Market Integration- Types of Market Integration, Degree and Effects of Market Integration #economics #agriculturaleconomics #marketing

1. Naseeb Choudhary
Department of Agricultural Economics
CCS Haryana Agricultural University, Hisar
E-mail: naseeb@hau.ac.in

2. Definition
 Kohls and uhl have defined Market Integration as a process which refers
to the expansion of the firm by consolidating additional marketing
functions & activities under a single Management
If markets are Integrated, they ideally have the following features:
• Information travels quickly.
• Demand and supply in the two markets adjust very quickly due to efficient
mobility of goods.
• Price adjustment in the two markets also takes place freely and quickly.
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4. Types of Market Integration
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Vertical
Market
Integration
Forward
Vertical
Backward
Vertical
Balanced
Vertical
Horizontal
Market
Integration
Conglomeration
Market
Integration

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6. Horizontal Integration
• This occurs when a firm gains control of other firms performing similar
marketing functions at the same level in the marketing sequence.
• 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.
• It is Advantageous for the members who join the group.
• Example- Vodafone & Hutchison, ACC & Damodar Cement, ACC &
Damodar Cement, META(Facebook & Whatsapp), RBI, SC.
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7. Vertical Integration
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• This occurs when a firm performs more than one activity in the sequence
of the marketing process.
• It is a linking together of two or more functions in the marketing process
within a single firm or under a single ownership.
• This type of integration makes it possible to exercise control over both
quality and quantity of the product from the beginning of the production
process until the product is ready for the consumer.
• It reduce the number of middle man in the marketing channel.
• Example- Netflix, Zara, Ikea.

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9. Conglomeration Integration
• A combination of agencies or activities not directly related to each other,
When it operate under a unified management, be termed a
conglomeration.
• Examples- Hindustan Unilever ltd, Birla group, Adani, Tatas, ITC, Nastle.
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10. Degree of Integration
 Ownership integration
This occurs when all the decision and assets of a firm are
completely assumed by another firm.
Example- A processing firm which buys a wholesale firm.
 Contract integration
This involves an agreement between two firms on certain
decisions, while each firm retains its separate identity.
Example- Tie up of a dhal meal with pulse traders for supply of pulse
grain.
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11. Effects of Integration
• Integration is an attempt at organizing or coordinating the marketing
processes to increase operational efficiency and acquire grater power over
the selling or buying process.
• Due to Integration middle man are reduced and followed by MM earned
by them hence, price also will not increase further if market is well
integrated.
• Gaining a larger share of market and higher profit.
• Risk reduction through diversification
• Lowering the cost through achieving operational efficiency.
• Difference in the price in integrated market should be equal if they are
well integrated.
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12. References
• Agricultural Market Integration in India-Book by Michal Andrle and Patrick
Blagrave.
• Agricultural Marketing in India-Book by Acharya and Aggarwal.
• https://agricoop.nic.in
• https://www.fao.org
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13. SYMBOL OF TRUST