» WORDS § Elzbieta Jendrych, Monika NeymannUnit 1 Unit 2 Unit 3 Unit 4 Unit Unit Unit Unit Unit Unit Unit Unit Unit Unit Unit Unit Unit Unit Unit 5 6 7 8 9 10 CONTENS ARE YOU SURE YOU KNOW ALL THIS? ....... CATEGORIES OF GOODS .............-- THE MARKET ... DISTRIBUTION TRANSPORT cis wesmey wea mete eewnemsumre INSURANCE ....... BANKING SERVICES ........--. 0-0 eee ee eeeeee ADVERTISING ... eeu ee wee newermas CUSTOMERS - OUR PRIORITY . SELLING AND BUYING ....... CONSUMER PROTECTION COMPETITION INTERNATIONAL TRADE GLOBALISATION ......-.- PRODUCTION MANAGEMENT BUSINESS COMMUNICATION .......-...---+5 EARNING A LIVING .........-- ova reueusen MORE EXERCISES ...........- beeen eeeUnit 1ARE YOU SURE YOU KNOW ALL THIS? You certainly know many business terms because you use them every day. Some of them sound and mean the same in Polish (credit, capital, cheque, budget, manager, strike) even if they are written or pronounced in a different way, Some are used in their genuine form (Public Relations, bank, panel, billboard, boom, broker) and practically everybody knows what they mean, But these terms are only a mere fragment of Business English. The purpose of this book is to tell you more about it I. To begin with, let’s check if you can use the very basic economic and business terms correctly. Try to answer the following questions: 1. If your monthly budget works well do you say it was planned economi- cally or economic? 2. Will you leam economy or economics in this school? 3, If you earn more money than you need will you save or economise it in the bank? 4. Do you say economical or economic conditions of a company? 5, Is the title of a well-known newspaper "The Economician” or The Economist”? 6. If you asked for credit from the bank and the bank agreed, do you grant it or are you granted it? 7. Do you say Poznan fairs or Poznan fair?WwW Are you sure you know all this? 9 8. *House” and “business” may mean the same as company”. Is it true? 9. Does demand in everyday English mean the same as in business? 10. Does "some products” mean the same as “some produce”? Now compare your answers with those in the key. IL Having assessed your knowledge, no matter proud or disgusted, fill the blanks in the following sentences. Use the words from the pool. Economy, economic, economical, business, company/companies - code means the same as commercial code. 2, 3 ++++++ outlook seems promising. 3. How’s cen wen a 4. . Class tickets are cheaper than . class tickets 5. He is going to pull out of ... 6. - + performance is measured by a number of ++ indexes, 7. Free market ....... . is the opposite of centrally planned 8. Our representatives often visit our... . . cece eee contacts. 9. He is the person I could do ... 10... 2... - conditions are favourable for foreign investors.10 Unit 1 WV LL. Public utility 20.2.0... .e cece are essential for the smooth functioning of cities. 12, Always put... 20. .00e00208 before pleasure. 13. A limited liability ...... sn genes BE is smaller than a public limited 00.0... 00.02005 fd: empimer~s=n aid is of great importance for developing countries. 16. He never overspends, he is very .... 17. What... 000. e eee are you in?Unit 2CATEGORIES OF GOODS Something well known and something new Vocabulary warm up Goods (commodities, merchandise, articles) are products to be sold. Nobody would produce them if there were nobody willing to buy and ready to pay for them. Goods can be divided into: High quality, Low quatty. Hiigh class High arte Low class. Choi aN a ‘goods Low grade Poor guality tan Quality ee Valuable Branded: Cheap lineW Cotevories of goods 13 As you can see there are more positive than negative terms. No wonder — every producer or seller wants to show that his goods are the best. Goods may accordingly be described as: Tradeable Marketable ‘goods that sell well Saleable Basy going Easy moving If there is poor demand for them, we say that these are slow moving goods. Vocabulary extension Goods may be bulky (like grain, coal, sand) and may be bought by wholesalers in bulk (in big quantities). The bulk is then broken into smaller portions according to the retailers orders. Goods may be seasonal (e.g. snow boots for winter), durable (e.g. furniture, TV set, bicycle), semi-durable (e. g. china, electric kettle or toaster) or non-durable (c.g. food, flowers). Some non-durable goods are called perishables since they get spoiled easily. Some are staple com- modities or essential goods (you use them every day). Still others are disposable (or throwaway) products.14 Unit 2 WwW You certainly know many other kinds of goods as they are used in general, everyday English like: home-made goods, second hand