I see some techs refer to affecting foreign market penetration (and foreign penetration into my domestic market), and the manual also makes mention of it but then doesn't explain anything on the subject. Is this process automatic? Is there a way to see or affect how much I'm selling into foreign markets? Is this feature even working/implemented?
Better trade chances is a different thing, and btw, totally useless, as all major powers have their own trade zone in a way. Its only use is for Germany and Italy until their unification, or you desire to sell goods in a shared trade zone
As chrism said, foreign market penetration lowers your own ability to supply all your populations needs. So say without FMP, your people can buy 100 Food, but with it you can only sell them 80.
There are two ways to lower FMP: one way is to crank up your tariffs, which will piss off the other nations. The other is through tech
I don't know what was intentionally planned, but if you raise your tariff settings, you see that the consumption raises as well - and vice versa. I think thats all to it.
The techs do the same (increasing consumption, that is) but without the negative side effects that high tariffs have on your diplomatic relations
If we are talking about the same thing, this is a quick "definition" of Market penetration that I made:
The Market penetration reduces the demand of your population, as they are considered buying from other nations (abstracted), so it is not a good thing to have. A higher market penetration means that they are fulfilling their demands from "another source" and so they do not buy from your stockpile (like stated above, that "other source" is "abstracted" right now).
That's why techs reduce the effect of the market penetration, to allow you to sell more to your population, and so, increasing your revenue.