Market Integration

EDWARD B. AGRAVANTE, MM, MBA, JD

Laguna State Polytechnic University
Market
-is an institutional structure that permits people and
organizations to exchange goods, services and labor.
GLOBAL MARKET

• A global market is not limited to specific geographic locations

but rather involves the exchange of good, services, and labor
anywhere in the world.
• Global market integration means that price differences
between countries are eliminated as all markets become one.
Foreign trade helps the integration of markets because it
reduces barriers to trade and increases fluidity between
markets.
Some individual examples of global marketing
include:
• (excluding oil and energy)
• Wal-Mart,Toyota,Volkswagen,Japan Post Holdings,Glencore
International (commodities), ING (financial services), General
Motors, Samsung Electronics, Daimler AND General Electric
Source: Fortune Magazine
• Coca-Cola started selling internationally back in 1919, and is now
present in more than 200 countries. In order to keep a consistent
brand, Coke tastes the same in every region (although outside of the
United States, the recipe uses sugar instead of high-fructose corn
syrup), but the size, shape, and labeling of the bottle are changed to
match the norms in each country. While the company formerly used a
standardized advertising approach, it has changed to adapt
advertising messages to local culture. Additionally, it adjusts its
product line-up to fit local tastes; including a number of additional
beverage brands.
• McDonald’s makes certain that a Big Mac tastes the same in every
country; but it also varies items on its menu according to local
tastes. Customers in Mexico can order a green chili cheeseburger,
customers in Korea get to eat bulgogi burgers; and customers in
many Arab countries can enjoy the McArabia, a grilled kofta
sandwich on pita bread.
• Starbucks also adjusts their menu to fit local tastes. In Hong Kong,
for example, they sell Dragon Dumplings. And as a global buyer of
coffee, the company has long had a reputation for engaging local
cultures according to their needs.
• In Japan, Kentucky Fried Chicken has managed to associate their
product with Christmas, and every year Japanese line up around the
block to get their KFC chicken on that day.
The Scope of International Marketing – Major Types of Businesses

1. Imports
• This is the easiest form of International Marketing a company
can get into – Importing from one country and selling in the
domestic market. This is possible only in a scenario where
there is demand in the domestic market for the imported
goods or services. Companies also localize the imported
product depending on the needs of the market.
2. Exports
• Opposite of Importing and selling, companies export their
finalized products to international markets or on to their other
franchises in far off markets where they can sell the products
to their localities for generating huge revenues.
3. Contractual Agreements
• Whenever, business moves beyond their domestic boundaries, its
scope of international marketing exposes it to greater chances of
doing a lot more business. The market expands, the consumer base
expands and even volumes and profits expand. Companies grow
exponentially by getting into contractual agreements with several
other partners overseas.
4. Joint Venturing
• Joint Venture is the name of a collaborative association of two
brands for a reasonable period of time. This association then gives
birth to an even new firm that works individually and pursues
goals other than parent companies. This new firm works under the
banner of both the “venturing” brands and the division of profits
and losses takes places between both in a certain ratio.
5. Fully Owned Manufacturing
• Relatively a higher level of engagement in the foreign soils,
companies can own a fully owned manufacturing in a country. The
company can use this facility to sell products within the country or
export to nearby nations. Owning a fully owned manufacturing
helps companies control quality.
Some of the Financial Institutions that boost
global economy

World Bank is an international financial institution that provides

loans and grants to the governments of poorer countries for the
purpose of pursuing capital projects.
• The headquarters of the World Bank is situated in Washington
DC, United States.
• World Bank functions as an international organization that
fights poverty by offering developmental assistance to middle-
income and low-income countries. By giving loans and offering
advice and training in both the private and public sectors, the
World Bank aims to eliminate poverty by helping people help
themselves. 
The World Bank serves two mandates:

• To end extreme poverty, by reducing the share of the global

population that lives in extreme poverty to 3% by 2030.
• To promote shared prosperity, by increasing the incomes of
the poorest 40% of people in every country.
The Asian Development Bank (ADB) is a regional development bank
established on 19 December 1966, which is headquartered in the
Ortigas Center located in the city of Mandaluyong, Metro Manila,
Philippines. The company also maintains 31 field offices around the
world to promote social and economic development in Asia.
• Motto: Fighting Poverty in Asia and the Pacific
Countries that ADB assisted: Philippines, Afghanistan, Bangladesh,
Bhutan, Cambodia, Indonesia, Mongolia, Nepal, Pakistan, Papua New
Guinea, Solomon Islands, Sri Lanka, Tajikistan, and Vietnam.
• The Asian Development Bank's primary mission is to foster growth
and cooperation among countries in the Asia-Pacific Region. 
• The Asian Development Bank provides assistance to its developing
member countries, the private sector, and public-private
partnerships through grants, loans, technical assistance, and equity
investments to promote development. The ADB regularly facilitates
policy dialogues and provides advisory services. They also use co-
financing operations that tap a number of official, commercial, and
export credit sources while providing assistance.
What is a Multinational Corporation?

A multinational corporation is a company that operates in

its home country, as well as in other countries around the
world. It maintains a central office located in one country,
which coordinates the management of all other offices such
as administrative branches or factories.
Characteristics of a Global/Multinational
Corporation
1. Very high assets and turnover
To become a multinational corporation, the business must be large and must own a
huge amount of assets, both physical and financial. The company’s targets are so high
that they are also able to make substantial profits.
2. Network of branches
Multinational companies keep production and marketing operations in different
countries. In each country, the business oversees more than one office that functions
through several branches and subsidiaries.
3. Control
In relation to the previous point, the management of the offices in other countries is
controlled by one head office located in the home country. Therefore, the source of
command is found in the home country.
4. Continued growth
Multinational corporations keep growing. Even as they operate in other countries, they
strive to grow their economic size by constantly upgrading and even doing mergers
and acquisitions.
5. Sophisticated technology
When a company goes global, they need to make sure that their investment
will grow substantially. In order to do achieve substantial growth, they need
to make use of capital-intensive technology, especially in their production
and marketing.
6. Right skills
Multinational companies employ only the best managers who are capable of
handling huge funds, using advanced technology, managing workers, and
running a huge business entity.
7. Forceful marketing and advertising
One of the most effective survival strategies of multinational corporations is
spending a huge amount of money on marketing and advertising. It is how
they are able to sell every product or brand they make.
8. Good quality products
Because they use capital-intensive technology, they are able to produce top-
of-the-line products.
Advantages of Multinational Corporations
• Locals employed in the industries receive high levels of training, as
international standards must be met and maintained.
• The MNCs are able to sell far more products than other types of
firms because they have the ability to set up factories and produce
goods in many countries.
• The MNCs achieve great economies of scale.
• The MNCs take advantage of different wage levels in different
countries.
• The host countries of MNCs benefit from the large injections of
foreign currency that the MNC might bring.
Disadvantages of Multinational Corporations

• It can be difficult for governments to control MNCs due to their size

and power.
• The MNCs might use overseas personnel instead of recruiting
workers locally. This is especially true for management and skilled
worker positions.
• MNCs companies may relocate anytime resulting in the loss of
employment in their host countries.
THANK YOU!