goods, half/semi finished goods, faulty (defective) goods and many others. ‘A general dividing line separates consumer goods and industrial goods (raw materials and semi-products needed for production, as well as machines and other capital equipment e. g. buildings and also spare parts and accessories). From consumers’ point of view, the most commonly used categories are as follows: BW Foodstuffs (fresh, frozen, canned) Hi Clothes and footwear BH Household goods @ Motor vehicles @ Furniture Chemicals and cosmetics @ Drugs BH Toys, etc. Every dictionary will offer you a wide range of such terms. We try to focus on those, which are most frequently used in Business English.WwW Categories of goods 15 Vocabulary exercises I. Match the definition from column B with the appropriate term from column A: Column A Column B 1. Choice goods a. are those the producer specialises in 2. Branded goods and puts his brand name on. 3. Luxury goods b. goods like jewellery, objects of art. 4. Valuable goods c. articles of poor quality but low price 5. Cheap line d. there is heavy demand for them 6. Saleable goods €. no problem with selling them 7. Easy going goods f. demand for them is rather poor 8. Slow moving goods g. not everybody can afford them h, are high grade goods I. Complete the following sentences with the words listed below: Cheap line, in bulk, quality, value, durable, perishable, bulky 1. Some people look for the price, some for the ............. of goods. 2. Customers want to get good 0.2... cece eee for their money. B. coo ms sa nemes goods should be transported in special conditions. 4. .............. goods are generally more expensive than non- durable. 5. Grain, coal ete. are .. +++ goods. 6. If you buy goods in big quantities you buy them Te canta Gi tee ene is very often heavily advertised.16 Unit 2 WwW IML. Translate the following sentences into English 1. Towary markowe sq zwykle wysokiej jakoSci. 2. Artykuly trwatego uzytku moga byé uzyteczne znacznie dtuzej niz te, Ktorych trwatosé jest krétka lub sa towarami latwo psujgcymi sie. 3. Artykuly sezonowe mozna zwykle kupié po obnizonych cenach na wyprzedazach. 4. Artykuty podstawowe sa nam potrzebne kaadego dnia. 5. Towary niskiej jakosci mozna rozpoznaé na pierwszy rzut oka (at the first glance). 6. Towary pokupne nie zawsze sa wysokiej jakosci. 7. Cena i jakosé towaru okreslaja popyt na niego. 8. Méwi sie, Ze jestesmy za biedni aby kupowaé tandete, ale w praktyce wyglada to inaczej. IV. Suggested reading I. MacKenzie, English for Business Studies, 2000, pp. 45-49Unit 3THE MARKET and its secret forces Vocabulary warm up Let’s start with a review of basic terms: B market - place — street market — market stalls i market value — as opposed to nominal value / face value @ market participants 1 market leader to market — to sell or to promote goods BH goods on the market — goods that are available to buy @ black market — illegal market Now, look at different types of markets: commodity market — a wholesale market for e.g. oil, rubber, gold, grains I securities market — Stock ExchangeWw The Market 19 @ wholesale market @ retail market W foreign exchange market (FX) ~ a market for foreign currencies Remember that marketable means easy to sell and it is synonymous with tradeable. Be careful with the word marketer; it means someone involved in marketing rant Qiow Vocabulary extension Let us start with the definition. A market is a place (or a situation) where sellers and buyers meet. This broad term includes all types of markets ~ from the Stock Exchange where securities are traded to market stalls and street traders who sell newspapers or flowers. ‘Two basic market forces affect a market: Supply = the total amount of a particular commodity which suppliers are prepared to offer for sale (at a given price and over a given period of time) Demand = the total amount of a particular commodity which consumers want to buy (at a given price and over a given period of time). The law of supply and demand is one of the basic economic principles. It states that market prices are set up by the intersection of the supply curve and the demand curve. If demand meets supply the market is well-balanced and saturated. There are no shortages of goods, customers are well supplied with the goods they wish to buy, prices are reasonable (equilibrium prices). But it is not always the case. Sometimes demand exceeds supply and then stocks are quickly depleted, goods are in short supply ~ they are scarce or missing, prices tend to rise sharply. EvenUnit 3 W downmarket, low quality goods find a ready market. In a reverse situation, ite. when supply exceeds demand, the market becomes