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Московская финансово-промышленная академия Варенина Л.П.

The English Language of Marketing Москва, 2005 Варенина Л.П. The English Language of Marketing / Московская финансово-промышленная академия, М., 2005 г., 110 с.

© Варенина Л.П., 2005 © Московская финансово-промышленная академия, 2005 2 Содержание Предисловие..................................................................................................... 4 UNIT ONE. THE SCOPE OF MARKETING.................................................. 5 UNIT TWO. PRODUCT PLANNING........................................................... 12 UNIT THREE. PRODUCT POLICY: WHAT SELLS.................................. 20 UNIT FOUR. CHANNELS OF DISTRIBUTION......................................... 29 UNIT FIVE. PRICING................................................................................... 39 UNIT SIX. COMMUNICATION: PROMOTION & SELLING................... 49 UNIT SEVEN. FROM MAKER TO USER................................................... UNIT EIGHT. RESEARCH........................................................................... UNIT NINE. THE FUTURE OF MARKETING........................................... GRAMMAR REFERENCE............................................................................ Предисловие Данное учебное пособие предназначено для студентов второго курса специализирующихся в области маркетинга. Целью данного пособия является отработка навыков чтения и понимания специального текста, усвоение терминологической лексики данной области специализации и грамматической структуры текста.

Пособие содержит оригинальные тексты по маркетингу, отражающие специфику лексики данного подъязыка и грамматические структуры типичные для специального текста.

Пособие содержит 9 разделов, грамматический справочник, руководство по изучению данного материала, рабочую программу. В каждый раздел (Unit) включены упражнения на закрепление лексического и грамматического материала, вопросы для дискуссии. В уроках также предлагаются темы для сочинений и устных докладов, ролевые игры, case study.

Разнообразие упражнений позволяет использовать их выборочно по каждому тексту с учетом уровня подготовки студентов.

UNIT ONE. THE SCOPE OF MARKETING Special Terms Advertising рекламная кампания Consumerism защита прав потребителя Costs издержки Distribution сбыт Goods and services товары и услуги Merchandising политика сбыта;

искусство торговли Promotion продвижение Retail розничная торговля Surplus излишки Wholesale оптовая торговля Working on the text Read and translate the text The Scope of Marketing It is common knowledge that marketing has lately developed into a separate discipline that is being taught at universities now. When did it really come into existence? This century, last century, or in the Middle Ages? – Wrong on all three counts.

The transfer of goods from one person to another was probably one of our earliest social acts. Whether through violence or barter, this transfer established that few people can satisfy all their desires alone. The inability to produce everything desired creates reliance on others for both necessities and luxuries. As societies grow more complex, so does the transfer of goods.

The basic motive for trading is that someone has something you want more than what you already have. When that someone is willing to exchange what you want for what you have, a mutually satisfactory transaction can be arranged. Generally speaking, then, trade is the exchange of surplus items for shortages of items. The reasons for having surplus items range from geographic and resource variations to division and amount of labor, skill variation, and differences in taste. One group or person may create a surplus of some product in the hope of profitably exchanging it for other products.

As society and production expanded, so did the limits of trade, the range of goods, and the distance between the traders. It became increasingly difficult for the producers to locate each other and arrange mutually satisfactory exchanges without the help of intermediaries or "middlemen."

These intermediaries, in the role of bringing together interested parties, must perform a variety of tasks which can be called marketing.

As defined by the American Marketing Association, marketing is "the performance of business activities directed toward, and incident to, the flow of goods and services from producer to consumer or user " Marketing, therefore, is made up of such physical activities as transporting, distributing, storing, and selling goods, and of the decisions which must be reached by individuals or groups who want to move goods from production to use. Of course, not all producers engage in every marketing activity. The local carpenter in Guatemala or the supermarket manager in Japan does not do product planning;

most retail stores around the world have few or no storage facilities. However, most products are repeatedly subjected to all marketing operations. In addition to an analysis of these activities, marketing involves understanding the consumer circumstances and attitudes that determine why certain people want certain products.

Marketing trends, activities, and organizations are constantly changing and developing. In the role of bringing together interested parties, the intermediary may also be involved in grading, financing, assembling, packaging, refining, or altering the form of the goods Indeed, a large portion of the working population in many countries is involved in some form of marketing. In West Germany today, for example, manufacturing and the marketing activities of retail and wholesale trade account for one-third of the national income, while twenty-five percent of the work force is engaged in full-time marketing activities.

The contribution of marketing to society is a subject of controversy among economists. Contributions such as refining, transporting, assembling, and packaging are considered productive;

speculating, storing, accepting commissions, and merchandising activities such as advertising are considered parasitic and of little value to society The general belief is that prime costs of distribution should be eliminated and supplemental cost excesses should be reduced. Supplementary costs of distribution such as packaging, storing, and selling are generally considered to be continuations of the production process, and are thus acceptable as an added value to the product. In the free enterprise system, the full range of marketing activities operates with little control. Other more controlled economies regulate and limit some of these functions.

Capitalist economies do acknowledge that marketing has its excesses, as in cases where a product is stored for an undue period of time merely to raise the price. Consumerism has arisen out of a belief that consumers have rights which are often abused. People like consumer advocate Ralph Nader have fought to have laws enacted which would protect these rights.

On the whole, however, functions can continue only if they perform a service and fulfill a need. If unnecessary marketing activities raise the cost of goods above that of the competition, the product will be priced out of the market. The corollary to this is that marketing functions will only produce a profit—the basic motive for doing business—if they provide a service worth the money. It is argued that almost all marketing activities thus contribute to the real value of a product. Whether or not this is true, the aim of this text is to explore those marketing activities and functions which do exist and which are practiced.

The following questions face those involved in marketing: How should the product be designed? How should it be packaged? What retail and/or wholesale channels should be used? Is advertising advisable? If so, how much and what kinds? What prices should be set? Will it sell, and to whom?

Although marketing activities have expanded tremendously in the past hundred years, there was little formal study of them until the past few decades. Today, there are many publications on the various aspects of marketing and colleges give courses and degrees in this field. Marketing research has developed into a highly specialized activity employing tens of thousands of people around the world. There is general agreement among marketing people that, in many cases and countries, marketing activities account for more than half the cost of the product to the consumer. In many countries, those engaged in marketing activities outnumber those engaged in manufacturing or production.

We have noted that, in general, marketing directs the flow of goods and services from producers to consumers or users. Marketing is not confined to one particular type of economy;

goods in all but the most primitive societies must be marketed. Indeed, a broader concept of marketing does not limit its application to business enterprises. Schools, hospitals, libraries, and many other services must also be marketed to be used.

Vocabulary notes Prime costs of distribution: Costs or expenses that arise because of the process of buying and selling or a conversion of the form of the product.

Supplementary costs of distribution are costs or expenses which add to the value of a product because they are a continuation of the production process.

Comprehension Tick the correct answer A, B or C for 1 –6 below 1. The transfer of goods took place because:

A. People were violent;

B. A mutually satisfactory transaction was desirable;

C. People were unable to produce everything themselves.

2. What is the role of an intermediary?

A. To make interested parties produce some product together;

B. To match Sellers and Buyers;

C. To perform a variety of tasks.

3. Marketing is:

A. Promoting goods and services from producer to user;

B. Storing and selling goods;

C. Understanding consumer circumstances.

4. In many countries the number of people involved in marketing activities is:

A. Less than those involved in production;

B. More than those involved in production;

C. The same.

5. We can apply the term “marketing”:

A. Only to business enterprises;

B. Only to non-profit organizations;

C. To both.

6. How expensive are marketing activities to the ultimate consumer:

A. They don’t cost much;

B. They double the price of the product;

C. Nothing is mentioned about it.

Vocabulary Practice Exercise Find English equivalents in the text:

Насилие, неспособность, зависимость, предметы роскоши, предметы первой необходимости, сделка, устраивать, излишки, нехватка, разделение труда, торговля, посредник, производство, сортировка, сборка, очистка, общее мнение, нарушать права потребителя, прибыль.

Exercise Fill in the blanks with one of the words from the list below. Change the form of the words where necessary.

a) promoted, b) domestic, c) markets, d) non-profit, e) products, f) competitive, g) bringing together Whether a firm is large or small,1_ a tangible or intangible product, aspires to profit or 2objectives, or sells in3 or international markets, the basic marketing process will be the same. Buyers must be found,_4_ must be conceived, priced,_5_ and distributed. Uncontrollable factors such as differing economic and_6_ conditions must be taken into account in _7_ buyers and products8_.

Grammar Revision : The Passive Voice We form the passive by using the appropriate tense of to be + a past participle.

A passive construction is used when the action itself is more important than the doer of the action or when we focus on information. We also use passive when describing a process or procedure or writing in formal style.

Exercise Open the brackets using the correct tense 1. Green-marketing strategies (to develop) by many companies now to attract customers.

2. Most goods repeatedly ( to subject) to all marketing operations.

3. The price for this product ( not to set) yet.

4. The new marketing plan (to approve) already by the top managers.

5. An intermediary may (to involve) in grading, financing, assembling or packaging.

6. Consumers’ rights often (to abuse).

7. Last century in West Germany twenty five per cent of the work force (to engage) in full-time marketing activities.

8. If unnecessary activities raise the cost of the goods above the competition level the product (to price out) of the market.

9. Their new telephone equipment (to market) more imaginatively this season.

Exercise Translate from Russian into English, making use of the vocabulary of the lesson 1. Маркетинг – это вид коммерческой деятельности, направляющий поток товаров и услуг от производителя к потребителю или пользователю.

2. Мы постоянно совершенствуем политику сбыта.

3. Права иностранных граждан в этой стране всегда ущемляли.

4. Общее мнение маркетологов заключается в том, что основные издержки сбыта должны быть устранены, а дополнительные издержки сокращены.

5. Движение в защиту прав потребителя возникло из убеждения, что потребители имеют свои права, которые часто нарушают.

6. Роль посредника заключается в том, чтобы свести вместе заинтересованные стороны – покупателя и продавца.

7. Десятки тысяч людей по всему миру заняты в маркетинговых исследованиях.

8. Эта компания готова заключить взаимовыгодную сделку.

9. Автомобиль не роскошь, а средство первой необходимости для современного делового человека.

10. Существует мнение, что оптовая торговля приносит больше прибыли, чем розничная.

11. Очистка, транспортировка, сборка, упаковка – эти виды деятельности считаются продуктивными.

12. В системе свободного предпринимательства маркетинговая деятельность слабо контролируется.

Vocabulary Test Match the words in the left column to their definitions in the right one 1. Goods A. The amount which is greater than what is used or needed 2. Barter B. The work provided for others as an occupation or business 3. Surplus C. A social movement which seeks to protect the rights and powers of consumers 4. Marketing D The sale of goods to ultimate consumers, usually in small quantities 5. Services E Different activities to make and attract a profitable demand for a product;

6.Retail F The planning and promotion of sales through attractive publicity 7. Wholesale G A fee, frequently based on a percentage of the sales price, paid to agents 8. Merchandising H The sale of goods in large amounts to jobbers or retailers 9. Speculating I Trade or exchange of goods or services without the use of money 10.Commission J Buying and selling with the expectation of profiting from anticipated price changes 11.Consumerism K Articles of trade and commerce;



products Discussion 1. How did the practice of trade begin? What was the motive for trading?

2. What are some reasons for the existence of surplus items?

3. What is the role of an intermediary or "middleman" in the process of trade?

4. List some of the major marketing operations.

5. Do all producers engage in all marketing activities? Why?

6. Why are certain marketing functions subjects of controversy among some economists?

7. Give an example of an "excess" in marketing.

8. What is consumerism?

9. Summarize the major questions that marketing people around the world ask with regard to the goods their firms or organizations produce.

