THE BUSINESS 2.

0 upper-intermediate
spring 2020

Unit 5 Selling more

1. How do you define SMM?

Social media marketing (SMM) programs introduce products or companies to
social networking services like Twitter, Facebook, Google+, YouTube and blogs.
They encourage social media users to interact with the product or company,
developing loyalty and spreading the message to other users. The promotional
message then appears to come from a trusted, third-party source as word of mouth,
rather than from the brand or company itself. Such programs are most effective when
online marketing platforms are combined in a digital marketing mix.
Some examples of popular SMM 15 strategies are:
• Monitoring brand image by tracking key words in blogs and discussion forums.
• Inviting customers to participate in games and competitions.
• Giving users points, badges or discounts for visiting stores or scanning products
with their smartphones.
• Having employees represent the company on Twitter or in LinkedIn® and
Facebook groups.

2. What SMM practices are considered to be unfair? Why are they damaging?
(ex.2 p. 62, script p.143)
Nowadays, social networking is an incredibly powerful way of sharing
information and influencing people’s opinions. Unfortunately, some marketers are
trying to exploit social media in ways that vary from dishonest to downright illegal.
First of all, many modern digital marketers are using trickery and deception
sometimes. For example, buying friends and followers; sponsoring tweets;
guaranteeing YouTube views and etc.
Though such methods are common nowadays, they can easily ruin the trust of the
followers. The whole point about social media is that people share their opinions and
links with friends or followers, so the whole thing is based on trust and loyalty. But
when a company starts paying people to push its products or to follow a particular
Twitizen, the whole idea of social networking breaks down, because you no longer
know whether you can trust people.
As to the buying followers on social media, some social media users really pay
money to buy real people with real Twitter accounts. They’re paid a fee to follow
clients of a particular service. Though it is forbidden, there are companies that have
ways of avoiding detection in order to make money on selling followers, because the
more followers you have, the more money you get for the sponsored tweets.

3. What are the variables of the marketing mix? Explain the notions: marketing
coherency and marketing dynamics. Give examples of successful marketing
coherency and marketing dynamics? (ex. 2, 3 p.64)
The most common variables used in constructing a marketing mix are price,
promotion, product and placement (four Ps). Each of these ideas can also be seen
from a consumer's perspective. So, product converts into customer solution, price into
cost, place into convenience and promotion into communication (four Cs).
The concept of mix coherency refers to how well the components of the mix
are blended together. For example, a strategy of selling expensive luxury products in
discount stores has poor mix coherency between product and placement. Mix
dynamics refers to how the mix is adapted to a changing business environment, to
changes in the organization's resources and to changes in the product life cycle.
The examples of every concept are given below.
 Mix coherency: a video games company distributes discount coupons at football
matches (a majority of football fans are male, i.e. the same segment of the
population as most video gamers (teenagers and young men) and buyers (fathers
and grandfathers).
 Mix dynamics: accessories and spare parts for a popular portable cassette player
are now only available by mail order or on the Internet (cassette manufacturers
face a declining market where market share is being captured by mp3 players.
This kind of distribution minimizes costs and allows a product at the end of its life
cycle to improve its profit margin).

4. List marketing techniques and explain their meaning. P 64

1. Undercover marketing is marketing in which customers do not realize they
are being marketed to (for instance, in many western countries, tobacco and cigarettes
are facing a declining market. Advertising is strictly regulated, so even market leaders have
to resort to stealth tactics like getting their products in films).
2. E-marketing uses electronic media like email or SMS to promote products
(sellers can use electronic databases to select suitable prospects, then address a
personalized sales pitch by email or SMS. These techniques are often combined with
telemarketing).
3. Direct marketing lies in promoting products to target customers, for example,
through addressed mail (it is usually necessary to conduct a market study to identify
suitable targets, send out a mail-shot, then call any companies who show an interest in the
selling product).
4. Product placement aimed at putting products or references to products in
media like films or video games.
5. Viral marketing is marketing that spreads from consumer to consumer, often
online (one of the best ways to develop a niche market like skateboarding accessories is by
releasing games or video clips featuring the products onto the net. Teenagers circulate them
to their friends it’s a perfect ‘soft sell' by word of mouth or word of electronic messaging, to
 be precise).
6. Advertising is about persuading people to buy a product or service by
announcing it on TV radio or in other media (thus, during football matches,
which guarantee a big, masculine audience it’s the perfect opportunity for
advertisers to try to flood the market with razors, sports shoes and etc.).