overstocked with goods, it is congested and prices start to fall. We say that a disturbed market characterised by shortages of goods is called a seller’s market or producer’s market while excess supplies of goods are characteristic of a buyer’s market or a customer’s market. Sometimes, due to causes beyond the producer's or seller’s control such as natural disasters, lack of political stability, social unrest, wars or economic restrictions the market may become completely disrupted so that you can hardly buy essential foodstuffs like bread or milk. If you are lucky to find them, the price you have to pay is exorbitant and often prohibitive. In war time, when the purchasing power of a currency drops, barter may be the only solution — for instance you may swap a gold watch for a loaf of bread In some countries there is also an underground or black market where illegal transactions are carried out (prostitution, drug trafficking or arms trade) as well as a grey market or a twilight zone where sellers make profits without paying taxes and where counterfeiters offer poor quality merchandise under famous brand names. Illegal copying is a sort of piracy that abuses copyrights and damages the brand image.WwW The Market 2 Vocabulary exercises I. Look at the word map. Think about the words and expressions that can be used when discussing each box. ‘Well- balanced Demand and — Disturbed / disrupted supply market MARKET ‘Types of market legal market U1. Try to remember the following collocations: ‘well-balanced saturated black underground disturbed seller's buyer's market consumer producer's ready overstocked congested disrupted exorbitant sky —high prohibitive reasonable prices22 Unit 3 WwW souse goods ae a missing in short supply IIT. Find the odd word or expression in each group . foodstuffs, counterfeiters, dairy products, consumer goods twilight zone, underground market, grey market, well balanced market flood, hurricane, tornado, currency street traders, shortages, Stock Exchange brokers, buyers low quality, downmarket, illegal copies, luxury goods aw Pe equilibrium, well balanced, social unrest, stability IV. Complete the following sentences: 1. When goods are scarce, prices . 2. When demand exceeds supply, the market is . 3. Stable purchasing power of a given currency is an important determinant of . 4. Counterfeiters are people who illegally copy 5. When demand exceeds supply, goods are . V. Translate the following sentences into English 1. Dostawey powinni zaopatrywa¢ klientéw w te towary, ktére odpowiada- ja ich gustom i preferencjom. 2. Nasza oferta sprzedazy jest aktualna do kofica maja.Wy The Market 23 3. Przy niedoborach towar6w na rynku trudno jest oczekiwaé zniéek cen i specjalnych promogji. 4. Tanie towary znajduja chtonny rynek w tych krajach, w_ kt6rych przecietny dochéd na glowe jest niski. 5. Ceny surowe6w i koszty produkeji sa podstawowymi wyznacznikami podazy i maja wptyw na ceny produktéw — im wyzsze ceny surowc6w i koszty produkeji tym wyZsza cena produktow finalnych. 6. Unikanie podatkow jest typowe dla szarej strefy — producenci i sprzeda- wey .podrobek” wykorzystuja popularnosé markowych towaréw i osia~ gaja duze zyski nie ptacac podatkéw. 7. Juz najwyzszy czas debyScie pomysleli o zastapieniu handIu wymien- nego transakejami pieni¢znymi. VI. Suggested discussion topics: 1, Demand falls. What happens on the market? Think about: Producers and sellers H Customers Hl Competition Ml Reasons @ Results 2. Demand rises. What happens on the market? 3. How would you characterise the market in Poland? 4. What determinants of supply and demand do you know? VIL. Suggested reading: J. Chilver, English for Business, DPP, 1996, p. 5 D. Cotton, Market Leader Intermediate, Longman, 200, pp. 14-17Unit 4DISTRIBUTION The way goods reach us Vocabulary warm up It is said that there is a chain between the producer and the consumer. ‘The following graph presents the links of this chain. The producer | > Does not want to store his products too long in warehouses (goods may get spoiled, money is locked up) The wholesaler | —> Has ample storage space but also does not want to get overstocked. He buys goods in bulk ex works and then breaks the bulk according to the orders of retailers “The retailer | —> Has limited storage space, so he does not want to get overstocked. He must be well informed about his customers’ tastes and preferences, so that sup- ply can meet demand The customer | > He buys goods according to his individual tasteWwW Distribution 27 ‘Vocabulary extension ‘The graph presented above shows a typical distribution channel for consumer goods; in fact wholesalers often buy from several producers and