10. How important are marketing activities to the cost of goods to the consumer?

11. Is use of the term "marketing" limited to business enterprises?

12. What is the difference between retail and wholesale?

13. Give examples of wholesale operations.

14. Give examples of retail stores in your community.

Vocabulary violence насилие to transfer перемещать, передавать (имущество, право) necessity предмет первой необходимости luxury предмет роскоши division of labor разделение труда range сущ диапазон, радиус действия, сфера, область, круг гл. классифицировать, распространяться, простираться intermediary посредник (син. – jobber, broker) incident to свойственный, присущий product planning планирование и разработка товара to account for объяснять ч-л, отвечать за ч-л.

free enterprise system система свободного предпринимательства;

ant. controlled economy ант. страны с жестким гос.контролем to acknowledge признавать to abuse плохо обращаться, зд. – нарушать (права) to price out вытеснять с рынка из-за (неконкурентноспособной цены) corollary вывод, заключение, результат to explore исследовать, изучать to set a price устанавливать цену to confine ограничивать, строго придерживаться UNIT TWO. PRODUCT PLANNING Special Terms Marketing research Маркетинговые исследования Competition Конкуренция New product issues Вопросы производства новых товаров Product planners Плановики производства;

разработчики товара Merger Слияние Product line Ассортимент, товарный ряд Sales pitch Направленная реклама (навязчивое предложение товара) Sales force Торговый персонал Research and development (R &D) Отдел научных исследований и разработок Input Исходная информация Style Стиль Fashion Мода Working on the text Read and translate the text Product Planning Marketing starts in a market, where individuals or organized groups who want to buy goods or services meet people who want to sell them. The buyers must have money to spend and a willingness to spend it, or a product or service they themselves are willing to trade.

The sellers must have what the buyers want. The first step in marketing is to understand these groups. The marketers must determine the number of buyers, what they want to buy, how, when, and where they want to buy it, at what price and what they expect from it. Elaborate techniques of research have been developed to supply this information. Of course, marketers have to decide which needs they want to meet. A concept for a product or service may develop long before any marketing research is done, or it may be a response to identifying need.

In part, at least, marketing determines what products and services are to be offered. Historically, marketing experts were supposed to sell any product in any way possible. The techniques of marketing research have now given marketers new ways to learn and analyze the needs and wants of consumers.

They can now play a critical role in determining what—as well as how—to market. Most large companies now produce only what their market researchers tell them will profitably sell.

All products were new at one time. Today, a product is new if it is unique—a "first"—or if it is new for the manufacturer who is entering the market to challenge the existing competition, or if it has had enough substantial design modifications to make it a new product issue. For the manufacturer, merchandising includes selecting the products to be produced;

deciding on the size, appearance, form, and packaging;

and "having the right goods at the right place at the right time at the right price."

The product planners try to determine whether there will be a demand for a given product, and if so, how much. Marketing managers then, working closely with top management, integrate these predictions with an analysis of all the areas of the business which will be affected. Does the firm possess the capacity and the funds to enter into the new product area? What are the existing marketing strengths, skills, and resources? How strong is the compe tition? The commitment of a company's energies and funds may be far reaching. Not only may substantial investments be required to develop and market new products, but contracts or even mergers with other firms may be necessary.

Professional marketing managers know that appraising new products and changing an existing product line are ongoing processes. There are many motivations for constant surveillance of the product line. Scrutiny may reveal opportunities to increase sales by offering customers more functional products, greater convenience, more prestige, greater value, or some combination of these qualities. Volkswagen of Germany, for example, introduced three entirely new models in a few years in an attempt to fill the needs of a more affluent market seeking different qualities in an automobile.

Additional products added to the line may reduce certain costs by more fully utilizing the firm's production or marketing capabilities. The airline which gets into the business of car rental for its passengers requires minimal extra cost while making fuller use of its personnel and company resources. At the same time, the existing sales pitch is easily integrated. Sometimes a new product will enhance those already in the line. Lipstick and nail polish sales rise when their manufacturers add perfume to the line, and libraries seem to lend more books when they also offer records, paintings, and films to the community.

Regardless of the motivation for new or additional products, marketing managers must consider the full range of effects the products will have on the business. Prime considerations are the similarity of the proposed product to the existing product line of the company, the similarity to the competition's products, and the resources of the firm. Marketing people determine if the products are suitable for distribution through normal or existing channels.

They ask if the regular sales methods are appropriate and if the new products can be linked to others in the line. They make whatever changes are necessary in the promotion or advertising policies, while carefully thinking out the costs of production and the final pricing.

At one extreme, a new product will be sold to current customers by the existing sales force, using the distribution channels previously developed and the same price and advertising appeals. In this case, the only major question is whether or not the product will result in additional sales or merely siphon off sales from existing company products. Frozen vegetable marketers, for example, saw their products' sales rise with a proportionate dip in sales of their canned produce. But when the major soft drink manufacturers added low-calorie diet sodas to their line, new sales were generated without detriment to the existing line.

In contrast, some new products appeal to previously untapped markets.

When Pierre Cardin introduced its first products for women, the firm's marketers were presented with new and complex problems. Distribution channels were different, a specialized sales force was required and unfamiliar promotion and pricing problems arose. It is between these two extremes that most marketers find themselves.

While pioneering is risky, some firms seek to develop and market radically new products. Trusting that, as leaders in a field, they will reap rewards for being first, some firms invest large sums on new product research and development. The failure rate for this approach is high, so not all companies have such inclinations. In a less expensive way, some firms monitor the product development of others to see if an item is demonstrably salable. Similar to this approach is the strategy wherein firms spend nothing on research and development and introduce products only into mature markets. This kind of business has low overhead and usually manufactures large volumes at low cost, relying on price as its only important sales advantage.

After deciding to produce a product, the planners carefully weigh all of the input. Settling on a final design involves many processes, taking into account the style, fashion, quality, packaging, and complexity of the product.

Marketing a new product is always a gamble, but information and planning greatly reduce the risk of failure.

Comprehension Tick the correct answer: A, B or C for 1 – 5 below:

1. The marketers must determine:

A. The number of buyers;

B. What products and services to offer;

C. The willingness to spend money.

2. The decision to produce a new product may sometimes result in:

A. Cooperation with other companies;

B. The capacity and the funds of the company;

C. An analysis of all the areas.

3. More fully utilizing the firm’s capabilities means:

A. Only enlarging the product line;

B. Only introducing a unique product;

C. Fuller use of the personnel and company resources.

4. The reason that some firms invest large sums on new product research and development is:

A. They believe they will reap rewards for being first ;

B. They want to sell a lot of cheap products;

C. They hope to find a lucrative nich.

5. To siphon off sales means:

A. To generate additional sales;

B. To reduce the sales of the major product line;

C. Neither.

Vocabulary Practice Exercise Find English equivalents in the text:

Желание, тщательно разработанные методики исследования, определять, искусство торговли, бросать вызов существующей конкуренции, финансовые и моральные затраты компании, удовлетворять потребности более богатого рынка, издержки производства, пожинать лавры первенства, тщательно взвесить исходную информацию.

Exercise Fill in the blanks with one of the words below. Change the form of the words where necessary.

a) distinguish, b) need, c) costs, d) efforts, e) selects, f) advantageous, g) motivated, h) organization, i) buying The act of_1_ starts with a customer_2. As the customer considers acting on that need, why should your product be the one he or she_3? Answering that question focuses your_4 on where you make contact with your customers. It is your choice, so you pick a spot that is inherently_5_ to your company. If your_6_ are not the lowest in the industry, don’t pick low prices. If your people are not the best and most_7_, don’t pick customer service. If you can find nothing that_8_ you from the competition, pick something and make yourself better at that “something” than anyone else.

Grammar Revision: Modal Verbs Modal verbs must, can, may, should, ought, will are auxiliary verbs that express the speakers’ judgement about the likelihood or desirability of a situation. All modals can express probability or possibility as well as obligation or willingness. For more information see § 3 of the Grammar Reference.

Exercise Explain the meaning of the modal verbs in the sentences given below:

1. The buyers must have money to spend and the willingness to spend it.

2. A concept for a product or service may develop long before any marketing research is done, or it may be a response to identifying need.

3. They could have launched their new product 3 months ago.

4. They must have sold everything.

5. There will be a delay in solving this problem.

Exercise Use the correct modal verb:

1. Sometimes customs clearance be difficult to obtain.

a) may b) must c) is 2. If we outsourced more we _ save a lot of money.

a) must b) may c) could 3. Their product be selling very well, otherwise the company would not have increased the production.

a) must b) may c) can 4. Scrutiny _ reveal opportunities to increase sales.

a) must b) may c) should 5. The company _ have launched the entirely new product.

a) mustn’t b) may not c) couldn’t Exercise Translate from Russian into English making use of the active vocabulary.

1. Группа товаров тесно связанных между собой, т.к. они функционируют сходным образом и продаются тем же группам покупателей, называется ассортиментом.

2. Чтобы получить необходимую информацию касательно потребностей покупателей, надо тщательно разработать методику исследования. 3. Вопросы производства новых товаров охватывают такие области как создание стиля, улучшение качества товара, его упаковки и т.д. 4. Бросить вызов существующей конкуренции может только уникальный товар или товар, имеющий значительные модификации в своей конструкции. 5.Иногда, чтобы разработать и продать новый товар, необходимы не только значительные инвестиции, но и слияние с другими компаниями. 6. Изменение ассортимента товара - это постоянно продолжающийся процесс. 7. Чтобы решить вопрос об окончательной модели будущего товара, плановики производства должны тщательно взвесить всю исходную информацию. 8. В попытке удовлетворить потребности более богатого рынка производители пытаются предложить своим покупателям больше удобства, больше престижа и более высокое качество. 9. Определенные затраты могут быть снижены путем более полного использования производственных возможностей. 10. Некоторые новые товары нацелены на ранее не использованные рынки.

Vocabulary Test Match the words in the left column to their definitions in the right one 1. Sales pitch A. The systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services.

2. Merger B. Those questions surrounding a decision to pro duce a new product.

3. Sales force C.A group of products that are closely related because they function in a similar manner, or fall within given price ranges.

4. Style D. The rivalry between businesses for the same customers or market E. The line of reasoning, delivered personally or 5. Fashion through advertising and promotion, intended to persuade people to buy a certain product or service 6. Input F. The people engaged in selling the products of a particular organization 7. Competition G. The legal combining of two or more business enterprises into a single entity 8. New product I. The currently accepted style or the custom of the issues moment 9. Marketing J. The usable information bearing on research understanding an issue or solving a problem 10. Product line K. The design of a product, created to appeal to more or less permanent criteria of what is acceptable Discussion 1. Describe the role of marketing in relation to those who buy or use goods or services.

2. How does marketing affect product planning? What was marketing's historic role?

3. What makes a product "new"?

4. What does merchandising mean to the manufacturer?

5. What must product planners try to determine while considering the introduction of a new product?

6. Give some reasons or motivations to alter or add to a product line, 7. Marketers must consider the effects of a new product on the company's business. List the prime considerations in this process.

8. How might the introduction of a new product affect the distribution, sales force, and promotion policies of a company?

9. Do sales of one product ever siphon off sales from the company's other line. Give an example.

10. What are some of the major problems for a firm entering a previously untried market?

11. Why do some firms develop and market radically new products?

12. Describe two approaches to introducing a new product.

13. What type of business would tend to avoid spending money on product research?

14. What are the major decisions which must be made after the decision to introduce a new product?

Role play 1. You are a marketing manager for a firm that makes home carpets.

The president asks you to develop a program to merchandise curtains and drapes. What questions should you ask? What kinds of input do you need in order to fulfill your task?

2. Give examples of goods or services from your country which describe the following:

a) A product or service redesigned frequently for reasons of fashion;

b) A product or service which enhances the value of other products or services in a company's line;

c) A product or service introduced to offer greater convenience and value to its users.