5. What promotion techniques are used to stimulate sales? Give examples. P65
1. BOGOF: buy one get one free
This is one of the most effective ways of increasing sales volume, for all sorts
of different products – anything from soft drinks to mobile phones. The idea is to
persuade customers to purchase two items at a 50% discount. Because there’s no
reduction in the price for one item, the apparent ‘full value’ of the product is
maintained. So customers have the impression that they’re getting something ‘for
free’.
2. Loss leaders: products sold at a low price to encourage sales of another
product
Inkjet printers are a good example of loss leaders. The actual printer is sold so
cheaply that the manufacturer loses money on it – but the customer is then forced to
buy that manufacturer’s high-priced ink cartridges and special paper.
3. Tying: making sales of one product depend on the customer buying another
Tying is often seen in electronics, in video games, for example, where games
consoles will only run software licensed by the console manufacturer, so customers
are forced to buy their games and nobody else’s.
4. Cashback: money returned after the customer has paid for something
For example, some big chain stores, like Metro or Ashan, have a debit card which
allows shoppers to receive cash along with their goods when they pay by debit card.
And some credit card companies have a similar credit card, where they pay the
customer a small amount for each use of the card.
5. Bundling: selling several products together as one combined product.
This strategy is very common in the software business, where for example you can
bundle a word processor, a spreadsheet, and a database into a single office suite – and
in the fast food industry, in which multiple items are combined into a complete meal.

6. What techniques do salespeople commonly use to deal with objections? P66

 Cold calling (unexpected telephone calls or visits by someone trying to sell
something);
 meeting clients (meetings can help to break the ice between a client and a
salesperson. It is essential in order to make a good deal);
 speaking foreign languages (salespeople usually work with clients from
different countries and continents and this is why such skill is vital);
 remembering faces (clients feel themselves special when they are easily
recognized by a salesperson they used to communicate with. Such technique
also helps a salesperson to make a good impression);
  never forgetting names (it is unacceptable for a salesperson to forget a name of
the customer in the middle of a conversation, because might lead to loosing a
customer forever);
 giving discounts (customers feel special in case it is a personal discount, while
any discount is a great way to attract more potential customers to a product);,
 being patient (some customers require a lot of patience from a salesperson in
order to make a beneficial deal for the company),
 asking for orders,
 getting bonuses.

7. How will you structure your mailshot? What useful tips can you give? P70
The sructure of mailshot is:
1. Hook. This is the few words which will be seen first on your mailshot, and for a lot
of people, the only thing they read. For this reason, it’s very important that your hook
works effectively.
2. Promise
3. Benefits. After you’ve got the attention of the reader with the hook and promise
(and the creative design). You should explain your offer and value proposition
clearly.
4. Credentials
5. Action. You’ve convinced the reader of the benefits, but then you need to direct
the reader to the next by explicitly telling them.
6. PS
A good mailshot should:
• Be neither too long no too short
• Put the most important in the middle
• Be written in third persoon style
• Focus on benefits
• Always have a PS

Unit 6 New Business

1. What will motivate you to start a business? P 74

As for me, the biggest motivation is an opportunity to improve the world with
my products or goods. The freedom of being my own boss is almost equally
important to me. In my view, modern life style requires the highest level of
independence in order to make your dreams come true and provide your family
members with everything that could be needed.
It is also important to me to have fun of creating new products or services in
order to stay inspired and motivated. In my view, quality and constant implementing
of innovations in order to maintain the high level of demand are impossible if a
businessman is not keen on what he is doing and does not feel excited when taking
calculated risks. The greatest satisfaction is to be sure that you provide people with
quality goods and services.
As to the least motivating point, to me this is making money quickly so that i
can sell the business. I prefer creating something not only to gain money, but to enjoy
the thing I am doing and the world itself.

2. How to build a blockbuster brand? P 75

There are 5 simple rules to build a blockbuster brand:
1. Follow your heart
2. Start small
3. Go with your instincts
4. Partner up
5. Stay involved
(A great example of following these rules is Lev Glazman and his world
famous cosmetics brand Fresh, he created with his wife Alina Roytberg.
His mother created a passion for fragrance in him, when he was a kid. As he
worked as a dental technician in Israel, he dabbled with fragrances in hopes of
turning his true love into a business. He moved to the USA afterwards, got married
and, with a small investment from friends and family, he opened his first small store,
with his wife (fashion designer). They started with a line of soaps, creating products
they would want to use.
As their business started to grow they expanded by partnering up with LVMH
company, becoming a part of it. Now, as employees of an international powerhouse,
they remain as passionate as ever about nurturing their homegrown brand and still
creating some products themselves, staying involved).