retailers purchase goods supplied by various wholesalers. So, as you can see, a distribution channel is a path that goods follow to be ultimately sold to consumers. On this path there are two main categories of intermediaries (middlemen): wholesalers and retailers. Wholesalers usual- ly do not sell the products to end-users. They buy in bulk (in big quantities), store the goods in warehouses and then sell them either to other wholesalers or to retailers. Retailers sometimes buy goods ex works but routinely they are supplied by wholesalers. Then they sell the merchandise to individuals. Retailers also channel information from consumers to wholesalers who, in turn, transfer it to producers. Distribution channels used to distribute industrial goods are usually shorter. @ The indirect channel: ‘The producer + The wholesaler L ‘The industrial user @ The direct channel: The producer J The industrial user28 Unit 4 sd In the case of services (both consumer services and industrial services) the direct channel of distribution is most typical: The provider of services L The customer ‘The selection of the best channel of distribution also depends on which market segment or segments we want to reach. Sometimes multiple distribution channels are the best solution. For instance we may use wholesalers to distribute our products yet, at the same time, we may operate through our own network of retail outlets. The actual movement of goods from the manufacturer to the ultimate user covers such activities as packing and labelling, transportation, warehousing, inventory control (controlling the costs of storage, handling, insurance etc.), materials handling (moving of goods within the warehou- se or store) and order processing (preparation of an order for shipment). ‘What is important is that the customer service standards are established by producer and met by distributors, Distribution Strategies Different kinds of products require different distribution strategies. Some, like Coca-Cola or cigarettes, can be found in any type of outlet: filling stations, supermarkets, restaurants or other locations convenient to the purchaser. This distribution strategy is called intensive distribution becau- se it is aimed at intensifying distribution efforts in order to saturate the market by placing a product in a great number of outlets, Exclusive distribution strategy, on the contrary, gives exclusive rights to sell the product in a given area to a selected retailer or wholesaler. Car dealers are a good example of exclusive distribution strategy — car manufactures help a single dealer to develop and maintain the image of their products, to advertise and promote them.WwW Distribution 29 Selective distribution is yet another distribution strategy. The manufac- turer selects a number of retailers. Here again car dealers can be used as an example. A limited number of car dealers sell cars and car accessories in a given area. In this way several retail outlets sell the products manufactured by e.g. General Motors or Peugeot. Vocabulary exercises L Answer the following questions: 1. Imagine that you are a car dealer. Would you prefer to work under the exclusive distribution strategy framework or would you prefer selective distribution? 2. What business activities are connected with distribution? Why are they important? 3. What is the difference between direct and indirect channels of dist- ribution? 4. Wholesalers tend to disappear. Do you think they will be eliminated from the market in the nearest future? 5. How does the retailer cooperate with the wholesaler and the customer? 6. Do we sometimes buy directly from the wholesaler? 7. What are the advantages and disadvantages of this kind of buying? 8. Is multiple distribution the same as intensive distribution?30 Unit 4 WwW IL. Match the words in column A with their explanations in column B. 10. supply meets demand A B 1. intermediary a) the one who buys in bulk 2. wholesaler b) the one who covers costs of sales 3. retailer c) the one who pays the highest price 4. consumer d) the one in between 5. producer ¢) the one who manufactures 6. ex works f) a place to keep the goods 7. storage space g) to have too many products stored 8. overstocked h) directly from the factory 9. to break the bulk i) all the goods wanted by customers are available j) to divide the stock into smaller portions III. Comment on the following graph: Producer = Production costs + Profit margin Wholesaler > | Costs of storage + Profit margin | Retailer = Costs of sales + Profit margin | “The price paid by the customerWy Distribution 31 IV. Complete the following sentences: 1. The customers is the final element in the ....................6. from the producer to the customer. 