Vocabulary Willingness желание to determine определять elaborate тщательно разработанный techniques методика identify отождествлять, идентифицировать, узнавать response ответ, реакция challenge вызов integrate интегрировать, включать commitment обязательства appraise оценивать scrutiny внимательный осмотр, исследование reveal открывать, разоблачать, обнаруживать affluent богатый, изобильный capabilities возможности research and development department отдел научных исследований и разработок UNIT THREE. PRODUCT POLICY: WHAT SELLS Special Terms Sales appeal товарный вид Trend тенденция Taste вкус Quality качество Feedback обратная связь Quality control контроль качества Consumer goods потребительские товары Target market целевой рынок Positioning позиционирование, размещение товара на рынке сбыта Trading up повышение цены за счет улучшения качества Brand брэнд (название, знак или символика, отличающая товар к-л производителя или продавца) Brand name наименование, название товара Trademark торговая марка Working on the text Read and translate the text below, paying special attention to the use of the Infinitive.

Product Policy: What Sells Few products or services offered today are simple to market. From refrigerators to religions, they compete for customers in a world which is growing not only in size but in sophistication and complexity. Even if one product is clearly superior to another, this may not be evident for a variety of reasons. Marketers must know what attracts customers and keeps them, and must respond accordingly.

Whether designing new products, redesigning old ones, or improving established ones, there are certain basic objectives. One of the goals should be to benefit the consumer, as well as the producer. The product should be designed to function as efficiently as possible in relation to its price and use.

Additional uses and styles should be incorporated to supplement the basic value. Take watches, for example. Think of the variety of styles and features offered consumers.

This element of variation increases the functions of the product as well as attracting particular segments of the market. Some design elements, such as more jewels or special bands, may add nothing to the basic utility of the watch. They will, however, add to sales appeal at the point of purchase and further expand the potential market.

One of the vital factors in merchandising is the ability to cope with fashion. This element is basic to all kinds of products and services, from clothing to entertainment. Sometimes the marketer's job is almost entirely to gauge fashion trends. Fashion is a manifestation of group psychology and is, at best, difficult to predict. A fashion has its beginning when a few people are influenced by it, culminates when large numbers follow it, and declines when it is abandoned by its following. A style may or may not be a fashion at any given time: it becomes a fashion only when widely accepted.

Fashion designers, naturally, try to influence public taste. Many businesses have developed methods for scrutinizing the trends of sales in their special fields. They use these results to produce products that they hope will sell.

Quality is a judgment made by both manufacturers and customers.

Educated consumers consider more than comparative prices. While marketers are not directly involved in production activities, they do receive the feedback on product acceptance. For this reason, quality control is important to the entire merchandising process. Maintaining quality in a product adds to the cost of production and to final price. Questions of quality are thus carefully considered in the process of deciding what to buy and what to sell.

Marketing managers must, at some point, consider the breadth of their product line—how many different items to offer. By designing consumer goods in various models, sizes, and classes, a producer is able to reach for parts of the market that would be unavailable if the pattern or product were single or limited. In products like table salt, image is unimportant to the consumer, so salt comes in limited types and packages. Cars, on the other hand, are highly visible prestige items;

most automobile manufacturers offer a wide choice of models and options.

In addition to marketing "finished" goods to consumers, businesses also market industrial goods and services to other businesses. This is called industrial marketing. More dollars are actually involved in sales to industrial buyers than to consumers. In the United States, more than $1 trillion of such income is generated annually.

Regardless of the type of good, it is important to focus a marketing strategy on target customers. Target marketers believe that in most product areas the market is composed of widely dissimilar submarkets. By selecting smaller, more homogeneous segments, better oriented, more profitable marketing practices are developed.

When deciding questions of diversification and simplification, marketers must also look at the potential size of a market, at the financial position and practices of their firm, and at the resources available. All these elements influence the breadth of the product line. Determining where to position particular products is an important marketing decision.

An item such as deodorant may be introduced specifically as a men's or women's product, but later may be repositioned as a family product. In addition to positioning with respect to consumer segments, marketing managers position their products with respect to the competition. A magazine publisher may wish to position a publication so as to challenge the leader in a given market. Changes in format, emphasis, or editorial policy can appeal to the same consumer interests that buy the leader If, in this example, the result is also to appeal to a market which is more affluent and more quality conscious, the price will be raised. This process is known as trading up.

Another aspect of product policy, particularly relevant to consumer goods marketers, deals with brands. Branding is commonly used by marketers to influence consumers' perceptions and is closely related to the issue of positioning. It identifies merchandise and differentiates it from competing products. The marketer hopes for sales stability due to consumer loyalty to the brand. Ideally, this occurs when consumers are so satisfied with the merchandise that they note and remember the brand. When a manufacturer sells more than one product, there is a brand choice issue. A firm which merchandises many types of soap may choose individual brands for each of its products. The hand soap, dish detergent, clothes detergent, and scouring powder will all be labeled with different brand names.

The opposite policy is that of family branding. A paper products company may market all its products—tissues, towels, napkins, toilet paper— under one recognizable brand name.

In recent years distributors, particularly large ones, like department stores and supermarkets, have been branding products. Some carry manufacturer's brands only, while others carry a combination of manufacturer's brands and their own. These dealers don't actually produce the goods;

they arrange to sell manufacturers' products under their private brand.

This practice has grown tremendously, so that elegant department stores such as Bloomingdales do it as well as supermarkets like the A&P.

Closely related to brand identification, and sometimes considered more important, are trademarks. Because of their importance as short cuts to the customer's memory, and their legal protection to assure exclusivity, well established trademarks have a large cash value. In mergers, some well-known trademarks have been valued at millions of dollars. Through constant use on packages and in advertising, many trademarks have almost eclipsed the name of the manufacturer. Vaseline, the trademark for the petroleum jelly produced by Chese-brough-Ponds, Inc., is such an example. Many people refer to any petroleum jelly as "Vaseline."

Comprehension Tick the correct answer A,B or C for 1 – 6 below 1. The product is to be designed:

A. to meet the requirements of the producers;

B. to function efficiently;

C. to benefit both the manufacturer and the consumer.

2. Why is it the marketer’s job to gauge fashion trends?

A. because they have to cope with fashion;

B. because they must offer their customers а variety of styles;

C. because fashion is difficult to predict.

3. The feedback on product acceptance is important for:

A. consumers to consider comparative prices B. the quality control;

C. the entire merchandising process.

4. The breadth of the product line of a company depends on:

A. deciding questions on diversification and simplification;

B. the target market and the resources available;

C. the financial position only.

5. What is trading up?

A. offering high-quality, expensive goods to affluent markets;

B. positioning products with respect to the competition;

C. challenging the leader.

6. What is the purpose of branding?

A. to satisfy consumers with attractive brand names;

B. to make the company famous;

C. to identify merchandize and differentiate it from other products.

Vocabulary Practice Exercise Find English equivalents in the text:

Реагировать, пополнять, в отношении, характеристики, оценивать, отказываться от ч-л, модельеры, готовый товар, однородный, требовательный к качеству, моющее средство, отождествление, затмевать, раскрученная торговая марка.

Exercise Fill in the blanks with one of the words below. Change the form of the words where necessary.

a) to recognize, b) extension, c) tried, d) recession, e) to expand, f)core value, g) brand names, h) to build up Brand _1has become valuable in the past five years. During the2_, hard-pressed marketing directors in the food industry offered consumers more choice by adding new flavours, taking out fat or sugar, or moving from one3 and tested category to an allied one. But some companies have_4_ into new and unexpected areas. Among them are tobacco companies – which by moving into sectors like luxury goods and closing keep their5_ in the mind of the public despite stringent regulations on advertising. Dunhill was the first_6 the power of its brand name and has_7 successfully a luxury goods empire. But if you stretch a brand too far, the elastic can snap and the8 of the name becomes devalued as some companies have found to their cost.

Grammar Revision: The Infinitive The Infinitive is a non-finite form of the verb that has a double nature, nominal and verbal. Its nominal character is manifested in the syntactic functions. The verbal characteristics of the infinitive include tense, voice and aspect distinctions.

The indefinite infinitive (active and passive) expresses an action simultaneous with that of the finite verb.

The Continuous Infinitive denotes a simultaneous action in progress.

The Perfect Infinitive denotes an action prior to that of the finite verb.

For more info see § 4 of the Grammar Reference.

Exercise Explain the functions of the infinitive in the following sentences:

1. They use the results to produce product that they hope will sell.

2. Questions of quality are carefully considered in the process of deciding what to buy and what to sell.

3. They happened at the moment to be packing the goods.

4. To market a new product is not as easy as it may seem.

5. The advertising campaign to be launched is under discussion now.

6. We intended to have signed the contract.

7. Think of supplemental features which might be added to help a product appeal to a new market.

Exercise Open the brackets using the correct form of the infinitive:

1. The product (to design) is to function efficiently.

2. They were happy (to run) the company for 10 years so effectively.

3. They couldn’t (to launch) an entirely new model within such a short period of time.

4. As we understood our competitors meant (to introduce) a new style but I don’t think they succeeded.

5. If a product is (to position) against a competitor, a lot of things should (to take) into consideration.

6. (To gauge) fashion trends correctly the marketer has to do a lot of market research.

Exercise Translate from Russian into English making use of the vocabulary of the lesson:

1. Вы думаете, Ваша фирма способна правильно оценить тенденции в моде?

2. Жизненно важный фактор маркетинга – идти в ногу с модой. 3.

Модельеры часто стараются повлиять на вкус потребителя. 4.

Размещение товара на рынке может происходить либо посредством имиджа, создаваемого рекламой, либо посредством его основных характеристик, отвечающих потребностям рынка. 5. Обратная связь – это информация, получаемая от потребителей через мониторинг данного товара. 6. Стратегия маркетинга часто сфокусирована на целевом покупателе. 7. Торговая марка – это официально зарегистрированное название, символ или знак, идентифицирующий товар или услугу. 8.

Исследование и разработка новых товаров требует больших вложений.

9. Плановики производства пытаются определить будет ли спрос на новый товар и какие затраты энергии и средств потребуются компании.

10. Очень трудно быть конкурентноспособным на богатом, насыщенном рынке. 11. Если потребители данного рынка более требовательны к качеству товара, то здесь возможно повышение цены за счет улучшения качества. 12. Если производитель производит более одного вида товаров, он может присвоить индивидуальное наименование каждому из своих товаров или единое название для всей совокупности товаров. 13.

Чтобы принять решение по производству новых товаров, маркетологи должны учитывать ряд проблем, включая финансовое положение фирмы и наличие ресурсов.

Vocabulary Test Match the words in the left column to their definitions in the right one 1. Industrial goods A. Items such as food and clothing produced for the final consumer;

2. quality B. The officially registered name, symbol, figure, letter, word, or mark identifying a product or service 3. sales appeal C. The strategy of raising a product's price by improving its quality or image 4. feedback D. The population of customers to whom an organization directs its marketing strategy 5. trademark E. The manner in which a product is aimed at specific consumer segments or needs, either through its basic characteristics or through the image created by its promotion 6. trading up F. The system of maintaining a desired level of quality in each item by careful planning, use of proper equipment, continuous inspection, and corrective action where required.

7. taste G. Those qualities in a product or its presentation which interest potential customers and stimulate them to buy 8. trend H. Those goods meant for use in producing other products 9. target market I. A name, term, sign, symbol, or design, or a combination of them which identifies the goods or services of one seller or group of sellers.

10. consumer goods J. A general course or prevailing tendency;

the recognized direction of a style.

11. quality control K. The sense, shared by homogenous groups, of what is fitting, harmonious, or beautiful;

that which we deem to be tasteful or in good taste is perceived as superior.

12. brand L. Continuous data about a particular item or event for purposes of monitoring, controlling, or correcting errors;

13. positioning M. The character or nature of a particular thing;

in advertising, it usually refers to superior attributes or excellence in a product or service.

