MODULE 6

Question 1

What is market integration?
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Answer 1

Answer: Market integration refers to the unification of distinct and often geographically separated markets into a single, more efficient system. It allows for the free flow of goods, services, capital, and labor, driven by globalization, technological advancements, and trade liberalization.

Question 2

Why is market integration important?
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Answer 2

Answer: It affects personal finance, consumer prices, and entrepreneurial opportunities by making markets more efficient and interconnected.

Question 3

What are the reasons for market integration?
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Answer 3

Answer:

To remove transaction costs
To foster competition
To provide better signals for optimal generation and consumption decisions
To improve the security of supply

Question 4

When are markets considered integrated?

Answer 4

🔹 Answer: When prices among different locations or related goods follow similar patterns over a long period, showing a proportional relationship between markets.

Question 5

What role does a marketer play in market integration?

Answer 5

🔹 Answer: A marketer acts as an integrator, collecting feedback and vital inputs from other channel members and consumers, and coordinating multiple organization functions to provide product solutions.

Question 6

What are examples of market integration?
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Answer 6

Answer:

Food retailers establishing wholesaling facilities
A milk processor setting up another plant
Facebook buying Instagram and WhatsApp to expand the market for image sharing

Question 7

What is forward integration?
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Answer 7

Answer: When a company moves closer to the final consumer by taking on a marketing function. Example: A wholesaler deciding to also handle retailing.

Question 8

What is backward integration?
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Answer 8

Answer: When a company owns or combines sources of supply. Example: A processing firm gathering or buying products directly from villages.

Question 9

. What is balanced vertical integration?

Answer 9

🔹 Answer: When a company combines both forward and backward integration strategies.

Question 10

What is conglomeration?
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Answer 10

Answer: The merger of different businesses or activities that aren’t necessarily related but are managed under one umbrella.

Question 11

What are examples of conglomerates?

Answer 11

🔹 Answer:

SM Group of Companies
Lucio Tan Group of Companies
Gokongwei Group of Companies
PHINMA Group of Companies
Manuel Villar Group of Companies

Question 12

What are the effects of conglomeration?
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Answer 12

Answer:

Risk Reduction: Diversifying into different industries helps spread out risks.
Financial Leverage: Mergers and acquisitions increase financial power.
Empire Building: Conglomerates aim to expand and grow their business empires.