3. What sources of funding of start-ups and small companies would you

recommend? Comment on their advantages and disadvantages. P 76
1. Self-funding
Advantage: Drawing on personal savings and credit cards can cover start-up costs
without having to wait for other people's decisions.
Disadvantage: The downside is that using credit cards can be expensive in the long
term.
2. Bank loan
Advantage: Regular repayments can make it easier to budget.
Disadvantage: On the other hand, repayment schemes can cause cash flow problems.
You may also need to provide security, such as business assets, or a guarantor.
3. Overdraft
Advantage: This can be a very flexible option for short-term or day-to-day
requirements.
Disadvantage: The disadvantage is that they usually bear a higher interest rate than
other loans.
4. Family and friends
Advantage: They might be willing to provide an interest-free loan or not require
security.
Disadvantage: funding from this source can put strain on your relationships.
5. Equity finance
Advantage: You get your funding, while the investor only realizes their investment
when the business is doing well. You also get their expertise.
Disadvantage: On the downside, it's hard to raise this finance, and your own
influence and share of the profits will be smaller.
6. Grants
Advantage: These appear to be a source of cheap financing.
Disadvantage: there is often strong competition, and you may be required to provide
matching funds. You may also need to prove a wider benefit to the community.
7. Leasing
Advantage: You can spread the cost of acquiring assets and maintenance may be
covered.
Disadvantage: But it's more expensive than if you buy outright, and you don't own
the assets until the end of the agreement.

4. What are “7 steps to heaven”? p 77

The “7 steps to heaven” are the seven steps in an application procedure,
formulated by the Angel Investors Group:
1) Self-assessment. Before putting forward your business plan for the consideration,
you must work out if angel capital is right for your company.
2) Online application. Once you have decided to submit a plan, complete our
application online.
3) Screening meeting. The review committee will invite you to make a ten-minute
pitch and answer any questions that come up.
4) Presentation to membership. It is a 30-minute presentation to our full
membership, the goal being to convince members that your proposal is worth
investigating in detail
5) Due diligence. Interested investors will check out the statements made in your
business plan, presentation and financial projections. They will go over your team’s
background and track record in detail.
6) Term sheet. On successful completion of the due diligence process, interested
angel group members will draw up a term sheet that sets out the structure of the
investment deal, including type of equity and board of directors representation.
7) Funding. When all parties are happy with the terms and language contained in the
term sheet, the deal can go through.

5. Why may business angels turn down young entrepreneurs’ proposals? What
mistakes do young entrepreneurs make in their business plans? p77
There are 4 main reasons why business angels may turn down young
entrepreneurs’ proposals:
1. Inadequate financial returns (Investors lose money on around 40% of deals and
they need to make that up on the others. Thus, a rate of 50% per annum
minimum would have been a better return on investment).
2. Lack of skills in the management team (Investors are looking for hands-on
experience).
3. Not scalable: no growth potential (sometimes, the niche market does not have
enough growth potential. For instance, if target customers are specialists in
their own field than there would’ve been a limit to what a company can sell
them).
4. Financial forecasts based on too many assumptions (Investors need concrete
information as a financial forecast).

6. What pieces of advice will you give for fielding questions? What are 5 types of
questions and how to deal with them? P 80
There are four pieces of advice for fielding questions I consider to be the most
useful:
1. Listen to the questioner (for example, maintain eye contact with the
questioner and use body language to show that you’re paying attention);
2. Don’t interrupt (that would make you look rude, and the questioner might
feel he or she hasn’t had a chance to get their point across);
3. Comment on the question before you answer it (this signals your attitude to
the audience and gives you a few seconds of thinking time);
4. Reply to the audience (although one person asked the question, it might
have been in everyone’s minds).
There are 5 types of questions and the main ways to deal with them during the
presentation:
1. Useful (they reinforce or clarify what you’re saying. Thank people for
asking them);
2. Awkward (you must avoid getting into an argument. Defuse the aggressive
ones and clarify the vague ones. Be prepared to explain, reformulate or
reassure. Be fair but firm, and don’t be aggressive or defensive yourself.
And be honest. If you can’t or don’t want to answer, say so, or offer to get
back to the questioner afterwards);
3. Irrelevant (double-check quickly that they are irrelevant, comment tactfully
and move on);
4. Unnecessary (these are the questions, which you’ve already covered. Point
this out, summarize briefly and move on);
5. No questions (if you don’t want to finish on a low, you need to start them
off. Tell your audience a question you’re often asked and then answer it!
The chances are the questions will begin to flow).