Discussion 1. What is the role of marketing in relation to the utility, or usefulness, of a product?

2. Give an example of this role;

think of supplemental features which might be added to help a product appeal to a wider market.

3. What further additions might add sales appeal to the example you just chose?

4. Name some types of goods and services which are affected by fashion trends.

5. How does a new fashion come about? How does a particular fashion rise and fall in popularity?

6. Some marketers attempt to introduce a fashion or style. What role does taste play in response to these attempts? Give some examples from your country 7. What is the relationship between manufacturers and consumers with regard to a product's quality.

8. What uses do marketers make of the feedback they receive on a product's acceptance?

9. What is the theory of target marketing?

10. What are the advantages of broadening a product line?

11. How does consumer perception of importance influence the extension of the product line?

12. Why is industrial marketing important?

13. What questions do marketers ask when considering diversification and simplification?

14. Give an example of an auto or auto rental product which has been positioned against a competitor.

15. Why might a product be repositioned after it has been introduced onto the market?

16. What is the role of branding in marketing?

17. Give a specific example of a family brand and of individual brands.

18. Give some examples of distributor's brands. Are they cheaper than manufacturer's brands of the same kind of product? Are they usually as well made? As well publicized? As tastefully packaged?

19. What is the major role of a product's trademark?

20. What are the trademarks of some products marketed in your country?

21. Vaseline is given as an example of a product whose trademark has almost eclipsed the name of its manufacturer. Give some other examples of this.

Review A. Focus on a product which you yourself wear, eat, or use regularly.

What is its basic utility? Does it have any supplemental features which persuaded you to buy it? Name them. What was it about this item which most attracted you—which aspects of its sales appeal caused you to purchase it?

B. Do you usually adhere to a particular style of clothes, jewelry, food, entertainment, recreation, or means of transportation? How do fashion trends in these areas affect you? Think of a fashion trend in one of these areas which you consciously rejected. Think of a trend you once accepted, then rejected. Why did you do both of these?

C. Think of your favorite restaurant. Does it offer a wide variety of meals or a limited menu? Why? Is it positioned against any other restaurants in the same neighborhood? Has it changed its image since it opened? Has the clientele remained the same?

D. You probably know many more brand names than you realize. List ten consumer goods which you regularly purchase (cigarettes, coffee, gasoline, candy, records). After each type of product, list as many brands as you can think of.

E. What are some of the most widely known trademarks in your country?

F. Think of the packaging of the last kitchen product you purchased. Was it functional? In what ways do you think it helped preserve and protect the product? Assuming that a lot of thought went into the package design, do you think it was adequate? How might it be improved.

Vocabulary sophistication сложность, утонченность, искушенность to benefit получать выгоду to incorporate включать, соединять to supplement дополнять, добавлять value ценность, стоимость to cope справиться, совладать;

зд. идти в ногу to gauge оценивать fashion мода homogeneous однородный diversification разнообразие challenge вызов affluent богатый, изобильный quality-conscious требовательные к качеству differentiate отличаться detergent моющее средство merger слияние to eclipse затмевать UNIT FOUR. CHANNELS OF DISTRIBUTION Special Terms Consumer outlet торговая точка Channels of distribution каналы сбыта Sales representatives торговые представители Broker брокер Sales territory торговая территория Marketing mix «маркетинг микс», совокупность затрат на маркетинг Franchise франшиза (право на торговлю под известной торговой маркой) Direct mail почтовая рассылка рекламы Discount house магазин, торгующий со скидкой Patronage dividend патронажный дивиденд (выплачивается акционерам) Overhead накладные расходы Working on the text Read and translate the text Channels of Distribution As we have noted, bringing together the buyer and seller and facilitating their exchange is the essence of marketing. From the time of the Roman mercatus (Latin, for a public place where sellers and buyers meet), the town market square has been an important center of commerce where direct transactions between producers and consumers take place. In this type of locale, each producer accepts major responsibility for advertising, finding customers, and setting a price.

With the spread of trade, more and more specialized artisans were able to live without growing their own food. By the second century, Ostia, one of Rome's ports, already had large consumer warehouses. Overseas purchases, shipments, and distribution of grain, oil, and fish were common. Long distance marketing of textiles and other wares took place along the so-called silk road from China to the Middle East at centers like Samarkand. And by the fourteenth century, Timbuktu, in the Upper Niger region, was one of the world's busiest inland markets with its trans-Saharan caravan trade. The opening of the sea routes between Europe and the East Indies stimulated marketing channels for sugar and other tropical goods. Today the trend in marketing food and other commodities is such that most of the preparation is handled in bulk by specialized agencies. A growing proportion of the food consumers purchase today is ready to eat or has only to be heated.

What this means in practical terms is that many foodstuffs, as well as other products, pass through numerous channels before being sold at countless consumer outlets. They may even be marketed all over the world.

The product itself most often determines the places for and methods of distribution. Today, the "rule-of-thumb," or normal method, is that goods go from producers to intermediaries before they get to us.

To the merchant, whether a wholesaler or a retailer, the decision as to what goods to select for resale is the key element of merchandising. To the supplier of these goods, finding the best channels of distribution is a key problem. Marketers must decide what methods are best for distributing their particular products. They may sell directly to customers, to the customers through sales agents, to jobbers, directly to retailers, or to retailers through sales representatives. If they decide to sell to the ultimate consumer through wholesalers who, in turn, sell to retailers, they may also choose intermediaries such as brokers or manufacturers' agents. The producers of industrial goods face similar decisions. Larger firms frequently use their own sales force working out of the main offices or branch offices located throughout the sales territory.

Distribution systems develop in such a way as to match the available supplies to the consumers' demands. Just as the supplies or goods themselves differ in type, quantity, and quality, so do consumer demands. Variations may occur according to season, climate, local customs, fashion, or state of the economy. Distributors must adapt the flow of their supplies to such variations.

Distribution channels are an integral part of a complex system that has evolved from cultural and social patterns in order to facilitate exchange transactions. They are governed not only by economic and social restraints, but frequently by legal and political ones as well. Thus, the interaction of the component parts of the marketing mix is considered in selecting channels.

Policies are formulated not only as to the types of intermediaries, but also as to their numbers. At one extreme is the policy of exclusive distribution, where one wholesale or retail intermediary is the sole outlet for the product or service in a given territory. Piano manufacturers typically issue franchises to one dealer in a specific region. At the other extreme, ball-point pen manufacturers use a policy of extensive distribution for the maximum number of outlets. Between these extremes are manufacturers who are variously selective in their channel choices While the entire complex of getting products to users may be complicated for some products or geographic areas, there are fundamentally just three categories of channels: wholesalers, retailers, and agents who may supplement or benefit the other two.

Industrial marketing channels feature a large proportion of raw materials, semi-finished products, and component parts. Consumer channels sell finished products;

service is usually more important to the industrial product, so sellers frequently maintain more direct channels to those users than to the household consumer. There are three types of agents employed in marketing channels:

1. Manufacturers' agents may work for several different manufacturers and sell part or all of the producers' product line within a sales territory. These agents usually have no authority to set prices, but may stock items in their own warehouses. They generally work for small firms with no sales staff, for firms carrying products unrelated to their normal line, or for firms entering a new geographic market.

2. Brokers are essentially used to sell food products. They call on grocery wholesalers for the manufacturers who are their clients and help them make inroads into broader markets.

3. Selling agents have the authority to negotiate prices and usually work without territorial limits. They represent the entire line of a manufacturer and may render financial assistance to their principals. This type of agent sells products like textiles, coal, lumber, metals, and clothing.

The first decision in determining channels of distribution is the form it should take. Should a manufacturer of skis sell through retail stores, by direct mail, or both? If retail stores are chosen, what level or type of store: specialty shops, department stores, discount houses, sporting goods stores, or a combination of these? Even within these types, questions of reliable or prestigious reputations and sufficient financial standing may enter into the decisions. Regional considerations, of course, play a role as well. Skis will sell better in regions near the slopes than in those far away. Other considerations for specific products might include taste characteristics of the product, proximity to associated types of goods and services.

These are the major types of retailing found, in one form or another, around the world:

Specialty stores usually sell a complete assortment of one line, or a limited number of closely related lines, of merchandise. Ranging from jewelry, books, and home furnishings to ice cream, baked goods, and electrical appliances, they can usually fulfill any demand for their type of product.

Department stores, because of the many lines of goods they carry, are actually consolidations of many specialty shops under one roof.

Mail order houses are large operations selling a great range of merchandise directly to consumers by mail, without a personal sales force.

They are practical where catalog printing, parcel post, and freight services are reliable and economical.

Chain stores are a group of stores under the same management. These mass distribution organizations save money for themselves and the consumer by buying and selling in large quantities. The major types of chains specialize in groceries, drugs, auto supplies, and clothing. In some product areas, they dominate the market;

in Canada, five chain supermarkets sell 40 percent of all the food in the country.

Consumers' cooperatives, owned and operated by local groups of farmers or other consumers, are also called "co-ops”. They are popular in rural areas, marketing such items as groceries, animal food, gasoline, and food preparation services. Their chief attraction to consumers is the patronage dividend, based on volume of purchases over a given period.

Direct retailing, or house-to-house selling, makes up a large part of the retail business in certain products, notably household items and makeup.

Usually the sales representative carries a small stock or shows samples, takes orders, and makes deliveries later. The overhead is small, and the consumer has the convenience of home shopping.

Vending machines sell many types of small-sized, low-cost, popular demand, standard-quality goods. Candy, cigarettes, soft drinks, and books are vended in high-traffic areas.

For the most part, wholesalers buy from manufacturers and suppliers and resell to retailers. Usually, they extend credit and make deliveries. They may carry specialized or diverse lines of products. Merchant wholesalers maintain warehouses, so the manufacturer does not need extensive storage facilities. In addition to maintaining a sales force, they are able to regroup different types of goods into acceptable lots and screen the goods presented by the manufacturers. Cash-and-carry wholesalers require customers to transport their own goods and to pay for them in cash. Another type of wholesaler is the drop shipper, who never takes possession of merchandise, but merely takes orders which the producer or supplier fills directly to the customer.

Manufacturers' branch offices also function as wholesalers. They are able to sell to other wholesalers, to retailers, or to final industrial or household consumers. Some have a limited geographic range or sell to a few large customers. They operate entirely from the factory or central office.

Comprehension Tick the correct answer: A, B or C for 1-5 below 1. What is the trend in marketing commodities today?

A. The commodities are marketed all over the world by producers themselves;

B. The goods are marketed through intermediaries;

C. The products are sold directly by manufacturers through numerous consumer outlets.

2. The policy of extensive distribution means:

A. Using a sole outlet in a given territory;

B. The entire complex of getting products to users;

C. Selling product in a maximum number of outlets.

3. A drop-shipper is:

A. An intermediary who doesn’t invest in goods;

B. A wholesaler who buys merchandise;

C. A company who ship the goods.

4. A house-to-house selling is a kind of:

A. Wholesale business;

B. Business-to-business selling;

C. Retail business.

5. To the supplier the main problem to be solved is:

A. What goods to select for resale;

B. To find the best channels of distribution;

C. To supply the market by all means.

Vocabulary Practice Exercise Find English equivalents in the text:

Cуть, склад, закупка, каналы сбыта, морские пути, обрабатывать в больших объемах, поставщик, конечный потребитель, неотъемлемая часть, ограничение, крайность, полуфабрикат, полномочие, оказывать финансовую помощь, близость, специализированные магазины, товары – почтой, сеть магазинов, прямые продажи, накладные расходы, торговый автомат.

Exercise Fill in the blanks with one of the words below. Change the form of the words where necessary.

a)price, b)advertising, c)decisions, d)promotion, e)marketing mix, f)channels of distribution, g)place, h)warehousing, i)purchase, j)wholesalers.

The_1 is often summarized as the so called four Ps: product, price, place,_2;

what to sell, to whom, where, and with what support.