2. If goods are ... too long they may get spoiled or become out of fashion. 3. Retailers place their ............ - with several wholesalers. 4. The customer is not always the ...........0000.4 user of the product. 5. We are supplied ....... 0. cece the goods by several retailers. V. Look at the graph and comment on different distribution strategies it presents. . (Ooo Go oe . [@_@ ® e32 Unit 4 W VI. What distribution strategy would you use for the sales of the following products and why? soda water fast food designer clothes flowers H machine tools @ cosmetics VII. Now look at the word map. Can you remember all the words used in section I and II which can be put into each of the boxes? Distribution DISTRIB Distribution strategies STRIBUTION. channels ‘The functions ‘The functions of wholesalers, of retailers ‘Transportation Packing & marking Inventory control Materials handling Order processing Tnsurance VIII. Suggested reading J. Chilver, English for Business, DPP, 1996, p. 55-65 Z. Kopestytiska, M. Neymann, New Business English, PWE, 1996, pp. 76-91 M. Neymann, T. Ruhan, Marketing in English, Poltext, 1992, pp. 123-136Unit 5TRANSPORT Omnia mea me cum porto Vocabulary warm up We all use cars, trams, buses, taxies, trains, aeroplanes. The 21th century is the age of travelling. We travel to and from work/college, so we are all commuters. We are holidaymakers spending summer or winter holidays cither in Polish resorts or in famous holiday destinations abroad. We travel to learn (e.g. to improve our knowledge of languages) or study. We go away on business (e.g. business conferences, fairs etc). ‘When we travel we need to use public or private means of transpor- tation — travelling on foot is limited to short distances only. Availability of public transport, its fares, safety, comfort, speed, as well as its flexibility (timetables, fixed routes) are the factors that should be con- sidered when choosing to use public transport. In some instances public transport is the transport of choice. Think about business trips (aeroplanes) or commuting (the underground). In others it is better to use private transport, mostly cars. Then, however, parking areas or traffic jams (congestion) may be a nuisance for drivers, particularly in big cities.Vy Transport 35 ‘Vocabulary warm up Goods are transported in different ways and the choice of means of transport depends on the distance to be covered, the cost and the kind of goods. That is why if the way to the place of destination is long and goods are bulky they are generally transported by water (both sea and inland water transport) or by rail as these types of transportation are the cheapest. Perishable goods may be also transported this way, provided that cooling chambers or other cooling facilities are available. Ships may also serve for general cargo transport, provided they suit this purpose and are well equipped in terms of sound delivery of goods. Both these means of transportation have their disadvantages, Water transport has to meet the standards listed above and it is not flexible. Rail transport, on the other hand, is expensive for small consignments and it is also not flexible (fixed routes) and sometimes needs many transhipments. This means that costs increase, time is prolonged and goods may suffer or become damaged before they reach their destination. Road transport offers speed of carriage and sound conditions of goods (due to cooling facilities, more careful handling, flexibility of routes, bility of direct delivery to consumers i.c. door-to-door service). But fairly expensive. Air transport offers highest speed and flexibility of routes beyond any competition (chartered flights), especially if it is combined with road transport, But it cannot take much cargo due to limited loading space and is the most expensive mode of transportation. That is why it is used for non-bulky perishables, valuables or in emergencies (medicines, vaccines, food relief in case of hostilities or natural disasters). Transport has special requirements for packing, marking, and accom- panying documents. The freight forwarder is responsible to collect shipping documents and present them to whom and where/when they are required,36 Unit 5 WwW The following transport terms should also be remembered (some of them have already been mentioned, but their meaning may not be quite clear to you): © carriage — the act of carrying (transporting) goods from one place to another. © carrier — a person or company responsible for carrying goods. © cargo ~ goods transported © consignment — a set of goods transported © to dispatch goods — to