7. What are key points to remember about writing a winning company profile? P82

The three key points to remember about writing for publication online are:
 1. The F-pattern. Research shows most people read online text in an F-
pattern. At first they read complete lines, but as they move down the page, they read
two thirds, half, then only a quarter of each line. By the end of the text they're only
reading the first word or two of each line (if they're still reading). So put your key
ideas in the F if you want them to be read: use impact words and collocations in the
first two paragraphs and in the first few words of subsequent sentences.
2. An elevator pitch in writing. Your company profile is a written version of
your elevator pitch, so keep it short and snappy. Customers will only remember three
main ideas; one of the three must be why your company is different from the rest.
3. Winning hearts. Finally, a winning company profile builds trust by making
an emotional connection with the reader: highlight the human side of your business to
win their hearts as well as their minds.

Unit 7 Financial Control

1. How has the perception of accountancy changed? What is the difference

between forensic accountants and other accountancy professionals? p 89
The profession of accountant has had a special stereotype, but in recent years,
the idea of the profession has begun to change, mainly not due to high wages, but due
to the largest financial scandals of the 21st century (of Enron and WorldCom) , which
have made this profession more trending.
A forensic accountant’s work is chiefly concerned with any investigation of
financial data which will eventually be used in some form of litigation. Some of them
work for law enforcement agencies gathering evidence to support fraud and bribery
charges/ Others are experts witness who testify on either side in financial dispute case

2. To what extent do you think accountancy is a good career choice? Is technology

likely to make accountancy easier or more difficult in the future?
Nowadays, the future looks bright for accountancy, and there are enough exciting
roles in the profession to ensure that its image is not quite what it once was.
Though, in my opinion, accountancy is not a good career choice for everyone,
because it requires many different skills, like a systematic and analytical mind, which
is essential for such job. These skills are impossible to develop, as I think.
This is why I suppose that in order to become a good accountant one should be
born with the required skills and develop the highest level of responsibility.
As to the technology, I suppose it to be a way to make accountancy easier in the
future. This job requires a lot of calculation and analytical work, but technology and
computers can do it instead of people in order to make their work easier and free their
time for other task their job requires.

3. How do you keep tracks of your personal finance? P 90

Recently, I realized the need of keeping track of my income and expenses.
 Since then I have decided to really take care of my finances. I am not really fond
of using Excel or doing it online, as to the fact that my incomes and expenses are
not too big and it is easy to calculate them without using the help of a computer.
I have a notebook at home where I write down my income and expenses. I also
have a small notebook that I carry everywhere. I use this book to jot down all
expenses made without receipt.
Despite the fact that such method may be considered old-fashioned, recording
my transactions in a notebook is still a simple and reliable way of tracking the
finances. My recording process involves simply writing down the amount of the
transaction, writing a description of the transaction with a category, and then
adding or subtracting the amount from account balance.
In the end of every month, I analyze my expenses and income in order to make
sure that I managed to save some of the money I received this month and didn’t
bury myself in debts.

4. What are three main accounting documents? What information do they provide?
P 90
1) Profit and loss account. It shows managers whether a business made or lost money
over a specific period. The account provides the information about net sales, gross
profit, operating profit, earnings before taxes and net income.
2) Balance sheet. It is required to provide a snapshot of a business’s value at a
particular point in time, showing what it has and what it owes. Balance sheet
consists of the current, fixed and total assets; current and long-term liabilities; net
assets and owner’s equity.
3) Cash flow statement. It is needed to indicate inflow and outflow of money over a
specific period, in particular to make sure it does not run out. Cash flow statement
provides with the information about cash receipts, cash payments and net cash
flow.

5. How can financial documents help business owners improve their business? P
91
To start with, a balance sheet is a very useful financial document for the
owner of a small or medium business. The balance sheet is an invaluable
document, because it's a snapshot, and it can encourage a business owner to think
about whether one’s business is in the best shape. It can also discourage a business
owner from developing bad habits: for instance, it can make him or her pay the
creditors sooner rather than later, so that the balance sheet looks better and
improves the position with the bank.
Another useful financial document is cash flow forecast. For a new business,
as part of an application to a bank, it helps a business owner to get a start-up loan.
Thus, keeping an eye on cash flow is always important to prevent cash
imbalances. In case a business owner gets this wrong, it might even force him or
her to go out of business. Moreover, cash flow forecast allows to present the
 information in the form one needs.
Last, but not least is the profit and loss account. It enables the investors to see
that business is making a profit and compels a business owner to make better
decisions on what to do next.