People and organizations make_3 as to how, when, and to whom it is to be sold: for example on its design, price and _4_. The 5_ that customers pay for products influences the product’s image and the likelihood of _6. Promotion programs, designed to persuade the customers to buy the product, include personal selling,7, publicity, and sales promotion._8_ refers to where the product is made available to market members. It covers two areas: channels of distribution such as 9_ or retailers and physical distribution such as transportation, 10and inventory control facilities.

Grammar Revision: the Gerund The Gerund (verb + ing ) is a non-finite form of the verb that combines nominal and verbal properties.

Having nominal characteristics, the gerund can perform the function of subject, object, and predicative. The verbal characteristics of the gerund include tense and voice distinctions. It can be rendered into Russian either by noun or by verb. For more info see § 5 of the Grammar Reference.

Exercise Explain the functions of the gerund in the following sentences:

1. Each producer accepts major responsibility for advertising, finding customers, and setting a price.

2. Before being sold at countless consumer outlets many goods pass through numerous channels.

3. Finding the best channels of distribution is a key problem.

4. This job involves analyzing our sales figures.

5. The essential job of a marketer is looking for target customers.

6. The problem of selecting channels is considered in relation to the interaction of the components of the marketing mix.

Exercise Use either the Gerund or the Infinitive in the following sentences:

1. Vending machines are good for ( to sell) small inexpensive standard quality items.

2. The warehouses need (to attend to) no doubt.

3. The chain stores you are talking about are not worth (to buy).

4. They launched the product without (to do) the necessary research.

5. It’s no use (to advertise) these wares: their life cycle is coming to the end.

6. The clients threatened (to go) to a different company.

7. Brokers help manufacturers (to make) inroads into broader markets.

8. Their company had difficulty in (to find) a ship dropper.

9. They refused (to reduce) the share of semi-finished goods in their export.

Exercise Translate from Russian into English making use of the vocabulary of the lesson:

1. Существует пять основных каналов сбыта: от производителя к потребителю (от двери до двери);

через оптовика и розничного торговца или при помощи дистрибьютера;

а также путем рассылки рекламы по почте.

2. Накладные расходы - это оперативные издержки ведения бизнеса, такие как: арендная плата, налоги, амортизация, электричество и др.

3. Совокупность затрат на маркетинг включает в себя стоимость всей программы стимулирования продаж.

4. Магазины, продающие товары со скидкой пользуются большой популярностью.

5. Услугами брокеров обычно пользуются для продажи продуктов питания.

6. Франшиза – это право продавать товар или вести бизнес по установленному образцу на определенной торговой территории.

7. Ваша фирма пользуется адресной рекламой?

8. Торговой точкой называется любой рынок, где покупатель может приобрести товар.

9. Если Вы не любите ходить по магазинам, то Вы можете воспользоваться магазинами, продающими товары почтой.

10. Для оптовика или розничного торговца ключевым моментом торговли является решение, какой товар выбрать для перепродажи.

Vocabulary Test Match the words in the left column to their definitions in the right one 1) Marketing mix A. Any specific market where consumers buy goods, such as a store, a merchant, an agency, or an open-air stall 2) Franchise B. The structure of internal and external agents, dealers, and brokers, wholesale and retail, through which a commodity product or service is marketed 3) Direct mail C. Those people who represent a company and sell to retailers 4) Overhead D. An agent who buys or sells for someone else, on a commission or fee basis, without owning the goods.

5) Channels of E. A defined region in which a representative or distribution agent can sell a product or service 6) Patronage dividend F. The value of all of a firm's input into a program for stimulating sales: products, services, prices, position, advertising, sales promotion, direct selling, and all the channels of distribution.

7) Sales territory G. The permission granted by a manufacturer to a distributor or retailer to sell its products, usually confined to a specific sales territory.

8) Consumer outlet H. The operating expenses of running a business, including rent, taxes, insurance, electricity, and depreciation but excluding labor and materials.

9) Discount house I. The advertising matter mailed to large numbers of potential customers.

10) Sales J. A retail store that cuts prices for customers, who in representative turn pay cash and take care of any servicing or repair problems themselves.

11) Direct mail K. A sum of money paid to shareholders or members of a cooperative enterprise out of its earnings.

Discussion 1. Name some of the earliest large marketing centers of times past.

2. Use your imagination to briefly trace the route of a bolt of cotton print from the textile factory to your closet.

3. What are the major methods or channels of distribution open to producers.

4. What is the most important element of merchandising to the merchant? To the supplier?

5. How might variations in consumer demands affect distribution of goods?

6. Why must the marketing mix be considered in the process of selecting channels of distribution?

7. What is the difference between the policy of exclusive distribution and the policy of extensive distribution;

give examples.

8. What is the job of a manufacturer's agent? What types of businesses do these agents represent?

9. In what areas do brokers usually work? How do they do their jobs?

10. How is a selling agent different from a manufacturer's agent in terms of price negotiations? In what areas are selling agents prominent?

11. What are some considerations in determining channels of distribution?

12. Why are certain establishments known as specialty stores?

13. How does a department store resemble a specialty shop?

14. How do mail order houses operate? Where are they practical?

15. What are co-ops? What types of products do they generally merchandise?

16. Are there any advantages of house-to-house, or door-to-door selling?

17. Where are vending machines found? What do they sell?

18. What is the difference between a merchant wholesaler and a drop shipper? What are some ways in which the former helps manufacturers?

19. What are cash-and-carry wholesalers?

Writing a composition Describe the roles of the various types of agents employed in marketing channels. Refer to the chart diagramming the flow of goods to consumers, and point out differences in the channels of distribution. What use might munitions manufacturers make of agents?

Vocabulary channels of distribution каналы сбыта locale место действия to set a price устанавливать цену spread распространение;


разница между себестоимостью и продажной ценой to handle обрабатывать in bulk большими объемами, в большом количестве rule-of-thumb приближенный подсчет, кустарный способ, основное правило ultimate конечный extreme крайность extensive обширный, большой;

экстенсивный supplement дополнять to render assistance оказывать помощь proximity близость specialty специализированный mail order houses магазины, продающие товары почтой chain stores сеть однотипных магазинов vending machines торговый автомат munitions военное снаряжение ) UNIT FIVE. PRICING Special Terms Equilibrium равновесие Price control контроль за ценами Oligopoly олигополия Monopoly монополия Maximization of profits максимизация прибыли Price fixing фиксирование цены Target return запланированная прибыль Elastic эластичный Boycott бойкот Fixed cost фиксированные издержки Break-even point точка самоокупаемости Mark-up наценка Turnover товарооборот Loss leader приманка (товар, продающийся по заниженной цене, в убыток) Price war ценовая война Working on the text Read and translate the text Pricing What is given in exchange for a product or service is its price. In the process of this exchange, the seller or producer and the buyer or user agree on the price. The meeting of those who supply or sell with those who demand or buy is how market prices are determined.

In any particular region at a particular time, similar goods tend to have the same market price because the costs of producing and marketing them tend to be similar. Even before goods reach the market, buyers and sellers are generally not too far apart in their ideas of what prices should be. They are aware of the range of prices in the past and have a notion of what they will be in the future, based on producers’ costs sad consumers’ needs. This awareness produces a "normal price" with little variation. This average norm is the price toward which market prices theoretically move.

According to the law of supply and demand, formulated by the British economist Thomas R. Malthus, for each commodity some price must exist that will cause its supply and demand to be equal. In other words, the willingness of buyers to buy and of sellers to sell generally reveals some price at which the two activities intersect to create the equilibrium, or normal price.

If sellers cannot find buyers, they will cut prices. Buyers who are looking for sellers will offer to pay higher prices. Thus any variation from the equilibrium price seems to automatically correct itself by market forces which push toward the norm. At least, this is the theory. Speculation and price controls are inhibiting factors to this natural process. When goods are considered in the aggregate, with the complex issues of unemployment, the international balance of trade, and national priorities, the equilibrium will still be reached, but in an altered, controlled form.

The effect of supply on price depends on the number and size of the suppliers. When there are many suppliers of a standard product, the amount offered by any one of them has little or no effect on the market price. This condition allows for a stable, competitive market. The price is kept stable— and usually low—by the availability of the product. In an abnormal atmosphere, such as war or famine, prices may vary widely in spite of the number of producers. A less-than-perfect competitive market occurs when the number of producers is so small that the output of any one of them can cause a change in price. This competition, or oligopoly, allows producers to set prices higher than they could in a more competitive market.

The producers must still contend with some competition, so prices cannot be too high unless there is a unique feature or quality.

When a few large producers furnish the entire supply of a given product monopoly exists. If they establish a fixed price among themselves, they can be fined or, in extreme cases, closed down. Even though price fixing is illegal, it is relatively easy to do and, therefore, quite common. Where a single producer has the entire market, the price of a product can be high. If it goes too high, however, the noticeably large profit will encourage others to enter the market. Monopolists often set different prices for markets separated by distance and in those markets which are least responsive to price change. This increases profitability. However, the Robinson-Patman Act of 1936 makes any price discrimination illegal, that is selling the same goods to different buyers at different prices. There must be "like price for like quality and quantity." The only differences permitted must be based on cost differences or the need to meet competition.

In some cases, producers or distributors of certain goods want to protect the retail sales of their products against price cutting. They set a price below which their product cannot be sold, by printing the price on the package or announcing the price through advertising. Usually these measures involve well-known brands or trademarked goods. These price maintenance procedures are regulated by law in most countries.

In the strict theory of competition, price policy has no role and individuals do not put prices on their products. Prices are assumed to be determined by that automatic mechanism which adjusts prices to bring supply and demand into equilibrium. Price policy is therefore associated with imperfect competition since marketing-conscious producers will set prices at the lowest unit cost of the most efficient production method to insure the widest market.

Price, along with product, place, and promotion, are the variables that the marketing manager controls. Pricing is extremely important since it so directly affects an organization's sales and profits. Naturally, profit objectives will guide pricing decisions. The marketing manager has to decide whether to maximize profits or establish a target return. A particular target might be a certain percentage return on sales or a certain percentage return on investment or, for a small family operation, the return might be a fixed dollar amount of profit to cover overhead and living expenses. With any objective, the time factor is crucial. What is an appropriate objective for the short-term may not be for the long-term and vice-versa.

Marketers are concerned with all the factors affecting price, in order to keep their products from faring poorly in a widely variable atmosphere. Even in service areas such as passenger fares and freight rates, where detailed prices are printed and distributed, influences may cause fluctuation. The marketing manager knows that the costs of the separate elements of the marketing mix can be recovered by proper pricing. The cost of the product itself—the promotion and selling associated with it, the distribution expenses, and profit — are all directly related to price. Thus price knits together the elements of the marketing mix and pays for their respective contributions. The marketing manager must analyze and reconcile the various elements of those variables which influence price, and must then decide on an optimal price policy.

The most fundamental part of any marketing analysis is the recognition of the competitive structure of the industry. Where there are many competitors offering the same type of product, price competition will be active. When there are great numbers of similar offerings, products tend to lose their individuality. Then differentiation becomes difficult, and marketers have little discretionary power to influence prices. It is in this circumstance that marketers and merchants alike look to sales techniques. Disposing of goods at reduced prices draws attention to the specific brand, in the hope that customers will continue to buy when prices return to "normal."

Another key input variable in making pricing decisions is industry demand. If the average price of a product is reduced, will there be large, modest, or no expansion of demand? When demand increases significantly as prices are lowered, the demand is said to be highly elastic, if demand is little affected by price, it is said to be inelastic. This price sensitivity or insensitivity is influenced by various factors, making precise forecasting of the impact of price changes difficult Occasionally, consumer response occurs after a time lag, so that elasticity of demand for a product may be greater over a longer time period.

