Chapter 2: Market Integration

Question 1

_____ shows the relationship of the firm in the market.

Answer 1

Integration

Question 2

The extent of integration influences the conduct of the firms and consequently the marketing efficiency. The behavior of a highly integrated market is different from that of a disintegrated market. Markets differ in the extent of integration and therefore, there is a variation in their degree of efficiency.

Answer 2

MARKET INTEGRATION

Question 3

________ have defined market integration as a process which refers to the expansion of firms by consolidating additional marketing functions and activities under a single management.

Answer 3

Kohls and Uhl

Question 4

Example of market integration are the

Answer 4

establishment of wholesaling by food retailers and the setting up of another plant by a milk processor.

Question 5

There are Basic Types Market Integration

Answer 5

Horizontal Integration, Vertical Integration, Conglomeration

Question 6

this occurs when a firm or agency gains control of other firm or agencies performing similar marketing functions at the same level in the marketing sequence.

Answer 6

Horizontal Integration

Question 7

In this type of integration some marketing agencies combined to form a union with a view to reducing their effective number and the extent of actual competition in the market. It is an advantage for members who join the group.

Answer 7

Horizontal Integration

Question 8

this occurs when a firm performs more than one activity in the sequence of the marketing process. It is linking together of two or more functions in the marketing process with a single firm or under a single ownership.

Answer 8

Vertical Integration

Question 9

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 reduces the number of middle men in the marketing channel.

Answer 9

Vertical Integration

Question 10

a combination of agencies and activities not directly related to each other may, when it operates under a unified management, be term a conglomeration.

Answer 10

Conglomeration

Question 11

Reasons for Marketing Integration

Answer 11

1. To remove transaction costs
2. Foster competition
3. Provide better signal for optimal generation and consumption decisions.
4. Improve security of supply

Question 12

Degree of Integration

Answer 12

1. Ownership Integration
2. Contract integration

Question 13

This occurs when all the decisions and assets of firms is completely assumed by another firm.
Example: A processing firm which buys a wholesale firm.

Answer 13

Ownership Integration

Question 14

This involve an agreement between two firms on certain decisions, which each firm retains it separate identity.
Example: tie up of a dhal mill with pulse traders for supply of purse grains.

Answer 14

Contract integration

Question 15

. The measurement or assessment of marketing integration may be attempted at two levels.

Answer 15

1. Integration among firms of a market.
2. Integration among specially separated markets.

Question 16

-the degree of correlation between two prices is taken as an index of the extent to which the two markets are integrated.

Answer 16

Price Correlation

Question 17

-A higher degree of correlation coefficient indicates a _____ at least in terms of pricing the product between market centers and vice versa

Answer 17

greater degree of integration

Question 18

-the correlation in the price of commodity in nay markets is unify under _____

Answer 18

Spatial price integration

Question 19

Spatial Price Differential and Transportation Cost

Answer 19

1. Correlation method
2. Revallion Procedure
3. Co integration Approach
4. Parity Bound Models