6. How to make meetings more productive? P 94

In my opinion, the following pieces of advice can make a meeting more
productive:
1. Be clear. It is essential for the speaker to choose the right words and phrases,
depending on the type of the audience, to sound clear for other people. For
instance, if the audience consists of foreign employees there is no need to use
complicated professional words. It is also important to make sure that other people
understand the speaker.
2. Admit you don’t understand. In case of misunderstanding, it is important to ask
for a clarification in order to reach the understanding.
3. Stick to the agenda. There is no need to make a long small-talk or discuss other
topics during the meeting.
4. Summarize decisions clearly. In the end of the meeting it is essential to make a
brief summary of what was said to make sure the audience has no
misunderstanding.
5. Be direct and never rude. It is vital to stay on topic and be direct, though there is
no need to violate the professional ethics by being rude to others.

7. What information should the meeting minutes contain? P 96 (подчёркнутое

внизу – всё, что было в учебнике, остальное из интернета)
Meeting minutes keep a record of what was done or talked about at a meeting,
including any decision made or action taken. Typically, meeting minutes are recorded
by a secretary or assistant, but it can be done by any appointed individual.
Here’s a list of what needs to be included in effective meeting minutes:
 Date, time and location of the meeting.
 The purpose of the meeting.
 Names of attendees and those who were unable to attend.
 Agenda items.
 Decisions that were made.
 Actions that need to be done. Include the deadline and who it was assigned to.
 Follow up meeting.
Meeting minutes provide all colleagues with the same recollections from the
meeting and the same ideas about what was agreed. With good meeting minutes, one
makes sure everyone knows what was decided and what needs to be achieved by
what date. This is exactly why meeting minutes are so important.
For instance, meeting minutes of a particular company may include:
 · New staff (представление новых сотрудников)
· Office layout (планировка помещений)
· Expenses claims ( Утверждение издержек, претензии)
· Appraisals (оценки, экспертизы)

Unit 8 Fair Trade

1. What values does fair trade promote? Under what principles does fair trade
work? p100-102
In the name of fair trade, we are encouraged to pay more for everything from
cups of coffee and chocolate bars to cosmetics and cut flowers (For a product to be
certified as fair trade, the importer selling it in the West must pay a minimum price to
producers.)
Fair trade policies, whether government-enforced or applied through ethical
consumer schemes, distort the market. Producers in some countries may choose to
produce certain crops only because they can get an artificially high price under fair
trade schemes. This kicks away the ladder from the poorest producers who have no
choice but to stay in the market.
`Fair trade also punishes producers who are less good at quality - generally the
poorest. Setting a minimum price for products encourages retailers to buy only from
more affluent producers that can invest in higher quality. Poorer producers may be
able to supply lower quality products more cheaply, but there is no incentive to buy
these, because the retailers cannot call it fair trade. By simply pronouncing it ‘unfair’
to pay below a certain price, fair trade supporters seem to believe they can ignore
market realities, wave a magic wand and make everything better. But fair trade is like
all attempts to control prices: the poorest are cut out of the market.
` Fair trade supports a romantic view of peasant farmers toiling in the fields, day
in day out, rather than helping producers buy machinery and move into processing
and packaging of products.
Under what principles does fair trade work?
 Only certified products
 Government-enforced or applied through ethical schemes
 Fair trade makes other producers feel guilty according to middle class
consumers

2. Name the types of unethical behavior and give examples to each one. What is an
appropriate punishment? P103
 Bribery – paying money or giving presents to someone to persuade them to do
something illegal (Paying government officials to avoid red tape, music
companies paying radio DJ’s to play their music);
 Conspiracy – a secret plan by a group of people to do something illegal
 (marketing executives who were so desperate to succeed that they planted
bombs in their competitors’ factories);
 Corruption – dishonest or illegal behavior by officials or people in positions of
power (a mayor, who used his position and influence to get local contractors to
build him this enormous castle in the mountains for nothing);
 Embezzlement – abusing a position of trust to stealing money from a company
(the Korean scientist, a top researcher, had been using government research
funds to pay for his needs);
 Fraud – obtaining money by tricking people (Victor Lustig was the man who
sold the Eiffel Tower twice);
 Insider trading – using confidential information about a company to benefit
from buying or selling its shares (there is the story about the American CEO
who sold her company shares only days before the share price crashed, then
calling it ‘an unfortunate coincidence’);
 Money-laundering – hiding the origin of money obtained from illegal activities
by putting it into legal businesses (the offshore banks which process large cash
transactions for drug dealers);
 Nepotism – using power or influence to give jobs to family members instead of
people who deserve them (an HR Director who managed to hire and promote
several of her brothers and sisters to important positions in the same
multinational).

The punishment for every way of unethical behavior listed above depends on a
company policy and laws of a particular country. As far as I know, in the Russian
Federation all of the actions above might lead to the criminal liability with
variable terms of imprisonment.