Certain products are important to consumers because they are necessities- i e. rice to the Japanese cook or gas to the taxi driver Where this is true, the industry demand will be insensitive;

as prices rise, consumers will be forced to pay more. On the other hand, there are many areas which are not so important, such as an extended vacation at the beach or a night at the opera. These less important items may be highly sensitive to price. There have been rare cases where consumers boycotted items in such numbers that they forced prices down, no matter why they had risen originally.

Other factors affect industry demand and elasticity. Some products have a derived demand, such as the need for tourist hotels only where there are sufficient numbers of tourists to warrant them. If the cost of zinc rises, industries which use it may substitute a plastic substance. Whenever substitute products are available, there is danger of losing customers if prices rise too much. The income level of the current customer is also a factor.

Private planes are affordable only by the very rich, so a price rise or dip may not affect sales as much as a similar rise or dip in the cost of a color television set. Finally, there is the perceived saturation of need for a product. If Argentinians are already eating all the beef they want, it is unlikely that the beef industry will stimulate demand further by lowering the price. On the other hand, the demand for coffee in many countries seems far from satiated, and price reductions would reasonably accelerate sales.

Cost of production is one of the several inputs into the pricing decision.

Marketers separate these costs into those which are fixed and those which are variable. The data is then used to compute various break-even points at various price assumptions. Break-even calculations provide a measure of the minimum sales required to avoid losing money. The same type of projection may be used to compute projected earnings at given sales levels. A particular level of profit may be built into the calculation as another fixed cost to be recovered.

Average-cost pricing, which consists or adding a "reasonable" mark-up to the average cost of an item, is typical in business. For the producer, costs do drop steadily as the quantity produced increases.

Therefore, the "average" cost, and subsequently the price, may vary with the quantity purchased. This is why large scale production and distribution are potentially more profitable.

Retailers mark-up their prices enough to cover their buying prices and overhead and make a profit at the same time, but not so high as to prevent sales and a turnover of merchandise. In an effort to keep goods moving and insure profits, retailers must continually decide when to cut prices, what to discount, and which items to market as loss leaders. Ultimately, to stay in business, profits must keep pace with sales.

Finally, marketing managers must take into account the goals, positions, and resources of their own firms. Large companies with large financial resources may absorb short-term losses in order to ultimately gain a secure position, or even leadership, in the market. Smaller firms may decide that the best pricing strategy is to stay close to the big competition, hoping not to suffer a price war retaliation. Whether the pricing policies involve active or passive roles, short-range tactics or long-range strategy, they must ultimately become part of the total marketing mix.

How can the best prices for a company's products be established? There is no current technique available for setting prices at an optimal level.

Mathematically, it would be possible to choose the best price for a single product if all the variable factors were known. But that wishful thought is a contradiction in terms: variable factors, by definition, vary. The cost of raw materials and labor, consumer demand, plus other factors are all dynamic, ever-changing, and unstable. Pricing is not a one time decision. Changes in the competitive environment, changes in a product's cost structure, the pressures of inflation—these and many other factors demand continuing attention to pricing.

Comprehension Tick the correct answer: A, B or C for 1-6 below 1. A stable and competitive market exists when:

A. There are many suppliers of a standard product;

B. The number of producers is small;

C. There is only one producer who supplies the entire market.

2. The equilibrium price is created by:

A. The inability of sellers to find buyers;

B. A large number of potential buyers;

C. The supply that corresponds to the demand.

3. Why is price discrimination illegal?

A. It sets like price for like quality and quantity;

B. It makes people pay different price for the same product;

C. Because it wants to protect the price from reduction.

4. When do marketers start looking for new selling techniques?

A. When the demand is elastic;

B. When products lose their individuality and differentiation becomes difficult;

C. When they dispose of the goods at reduced prices.

5. When is the demand said to be highly elastic?

A. When it fails to respond to price changes;

B. When demand decreases as prices are raised;

C. When consumers are forced to pay more.

6. Break-even point is calculated to show:

A. The minimum profit required not to lose money;

B. The minimum costs of production;

C. The maximum costs of production.

Vocabulary Practice Exercise Find English equivalents in the text:

Спрос и предложение, диапазон цен, пересекаться, рассматривать в совокупности, в крайнем случае, реагирующий на изменение цены, процедуры поддержания цен, ценовая политика, привести в равновесие, вызывать колебания, с другой стороны, насыщение потребности, средняя стоимость.

Exercise Fill in the blanks with one of the words below. Change the form of the words where necessary.


b) inelastic;

c) boycott;

d) price maintenance;

e) breaks even;


g)marketing mix;

h)loss leader;

i)cash cow;

j)sales revenues.

1. Technically, a _1_ is a profitable product or business with high market share in a low-growth market, but it is also used to mean any profitable product or business generating a steady flow of _2_. 2.

Price policy is usually associated with _3_ competition. 3. Some producers protect their goods from undercutting prices by 4_procedures. 4. All of the contributions to the 5_ can be recovered by proper pricing. 5.A 6_ is a product sold unprofitably in order to attract customers who will then, it is hoped, be persuaded to buy profitable ones. 6. A retailer who buys an item for $10 and sells it for $15 has a 33% 7_.7. A _8 is frequently given to quantity purchasers. 8.

A firm that 9_ neither earns nor loses money. 9. One of the purposes of a 10 is to force prices down.

Grammar Revision: Complex Subject Complex Subject is a construction in which the infinitive is in predicate relation to a noun in the common case or a pronoun in the nominative case. It is usually used after a limited number of words denoting sense perception, mental activity, and some others in the Passive Voice. For more info see §6 of the Grammar Reference.

Exercise Find the Complex Subject in the following sentences and translate them into Russian:

1. Prices are assumed to be determined by that automatic mechanism which adjusts prices to bring demand and supply into equilibrium.

2. The demand is said to be highly elastic.

3. They are sure to start price war.

4. Any variation from equilibrium price seems to automatically correct itself.

5. They are reported to be priced out of the market.

6. The idea of a good public image seems to be growing in importance, especially for large companies.

Exercise Rewrite the sentences using the Complex Subject:

1. They are certain, that he will enter their market.

2. It seems to us that the goods were not in proper condition.

3. We expect that their company will sign the contract tomorrow.

4. The manager believes that a new price list has already been made.

5. It turned out that some boxes were damaged.

6. They say the demand for this merchandise is inelastic.

Exercise Translate from Russian into English making use of the vocabulary of the lesson:

1. Монополия существует, когда несколько крупных производителей полностью обеспечивают рынок данным товаром.

2. Цены регулируются автоматически и приводят спрос и предложение в равновесие.

3. Во время войны или голода цены могут сильно варьироваться, несмотря на число производителей.

4. Необходимо рассматривать все условия в совокупности.

5. Если у покупателя есть желание купить какой-то товар, то он готов заплатить любую цену.

6. Точка самоокупаемости – это такая точка, на которой после уплаты всех налогов нет ни прибыли, ни убытков.

7. Маркетологам необходимо решить максимизировать ли прибыль или установить запланированный доход.

8. Если несколько производителей устанавливают между собой фиксированные цены, их могут оштрафовать или даже закрыть, т.к. это считается незаконным.

9. На этом рынке существует ощутимое насыщение потребности в данном товаре.

10. Розничные торговцы делают наценку, чтобы покрыть накладные расходы и получить прибыль.

Vocabulary test Match the words in the left column to their definitions in the right one 1. Maximization A. The state of balance due to the equal weight of of profits opposing forces or influences.

2. Target return B. The establishment of prices at a determined level by a government or by mutual consent among producers products.

3. Monopoly C. Costs such as labor and supplies, change in direct proportion to changes in output and demand.

4. Elastic D. The market condition that exists when there are few sellers. This creates a high degree of interdependence among the existing firms.

5. Break-even E. The exclusive control of a commodity or service in point a particular market, or at least a control broad enough so that price manipulation is possible.

6. Equilibrium F. The amount added to the costs of goods by a seller when figuring the selling price.

7. Boycott G. A pricing objective which seeks to make as much profit as possible;

to charge prices as high as the market will bear.

8. Price fixing: H. An article sold at cost or at a loss for the purpose of attracting trade.

9. Price control I. A pricing objective which sets a specific financial yield goal.

10. Loss leader J. Failure to respond to change 11. Fixed cost K. Responsive to change, such as an increase in demand as a result of a decrease in price 12. Cash cow L. Competitors establishing the same prices at above market prices 13. Mark-up M. To abstain from buying, using, or dealing with, as a means of coercion or protest.

14. Oligopoly N. The intensive competition, particularly among retailers in which prices are repeatedly cut to undersell competitors or force them out of business 15. Inelastic O. In business, the point at which, after expenses are paid, there is neither profit nor loss 16. Variable costs P. The rate at which goods are sold and restocked 17. Price war Q. A cost which remains relatively unaffected by changes in the quantity or volume of sales, such as rent and insurance 18. Turnover S. A profitable product or business Discussion 1. Define price. How is it determined?

2. Why do similar goods tend to have similar prices at a given time and place?

3. What is the Malthusian theory of supply and demand as it relates to price?

4. Why do variations from the equilibrium tend to automatically correct themselves? What are some possible inhibiting factors to this theory?

5. Why will a standard product in a competitive market situation usually maintain a stable price?

6. In an oligopolistic situation, how can prices be changed or controlled?

7. What is the Robinson-Patman Act?

8. What are the variables the marketing manager controls?

9. How does the marketing mix figure into pricing policy decisions?

10. Generally, how is the optimal price of a product or service set?

11. In what situation is price competition most fierce?

12. What does the consideration of industry demand involve? Why do producers look to potential elasticity of demand?

13. How does consumer perception of a product's importance affect its demand and price sensitivity?

14. How does the income level of a market reflect its probable reaction to price change in a certain product area?

15. Why are break-even calculations used by pricing policymakers? How are they used?

16. Why is large scale production and distribution potentially more profitable than small scale?

17. Explain why marketing managers must take into account the goals and resources of their own organization.

Briefly analyze and describe what you think might result from the following situations.

1. The price of a luxury yacht rises 5 percent.

2. Severe weather disrupts half the world's tea production.

3. The cost of gasoline doubles in one month.

4. An optician opens a shop next door to an eye clinic.

5. A large wealthy firm cuts its prices so low that smaller firms cannot meet them.

Vocabulary 1. Supply предложение 2. demand спрос 3. to be aware знать, осознавать, сознавать awareness осознание;

сознание 4. average средний 5. inhibiting сдерживающий inhibition сдерживание, торможение 6. in the aggregate в совокупности 7. famine голод 8. contend (with) соперничать 9. assume предполагать, принимать на себя;

притворяться assumption предположение;


принятие на себя 10. furnish снабжать 11. to fare быть, существовать, случаться 12. to reconcile примирять, улаживать 13. derived производный 14. to warrant гарантировать 15. saturation насыщение 16. satiated насыщенный, пресыщенный 17. to keep pace with идти в ногу 18. retaliation возмездие, отплата, воздаяние UNIT SIX. COMMUNICATION: PROMOTION & SELLING Special Terms Promotion продвижение Hawk торговать на улице, в разнос Advertising рекламирование Media средства массовой информации Slogan лозунг, девиз Hype навязчиво рекламировать товар Spot рекламная заставка Testimonial рекомендация, свидетельство Display витрина;

расклад товара Publicity известность;

реклама Public relations связи с общественностью Sample образец Premium премия Custom-made сделанный на заказ Detail sales презентация Bribe взятка kickback «откат» ( взятка в виде доли от предполагаемой прибыли) Cold call: попытка продать товар или услугу незаинтересованному покупателю Lead потенциальный покупатель Bid подробное предложение Bottom line итог Working on the text Read and translate the text Communication: Promotion and Selling If marketers are to persuade consumers to buy their products, there must be communication. It may take the form of the simple announcement of what is on the market and how it may be obtained, it may announce new products, it may describe the new features, uses, or improvements of familiar goods. In many cases, the communicators shape tastes, habits, and customs.