send them to the place of destination @ to forward goods ~ to dispatch them © forwarder = forwarding agent = shipping agent @ freight — 1. transportation of goods, 2. charges for carriage 3. cargo © freighter 1. a person or business chartering means of transportation, 2. a boat or plane carrying goods @ to ship goods — to send them to another place by all means of transportation (Mind! Not only by water!) © shipper — a person or business shipping goods* * The above definitions were adapted from J.H. Adams “Longman Business Dictionary of Business English” and Z. Kopestyaiska, M. Neymann "New Business English”Ww Transport 37 Vocabulary exercises L Since transport is closely connected with tourism, let's look at the word map below and think about the words or expressions that could describe each of the boxes. Business trips Polish tourists Foreign = abroad tourists Services for tourists in Poland Z 9 Sifety of tourists Oo, How do iocal peopte benefit from tourism? Money and the traveller Famous holiday destinations in Poland ‘Economic considerations of tourism Why do people travel? TOURISM Euroland: Credit cards and Local ‘National traveller's cheques a N | Tob Local Tourism as invisible creation | | infrastructure exports / imports I. Decide if the sentences are true or false. 1. The number of cars has increased recently. 2. Door-to-door logistic services are becoming more and more popular. 3. We do not have to adapt Polish transport to the standards and require- ments of the E.U 4. Average density of public roads in Poland is quite high but the quality of roads is far from satisfactory. 5. Pipelines are specialised means of shipping petrol.38 Unit § W IIL Give 3 examples of typical products that can be transported by: @ rail @ air @ road @ water IV. Rank the transportation modes (A—D, with A being the highest rank) according to their: © speed @ availability (number of geographic points served) @ cost and then present a short comparison of the four transportation modes. V. Match the words in column A and B A B 1. travel a) distance 2. holiday b) routes 3. congested c) transport 4, public d) by air 5, short e) roads 6. fixed 8) resort T. fleet g) on foot h) of carsWy Transport 39 VI. Complete the following sentences. 1. Loading and unloading add to the of transport 2. The size and weight of goods are important when choosing the 0.0.00. cee 3. Containerised goods are better protected from ................ and pilferage. 4. Shipping documents may . export licence or sanitary certificate 5. Air +s sesss++.....is reduced when we use unleaded petrol. 6. Over the last 10 years there has been a significant (47%) ....... i Yaa . ++. in railway services in Poland while, at the same time, Phe, lb Of oak caw gr rmE maze ones +++ ++. .transport increased. 7. There are . . - ++ motorways in Poland than e. g. in Germany. Besides their quality is low. VI. Translate the following sentences into English. 1. Sprawny (efficient) system transportowy przyezynia sie do lepszego wykorzystania zasob6w. 2. Kontenery sq duzymi metalowymi skrzyniami, kt6re sa uzywane do transportu towaréw, szczegéInie droga kolejowa i morska. Kontene- tyzacja zmniejsza ryzyko uszkodzenia czy utraty towar6w w transpor- cie.40 Unit 5 Wy 3. Autostraty omijaja ( by-pass) duze i mate miasta, a tym samym przy- czyniaja sig do szybszego i sprawniejszego transportu. 4, Duda konkurencja migdzy firmami przewozowymi powoduje obnizenic Koszt6w transportu; dotyczy to szczeg6lnie transportu samochodowego. 5, Transport morski jest ezesto wykorzystywany w handlu migdaynarodo- wym ze wzgledu na swoja niska ceng. VII. Topics for discussion: . Why do people travel? _ Foreign tourists in Poland. Things they admire, things they criticise. 1 2. 3. Polish tourists abroad. What problems can they face? 4, Public transport in Poland. 5. _ Commuters in Warsaw (or in any other big city in Poland). IX. Suggested reading: J. Chilver, English for Business, DPP, 1996, pp. 96-106 Z. Kopestyaska, M. Neymann, New Business English, PWE, 1996, pp 262-294Unit 6INSURANCE Be prudent! Vocabulary warm up We are all subject to many risks. Some of them may never happen, some are inevitable and will happen (e.g. death — we are all mortal and nobody can avoid it). That is why insurance is against risks and losses while assurance is against the inevitable. An insurance policy is a document confirming that you or your property is insured against something while assurance policy is for life. Vocabulary extension Insurance companies offer different kinds of insurance and are represen= ted by insurance agents (or insurance canvassers). They inform us about the kinds of insurance they offer and the