIONAL
ECONOMIES INTO A LARGER

”
ECONOMIC REGIONS
-Ulrich Koester

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 1. Preferential agreement
Involves lower trade barriers between those countries, which have
signed the agreement.

2. Free Trade Area

Reduces barriers to trade among member countries to zero.

Forms of 3. Custom Union

In this form, Countries agree to abolish tariff and non-tariff barriers to
trade in goods flowing between them.

Integration
4. Common Markets
Allows for free movement of labor and capital within the member
countries.

5. Economic Union
Is the highest form of economic integration.
 TYPES OF INTEGRATION

VERTICAL CONGLOMER HORIZONTAL

INTEGRATION ATION INTEGRATION

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 HORIZONTAL INTEGRATION
In this type of integration, some marketing
agencies combine to form a union with a
view to reducing their effective number and
the extent of actual competition in the
market.

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ADVANTAGES DISADVANTAGES
 Larger Market Share  Monopoly
 Increased Revenue  Reduced flexibility
 Reduced competition

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 VERTICAL INTEGRATION
It is a linkage of two or more functions in the
marketing process within a single firm or
under a single ownership.

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 FORWARD AND BACKWARD
INTEGRATION

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 Forward Integration
Forward integration is when a company expands its ownership of the
production of its product in order to gain access to new markets and increase
its profits.

Backward Integration
Backward integration is when a company expands its ownership of the distribution
side of its product.

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ADVANTAGES DISADVANTAGES
 More control over the  It requires a huge
Business amount of money
 Lowers transaction  Reduces flexibility
Costs
 Investment in
specialized Assets

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 CONGLOMERATION
The process by which a corporation is
formed, such as when a parent company
starts to acquire subsidiaries, is referred to
as conglomeration.

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ACTIVITY:
1.What is Conglomeration and how does it occur?
2.Look for examples of conglomerated businesses, then illustrate
each one to show how it relates to its various subsidiaries.

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