Since the goal of this communication is to stimulate sales, marketers carefully analyze the means, methods, and information to be disseminated. At which consumer groups should the communication be directed? What kinds of information do these groups seek? What are the specific objectives of the communication? How much will it cost, and how large should the overall communications budget be? How much of the communications burden should be assumed by the manufacturer and how much by the channels of distribution?

Promotion, like pricing mentioned in the previous chapter, is one of the strategic decision areas of marketing. Marketing managers must blend the methods of 1) face-to-face personal selling, 2) mass selling to large numbers of customers at the same time, and 3) short-term sales promotion, in telling the target market about the "right" product. Prehistoric traders must have "marketed" their goods by announcing publicly that they had surplus skins or food to trade. Throughout history, shouters or "criers" have walked through villages, hawking their wares. Pictorial signs, or outdoor advertising, have been used at least since the Babylonian era, five thousand years ago. The first newspaper ad appeared in Germany in 1525, announcing medicines for sale.

The first known paid ad in an American newspaper appeared in the Boston News Letter on May 8, 1704.

During the 19th century, a new type of marketing intermediary has evolved: the advertising agent. The first advertising agency was founded in Philadelphia, in the United States, in 1841. These specialists have become invaluable to manufacturers for preparing and placing ads in the media. The agencies earn most of their income from commissions;

their standard rate is 15 percent of the cost billed by the medium to the advertiser.

Whether they are on film, in pictures, in print, or spoken, all advertisements have some features in common. To be effective, they must appeal to the consumers' self-interests, arouse their curiosity, and offer them news. They frequently sell the benefits of products instead of the products themselves. An ad does not sell encyclopedias, but "knowledge", or "your child's future";

not a house in the mountains, but "the good life";

not fire insurance, but "protection for your family." A good ad attracts attention, stirs up interest, creates desire, assures belief, and impels action.

Most advertising is for branded products. The name, slogan, or trademark is repeated again and again until it becomes part of our awareness and even of our vocabulary. Some advertisers believe that the more a product is hyped, the more we will remember it and the more of it we will buy. Many firms also advertise so as to establish a good reputation with the public. The idea here is that if the public respects the institution or company, it will buy its products. Lately, oil companies have tried to improve their image by advertising the good they are doing for their community or nation.

Printed advertising may be found in magazines, newspapers, direct mail, and catalogs. Handbills or fliers are often distributed in public places or door-to-door in selected neighborhoods. Highway and street billboards and cards in public conveyances reach commuters and travelers. Specific markets can be reached by advertising in selected magazines and journals aimed at special-interest readers. Specialized products and services may be advertised in the so-called trade magazines which are editorially devoted to the interests of particular trades, professions, and businesses. When a product or service is infrequently used by consumers, a telephone directory ad can be highly effective. The success of direct mail campaigns depends largely on the quality of the mailing list. These lists are rented or purchased from companies which compile them according to occupation, age, interest, income, or neighborhood.

Television ads or commercials are the most expensive because they reach the most people. Ranging in length from a few seconds to a full minute, spots use live action, animation, or stop-motion techniques. In many countries, these short films are also shown in most houses before the main feature. Radio ads cost less than TV ads. Their other advantage is that people can be doing something else—like driving or ironing—while listening;

their disadvantage is that words have less impact than pictures. Radio commercials include straight announcements, short dramatized stories, musical ads, and testimonials.

Industrial films are used at large gatherings of prospective buyers, such as conventions or trade shows. They are especially valuable for items like heavy equipment, which cannot be easily displayed. National and international trade shows are excellent opportunities for identifying new product ideas and marketing trends. Displays at these shows are designed to attract customers by pleasing the eye. The display concept is also widely used in store windows to attract passing shoppers. Frequently, manufacturers or wholesalers will supply retailers with window-display materials. Counter, shelf, or floor displays at the point of sale encourage shoppers to buy on the spur of the moment—to buy on impulse.

Packaging is another advertising tool. A popular example is the cereal box designed around cut-outs to attract children. An important factor for items sold through self-service stores is the package designed for point-of-purchase eye appeal.

At one time, the subject of packaging was treated as an incidental side issue of product policy and design. In recent years, however, packaging has become an important factor in the marketing success of a product. In addition to advertising the product, packages have many purposes and goals. They should protect goods from spoilage or contamination. They should be shaped to facilitate dispensing, handling, storage, and transportation. Containers are often designed to make theft, adulteration, or substitution difficult, and to ensure cleanliness.

In addition to advertising, marketers always hope to get favorable publicity for their firms or products. Ideally, people will make positive comments to each other in their everyday conversations and thus publicize a service or product by word-of-mouth. Public relations, too, plays a role in bringing firms and their products to the attention of the customer. Some large firms sponsor cultural and humanitarian activities, just as small merchants sponsor local civic events. The idea of a good public image seems to be growing in importance, especially for large companies. By putting forth a positive public image, the potential for greater realization of profits exists.

The concept of sales promotion covers various activities which link advertising and publicity with selling. Useful novelties, such as calendars, match books, and key rings may be given to customers to remind them of the advertisers' names, services, and products. Other techniques include distributing samples, giving premiums tied to consumer purchases, holding contests to stimulate interest in a product, and conducting point-of-sale demonstrations to help consumers select and use a product effectively.

Demonstrations are also important in dealing with retailers. Dealer or trade promotion includes instructing retailers in effective means of selling products, providing materials for window or counter displays, and keeping merchants informed of promotional tactics and strategies.

Generally, advertising seems to be most effective for uncomplicated items such as alcoholic beverages, soaps and detergents, non-prescription medicines, cigarettes, cars, and cosmetics which are used by many different kinds of consumers. The most effective advertising reaches for particular market segments but it seldom tries to deal with the individual needs of particular consumers Personal selling is more appropriate for technically complex products—those available in a wide variety of styles and colors or custom-made.

Keeping and managing a sales force is usually the most expensive per sale form of communication. For this reason, some industrial goods manufacturers rely on catalog sales rather than on selling teams. Nevertheless, personal sales activities are necessary in many product and geographic areas.

In the Middle East, for example, major British, French, Japanese, German, and American manufacturers are competing for a share of the expanding market. Sales promotions are built on a solid foundation of strong local representation and regular tours by home office executives. This approach recognizes that business in that part of the world is highly personalized, relying more on cultivation of individual customers and government officials than on media advertising and other sales techniques. The Japanese, in particular, owe recent marketing gains to their prompt, effective, after-sales services on vehicles and industrial products. The key here is the personal touch.

Cultural patterns and customs may dictate that sales are to be accompanied by certain non-business activities, such as a cup of coffee in Turkey. Certain products demand conventions which are separate from actual sales. In the dental supplies and pharmaceutical industries, for example, manufacturers rely on missionary or detail sales representatives to stimulate their products' sales. Some firms use bribes to make sales, although the practice is unethical and usually illegal. One form of this corrupt activity is the kickback, in which a portion of the sale price is given to the one who influenced the sale.

Many salespeople earn a commission or percentage of money on the amount they sell. In this way, their own energy and ingenuity can supplement their incomes. Some salespeople use the cold call, while others rely on leads from the kinds of promotional activities described earlier. Frequently, a lead will come in the form of a request for a bid so that prices and services can be compared by the prospective consumer. Salespeople often stay closely in touch with their customers in order to service products and secure repeat sales. Often, the seller-buyer relationship becomes social and personal.

Clearly, there is no formula, technique, method, or kind of material that can guarantee sales. The bottom line measures the success or failure of promotion and selling efforts.

Comprehension Tick the correct answer: A, B or C for 1-5 below 1. When did advertising really start?

A. in 1525 in Germany;

B. in 1704 in America;

C. 5000 years ago.

2. For what goods or services an ad in a telephone directory could be effective?

A. For the goods that are frequently used;

B. For those that are rarely used;

C. for any type of goods.

3. What is the purpose of distributing samples of a product?

A. to show the quality of a product;

B. because the product itself is not available;

C. to make people buy at least a sample.

4. What must all advertisement do if they are to be effective?

A. they must arouse consumers’ curiosity;

B. they must be nice and pleasant;

C. they must be aggressive.

5. Where are films especially valuable for promotion?

A. at large gatherings;

B. in store windows;

C. for heavy equipments that is difficult to show in operation.

Vocabulary Practice Exercise Find English equivalents in the text:

Простое объявление, формировать вкус, продвижение продаж, наружная реклама, рекламное агентство, выставлять счет, вызывать любопытство, листовки, рекламный щит, общественный транспорт, постоянный пассажир, список адресов, мгновенно, несущественный, фальсификация, подмена, спонсировать местные городские мероприятия, проведение конкурсов, обеспечить повторные продажи.

Exercise Fill in the blanks with one of the words below. Change the form of the words where necessary.

a)Introducing, b)sales promotion, c)communication, d)advertising, e)publicity, f)samples, g)trade shows, h)stimulate, i)opportunities.

_1is short-term non-paid, non-personal _2about products and people in print or electronic media. Because it is presented in an editorial format, readers tend to perceive it as more believable than3.

Significant opportunities for publicity involve portraying global firms as good citizens in host countries, in_4_ new products, and in anticipating and countering criticism.

_5includes short-term, one-time incentives to distributors or customers designed to reinforce other components of the promotion and marketing mixes and _6_ sales (coupons, contests,7_, games).

8, in particular, offer marketers many more_9_ to achieve promotional goals in foreign than in domestic markets.

Grammar Revision: the Participle The Participle is a non-finite form of the verb that combines properties of a noun, an adjective and an adverb. There are two participles in the English language. Participle I (verb + ing) and Participle II (verb+ed or the 3d form of irregular verbs) for more info see §7 of the Grammar Reference.

Exercise Find the Participle in the following sentences and determine its function. Translate the sentences into Russian:

1. In the Middle East major German, French, Japanese, British and American manufacturers are competing for a share of the expanding market.

2. Consumer credit, involving charge accounts and credit cards, permits individuals to obtain goods for which they pay over a period of time.

3. Ranging in length from a few seconds to a full minute, spots use live action, animation, or stop-motion techniques.

4. Throughout history shouters have walked through villages hawking their wares.

5. They watched the commercial being shown on TV.

6. We saw the workmen scraping off billboard advertisements across the town.

Exercise Open the brackets using the correct form of the Participle:

1. The goods (to produce) by your company are in great demand.

2. The taste (to shape) now is the result of our hyping.

3. (To reach) specific markets by advertising, the firm decided to start a price war.

4. While (to make) positive comments on the product people publicize it thus (to generate) favorable publicity.

5. We’ve never heard them (to sell) anything on credit.

6. The car (to buy) by my friend is being largely advertised now.

7. (To realize) what happened, they decided to change their strategy.

Exercise Translate from Russian into English making use of the vocabulary of the lesson:

1. Многие маркетологи полагают, что навязчивая реклама помогает лучше запомнить название товара и побуждает потребителя купить его.

2. Итоговые цифры финансового отчета показывают количество прибыли и убытков.

3. Рекламные заставки, использующие мультипликацию, живое действие или стоп-кадр обычно показывают перед основным художественным фильмом.

4. Реклама, размещенная в общественном транспорте, направлена на постоянных пассажиров данного маршрута.

5. В давние времена зазывалы ходили по деревням, громко предлагая свой товар.

6. Чтобы реклама была эффективной она должна быть обращена к интересам потребителя, вызывать его любопытство.

7. Рекламные листовки часто раздают в общественных местах;

а рекламные щиты на дорогах привлекают внимание путешествующих.

8. Помимо того, что упаковка является еще одним средством рекламы, она должна предохранять товар от порчи и загрязнения.

9. Чтобы сделать кражу, фальсификацию и подмену невозможными используются контейнеры.

10. Наиболее эффективна реклама алкогольных напитков, стиральных порошков, мыла, косметики т.к. эти товары используются разнообразными потребителями.