insurance premiums. We arc generally interested in the amount of premium and amount of cover (howWwW Insurance 43 far the insurance company will cover our potential loss). The latter is also called compensation or awarded damages. Students often confuse damages with damage. Remember that damage is a loss you or your property have suffered, while damages are compensation. The adjuster who examines the actual value of the damage determines the amount of damages. Then he produces a statement of damage for the insurer thus starting the compensation procedure. There are different kinds of insurance. Burglary, fire, deposit, old age insurance or insurance against accidents, all risks, of valuables and of. course on cargo, on freight, on goods etc. Some kinds of insurance are listed below. A. For corporate customers: © Employers Liability Insurance — compulsory for employers, covers them against claims for accidents at work © Buildings and Stock Insurance © Machinery and Equipment Insurance © Bad Debts Insurance © Goods in Transit Insurance © Marine Insurance (the oldest form of insurance —> Lloyd’s of London) B. For personal customers: © Life Assurance ® Accident Insurance © Medical Cover © Home Insurance (including Fire Insurance) © Motor Vehicle (or: Car) Insurance ~ TPFT (Third Party, Fire, Theft) + minimum cover for car owners ~ COMPREHENSIVE (TPFT + indemnity if the driver is injured and/or his car damaged in an accident)44 Unit 6 Wy’ If, for example, you want to take out car insurance you must first fill in a proposal form, pay the first premium and then you will get a cover note (a temporary document of insurance). Finally you will receive a policy together with the insurance certificate. Vocabulary exercises I. Match the words and expressions from column A and B A B 1. life a) company 2. insurance b) assurance 3. proposal ©) loss 4, corporate d) policy 5. potential ©) broker 6. employers f) certificate g) form h) liability i) customer Il. Decide if the sentences are true or false 1. Some insurance companies are non-profit making organisations. 2. Compensation is paid to all those who have suffered a misfortune. 3, The lower the risk, the higher the insurance premium.— yy Insurance 45 4. Teenage drivers have to pay lower premiums for their car insurance because insurance companies want to have loyal customers in the future. 5. Every company is obliged to take out bad debts insurance. 6. Reinsurance means that only one insurer takes the risk. 7. You can make a profit out of a loss when the compensation paid to you by an insurance company is higher than the value of the damage. 8. Even if you do not act in utmost good faith compensation will be paid to you. 9. An insurance certificate is a proof that you have taken out an insurance policy. 10. Insurance provides protection against risks or losses 11, Insurance brokers sell policies offered by different insurance com- panies. 12. Premiums collected are always kept in the insurance pool. UI. Translate the following sentences into English. 1. Sytuacja finansowa naszej firmy nie jest korzystna, gdy2 ponieslismy straty zwiqzane z pozarem budynku biura — niestety, nie byt on ubezpieczony. 2. Gdyby§ wyrobit sobie ubezpieczenie na zycie w innej firmie ubez- pieczeniowej ptacitbyé mniejsze skladki Wasze odszkodowanie nie r6wnowazy moich strat. Pozwe was do sadu i wygram sprawe. 4. Ubezpieczenie domu moze obejmowaé nawet takie rzeczy jak jedzenie w zamrazarce — oczywiscie sktadka ubezpieczeniowa jest obliczona od wartosci wszystkich element6w objetych ubezpieczeniem. 5. Dzieta sztuki i cenna bizuteria powinny byé ubezpieczone odrebnie. 6. Ubezpieczenie od pozaru obejmuje nie tylko straty spowodowane poza- rem, ale takée powodzia, burza, blyskawica, trzesieniem ziemiUnit 6 WwW 7. Mam wyrauty sumienia, Powinienem byt ubezpieczyé ten samochéd. Teraz i tak juz jest na to za pdéno. IV. Discussion topics: 1. Is insurance a good business in Poland? 2, Are you insured? What insurance is it? Why have you taken it out? 3. How should premiums be calculated? V. Suggested reading: J. Chilver, English for Business, DPP, 1996, pp. 203-216 E. Jendrych, English for Banking and Finance, Olympus, 1996, pp. 88-95 Z. Kopestyfiska, M. Neymann, New Business English, PWE, 1996, pp 295-305Unit 7BANKING SERVICES Bank with us! Vocabulary warm up The bank renders several services.” But we shall focus on the terminology of selected issues you most often deal with. Let’s begin with the very basic terms: @ bank account current account BH deposit account account holder BH personal account (sole or joint) corporate or business account ‘or more detailed information see M. Neymann, T. Ruhan, Business