TCWD111 - Lesson 3

What is a MARKET INTEGRATION?

--- a situation in which separate markets for the
same product become one single market
(Cambridge Business English Dictionary )

Example :
*when an import tax in one of the market is removed
 Horizontal Integration
❖ is a type of Integration, by combining the market agencies to form
a union to reduce their effective member and the extent of actual
competition in market

❖ Partnership: collaborating with another company to tackle the

market together (with a common product, promotion, sales strategy, etc.)
❖ Merger: when two different companies in the same market become one
❖ Acquisition: when a company buys another within the same market

4
 Conglomerate Integration
❖ A combination of agencies or activities not directly related
to each other may operate under a unified management

7
 Vertical Integration
It occurs when a firm performs more than one activity in the
sequence of the marketing process.
➢ Forward integration
•if a firm assumes another function of marketing which is
closer to the consumption function, it is a case of forward
integration
➢ Backward integration
•this involves ownership or a combination of sources of supply
PREFERENTIAL TRADING
AGREEMENT

➢ trade agreements between countries

in which they lower tariffs for who
have signed the agreement, but not
for the rest of the world
CHINA-BANGLADESH

BANGLADESH-BHUTAN
FREE TRADE
AGREEMENT
➢ reduces barriers to trade among
member countries to zero, but each
member country still has autonomy in
deciding for external rate of tariff for
its trade with non-member countries
❖ North American Free Trade Agreement (NAFTA)
--- was implemented in order to promote trade between the U.S.,
Canada, and Mexico

❖ The ASEAN Free Trade Area (AFTA)

--- is a trade bloc agreement by the Association of Southeast Asian
Nations supporting local manufacturing in all ASEAN countries
CUSTOMS UNION

➢ an agreement to remove trade barriers

among members and impose uniform
trade restrictions against non-members

20
➢ an economic Customs Union founded in 1948
between Belgium, Netherlands and Luxembourg
COMMON MARKETS

➢ allows for the movement of labor

and capital within the member
countries

➢ Custom Unions + integration of

factor markets (capital and labor)
Example:
❖ EUROPEAN COMMON MARKET is the example
of common market which aims to provide the free
movement of goods, capital, services and labor within
the EUROPEAN UNION

➢ it refers to an agreement between countries that allows

product, services and workers to move freely across
borders
❖The Southern Common Market (MERCOSUR)
--- el Mercado Común del Sur (the Common Market of the South)
is a regional integration process, initially established by Argentina,
Brazil, Paraguay and Uruguay, and subsequently joined by
Venezuela and Bolivia

❖The Common Market for Eastern and Southern

Africa (COMESA)
--- is a free trade area that encompasses 19 countries stretching
from Libya to Zimbabwe
 REFERENCES
 https://www.tfafacility.org/united-nations-conference-trade-and-development-unctad
 https://www.routledge.com/United-Nations-Centre-on-Transnational-Corporations-Corporate-Conduct-
and/Hamdani-
Ruffing/p/book/9781138896536#:~:text=The%20United%20Nations%20Centre%20on,multiplied%20and%20deepe
ned%20with%20globalization.
 https://atom.archives.unesco.org/go-59
 https://www.encyclopedia.com/social-sciences/encyclopedias-almanacs-transcripts-and-maps/transnational-
corporations#:~:text=A%20transnational%20corporation%20(TNC)%20is,xii
 https://courses.lumenlearning.com/boundless-management/chapter/the-global-
corporation/#:~:text=of%20each%20unit.-
,Global%20Corporations,markets%20in%20attaining%20revenue%20generation.
 https://www.unescwa.org/association-southeast-asian-nations-free-trade-are
 https://www.studocu.com/ph/document/polytechnic-university-of-the-philippines/the-contemporary-world
 https://slideplayer.com/slide/5930801/
 https://abhipedia.abhimanu.com/Article/IAS/NDI5MAEEQQVVEEQQVV/Stages-of-Economic-Integration-and-
trends-in-globalization--Economic-Affairs-IAS
 https://www.consuunt.com/horizontal-integration/