11. Вы когда-нибудь давали взятку? – Не совсем взятку, а вознаграждение, как часть дохода от сделки, на благоприятный исход которой этот человек повлиял.

12. Потенциальный покупатель отличается от случайного тем, что он проявил заинтересованность в вашем товаре.

13. Выслав нам образцы своих товаров, они ждут, что мы непременно разместим у них свой заказ.

14. Известность приобретается путем упоминания о компании в средствах массовой информации, а также посредством общения между людьми.

Vocabulary Test Match the words in the left column to their definitions in the right one 1. Media A) Any communication for purposes of selling a product or service, including advertising, personal selling, and publicity.

2. Hype B) The end result;

those figures appearing in a company's financial statements which show the amount of profit or loss.

3. Testimonial C) To peddle or offer for sale by calling aloud or going from door to door 4. Spot D) A company employed to plan, design, place, and supervise ads or ad campaigns E) The practice of calling public attention to a 5. Publicity product or service by paid announcements, usually in newspapers and magazines or on television or radio.

6. Detail sales F) The aggregate of all mass communications:

newspapers, magazines, TV, radio, billboards, direct mail, etc.

7. Bribe G) An attempt to sell a product or service to someone who has shown no intent to buy 8. An advertising H) A brief catch-phrase or motto adopted for agency advertising a product, service, or company.

9. Public relations I) A derogatory slang word meaning the overly persistent promotion of a product.

10. Cold call J) A brief announcement, usually a radio or television advertisement or commercial during or after a program.

11. Slogan K) A written or spoken declaration from an individual certifying the value, excellence, or qualities of a person, an organization, or a product 12. Premium L) Promotional presentation of drugs or medical supplies.

13. Custom-made M) an expression of interest or intent from a prospective buyer 14. Sample N) Designed to specification for an individual customer 15. Bid O) Anything given or promised to induce someone to act dishonestly or to influence behavior.

16. Bottom line P) An offer, usually including specific details of a product or service, intended to secure a sale 17. Advertising Q) A portion of income given to a person who secretly influenced a financial transaction.

18. Kickback R) An arrangement of merchandise designed to induce sales;

usually seen at trade conventions, in store windows, and at point-of-purchase counters.

19. Hawk S) Public notice resulting from mention in the media and verbal communication among people.

20. Lead T) The promotion of a good reputation with the public 21. Promotion U) A specimen or part of a product used to show the quality, style, and nature of the whole.

22. Display V) A prize or bonus given as an inducement to purchase products or to use services.

Discussion 1. What is the history of advertising?

2. What must all advertisements do if they are to be effective?

3. Give some examples of selling the benefits of a product or service rather than the products or services themselves. How do your examples appeal to the emotions of the potential customers?

4. Why do some firms try to advertise their reputations?

5. Where fliers can be used?

6. What are trade magazines? What is the special value of advertising in them?

7. For what type of ad campaigns are mailing lists rented or purchased?

How are the lists organized?

8. In what way are TV ads more effective than printed ads?

9. Is there any advantage of radio commercials over TV ads? Name some kinds of radio ads.

10. Where are films especially valuable for promotion?

11. Describe some ways in which package designs are used as advertising tools.

12. Why do marketers try to get favorable publicity for their products?

13. List some sales promotional activities typically used by firms attempting to call attention to their products.

14. How and where are demonstrations employed as sales promotional techniques?

15. With what type of product does general advertising seem to be most effective? With what type is personal selling more important?

16. When might a sale be made on the basis of a bid? Is this method usually a competitive approach to trade?

17. What are repeat sales? How do salespeople go after them?

18. What is the importance of the bottom line?

19. What type of printed advertising is most prevalent in our country?

Which do you rely on most for commercial messages and communications?

Write a composition on one of the following topics:

A. You are working for an advertising agency which promotes a multi vitamin for children. Would you suggest TV or radio spots? Would you use novelties, samples, or contests? How would you integrate advertising into the package design?

B. How do manufacturers of highly specialized, costly items (such as elevators or diamond-cutting tools) promote their wares? What are the limitations on advertising imposed by the nature of these products?

C. Have you ever taken a course from a commercial language school?

Why did you choose that particular school? What type of promotion does it rely on for the bulk of its enrollment? Were there any personal sales activities?

D. You have been assigned the task of designing a sales promotion campaign for a newer, safer model of motorcycle. What kinds of communication might you choose? Where would you advertise? What part might salespeople play in your overall strategy?

Vocabulary To disseminate распространять;

рассеивать To blend смешивать;

сочетать To evolve эволюционировать;


развертываться To impel побуждать;

продвигать To bill выставлять счет Curiosity любопытство To arouse curiosity вызывать любопытство Handbill рекламный листок Flier листовка Billboard рекламный щит Neighborhood соседство;


окрестности Public conveyances общественный транспорт Commuter постоянный пассажир Mailing list список адресов To rent арендовать Stop-motion стоп-кадр Main feature художественный фильм Commercial рекламная передача (на радио или телевидении) Gathering собрание, сборище, скопление Convention собрание, съезд;

соглашение, конвенция Counter прилавок On the spur под влиянием момента Incidental случайный, несущественный;

свойственный, присущий Spoilage порча Contamination загрязнение;


порча Dispensing отправка;

раздача Theft кража Adulteration фальсификация;

подделка Substitution подмена, замена Civic events городские мероприятия Ingenuity изобретательность, искусство To supplement пополнять, добавлять UNIT SEVEN. FROM MAKER TO USER Special Terms Stock запас Streamline совершенствовать Assembly line линия сборки Synthetic синтетический Analytic аналитический Lot партия Inventory опись;

инвентарная опись Working capital оборотный капитал Leftover sale распродажа остатков Goodwill репутация, «гудвил», престиж, условная стоимость деловых контактов фирмы Margin маржа, прибыль Gross margin (син. gross profit) валовая прибыль Charge account кредитный счет Сredit card кредитная карта Mortgage ипотека Warranty (син. guarantee ) гарантия Working on the text Read and translate the text From Maker to User There are many stages in the marketing process. Before a can of green beans is opened, cooked, and eaten, it has passed through dozens of hands and machines. In fact these beans have actually been "marketed" twice. The farmer chose the seeds, planted them, tended the crop, harvested and transported it, and had it graded. Marketing encompassed all the activities that occurred in getting the green beans from the farmer to the cannery. However, once additional processing of a product takes place—in this case the packaging of the fresh beans into canned beans—a new product is created;

the canner is the new "maker" and the process starts all over again. Now a new set of marketing activities exists—getting the can of beans from the maker to you.

Each marketer has financial dealings with suppliers and customers.

Each marketer takes some risk with some degree of profit or loss. The number of units produced, stocked, and sold affects each dealer along the way;

over- or under-stocking costs money. Government or industry regulations, or generally accepted public standards, influence the finished product. Even the consumer has a part in the overall process by judging the quality of the product. Usually no one person participates in each of these activities or steps, but the final user is affected by all of them.

Most products undergo substantial changes before they are ready for the final user.Large assembly operations usually have advantages over small or separate ones. Savings in cost and advantages in merchandising accrue to those enterprises which streamline their activities. One of the most important streamlining activities for manufacturers is the assembly line.

Making products involves three types of processes. One, the synthetic process, mixes ingredients or assembles parts. Plastics are produced by mixing chemicals and typewriters are made by assembling ready-made parts.

Another, the analytic process, breaks down raw materials to produce an end result. Oil refineries separate the elements of crude oil to produce gasoline and petrochemicals. Peanuts go through analytic processes to become cooking oil, peanut butter, and ingredients for paint. A third process, conditioning, changes the form of the raw materials. Ore from mines becomes steel which becomes part of a telephone cable.

Since the makers of most goods are separated from the users by long distances, it is impractical to think that every item or lot purchased can be individually inspected. For this reason, there are trade association agreements and government regulations to enforce quality standards and specifications.

Grading makes the marketing system more efficient and, ideally, increases customer satisfaction by insuring standard quality. Frequently government agencies "spot check" products at random to insure that standards are met. In some cases, these agencies are empowered to force changes in production operations or to recall goods from the market when tests show that they are below acceptable standards.

Each juncture in the marketing process involves some purchasing experience. Industrial supplies are often bought according to exact specifications, leaving little discretion as to what should be bought.

Wholesalers and retailers have more latitude in buying their goods for resale.

They must stay within basic price and product lines, but have some degree of choice. The consumer has the broadest discretion in purchasing and, as a result, influences the wholesale and retail buyers. Because consumers' tastes and needs change, the intermediaries try to stay alert to trends in the public's buying habits and modify their own buying accordingly. All businesses— even service-type establishments like shoe repair shops and veterinarians— buy supplies of one sort or another. Some purchasing activities are so large or complex that they require specialists known as purchasing agents. The questions of when and how much to buy are linked to questions of storage.

Most retailers stock goods when they run low or when they feel confident enough to buy for the future. All levels of buying new items depend on the initiative of a sales force, but there is usually an automatic reordering procedure for staples or repeat items. How large an inventory to stock is a continuing problem.

Processing plants hold reserve stocks of raw materials so that their machines and workers are not idled by delays in the arrival of new supplies.

Many traders keep extensive storage facilities so that they can control their sales flow. Wholesalers and merchants try to keep an inventory large enough to satisfy normal customer needs promptly. But how much is enough? Since large orders usually involve quantity discounts and freight savings, there is an advantage in quantity buying. On the other hand this ties up working capital, and keeping large storage areas can be expensive. Effective inventory control is needed in most phases of marketing to keep goods flowing at a rate appropriate to sales. This question becomes particularly acute in product areas where the goods are perishable or short-lived due to fashion or season. Understocking may mean lost sales opportunities, while overstocking forces leftover sales, which may result in loss of profit.

When goods are stored on counters, shelves, or in the stockrooms of manufacturers, they are said to be in private storage. A public storage facility or warehouse is one which rents space for various kinds of goods.

Many small manufacturers and stores concentrate their purchases with a single supplier so as to take advantage of quantity discounts and personal service. Large-scale buyers frequently use many sources to avoid dependence on a single one. The reliability of the supplier may be more important than differences in price. Goodwill is invaluable in every phase of marketing.

The movement of products is an important problem to solve. In some cases, specialized transportation such as refrigerated vans is essential. If goods are delivered late, damaged by careless handling, or spoiled, everyone involved loses money. Except in retail sales of portable goods, the seller has the responsibility for delivery. Whether the shipping or freight costs are charged to the buyer or absorbed by the seller, it is the latter, who has the biggest interest in keeping costs down.

Industrial and commercial products are moved on every kind of vehicle. But whether the means are horse and cart, a motor freight carrier, a ship, or a supersonic jet aircraft, the kind of transportation must be appropriate to protect the goods.

Credit, or deferred payment, is common at all levels of marketing, since all of the component parts require financing. The owner of the goods or service sacrifices the opportunity to use the invested capital for other purposes. Manufacturers need capital or credit while awaiting sale and payment. Wholesalers and retailers often borrow money to build up stock for a specific season, hoping to repay it from sales. All types of credit involve some degree of risk, usually taken with an expectation of profit. Financial hardships may befall businesses that operate on too much credit;

price fluctuations may result in a lower margin than expected. All forms of credit are risky. Nonetheless, most businesses and individuals rely on one or more of the forms of credit practiced throughout the world.

Commercial credit is money used to carry on business or trade. In expectation of increased sales during an upcoming season, a store owner may borrow money to modernize and redecorate the premises. When business increases the money is repaid. This is a short-term loan, usually repaid in two to six months. Consumer credit, often involving charge accounts and credit cards, permits individuals to obtain goods for which they pay over a period of time. The special type of consumer credit used in buying buildings is a mortgage. Investment credit allows a business to borrow money for capital goods. If a machine manufacturer wants to expand by building another factory, a long-term loan may be necessary – a large sum to be repaid over several years.

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