Finance in English, Poltext, 1998, pp.14-15,Ww Banking Services 49 Vocabulary extension The Bank Account If you want to save your money you open a savings or deposit account. There are different kinds of accounts but the one you need most often is a current account or an operating account. You are the holder of an account and the bank sends you a statement of your account, a document showing all transactions which have taken place on your account over the month. You may learn that your account was credited with the amount of 6... (good news!) or debited with the amount of eee (bad news In a worst case scenario you may learn that you are in the red or you are overdrawn (an overdraft means that you spent more money than you had on your account and that you owe this amount to the bank). The balance of your account closing cach monthly statement informs you how much money you have at your disposal or what is the amount due in the case of an overdraft. You may check your account any moment you want. You may open or close it. You may draw cheques or use other forms of orders (e.g. transfer) so as to take full advantage of having a bank account. The bank Pays you interest at a fixed or variable interest rate (it depends on your contract with the bank and on the type of your account) Cashing a Cheque A cheque is an order to pay. You draw it (you are the drawer) while the person to whom money is to be paid is the payee. You put the name of the payee on the cheque and it is a named cheque, or you don’t and then it is a cheque to bearer. You may sign a cheque without the amount of money to be paid and this is a blank cheque (never do it!). The bank meets or honours the cheque on presentation (if everything is OK) or dishonours it if something is wrong or when the cheque is overdue (no longer valid) or if it is a dud cheque (a cheque with no cover). You certainly know what a traveller’s cheque is and that instead of paying cash you may pay by cheque. Traveller's cheques are extremely popular in Western Europe and50 Unit 7 Ww the USA because if your cheque is lost or stolen you receive a replacement cheque in 24 hours. You can stop a cheque if you decide you do not want to pay something or maybe someone has forged your signature. Kinds of Money ‘Apart from cash which is the most liquid kind of money, we also have other kinds of money such as credit cards, debit cards or cheques which are nearly as liquid as cash, although sometimes they may not be accepted. ‘Another popular form of plastic money is your bank card (or cash card) which you use when you want to withdraw your money from a cash dispenser (or ATM). A smart card is getting more popular because of its various uses: ID, passport, driving licence, medical record, insurance policy as well as credit card and bank card. Certificates of deposit, Treasury bonds and bills, stocks and shares are also kinds of money — of course they are less liquid than plastic mo- ney, yet they can be exchanged for cash (sooner or later). If it is your intention to save or to invest, think about the less liquid forms of money because then the interest or return may be higher than in the case of a savings account. Credits and Loans Granting credits and loans is one of the most important services offered by banks. The first step is to apply for a credit (the appropriate document is called an application for a credit). You have to prove that your solvency is unquestionable and that you may offer a collateral equal to the amount credited. Credit terms may be tight or easy and the interest rate may be high or low. If you don’t pay interest regularly you may face accrued interest and this adversely affects your ability to repay. Remember that the bank grants or allows you credit and you are granted or allowed credit. (Students often confuse these terms). The bank decides about the terms of the credit (as the creditor) and you, as the debtor, are in the ,love it or leave it” situation if you want to establish credit with the bank. Yet, you may negotiate the repayment period, repayment holiday and first orWw Banking Services 51 third party security for the credit. Remember that the term Ioan has a similar phraseology as credit. But instead of ereditor we say lender and accordingly debtor changes into borrower. Be careful because the terms lend and borrow are often confused! Finally, you may get your credit bonus if you learn all these terms by heart and prove that you can use them correctly. Good luck! Vocabulary exercises 1. Match the words from column A and B A B 1. bank a) holiday 2. debit b) due 3. amount ©) dispenser 4. repayment d) cheque 5. smart e) money 6. credit f) card 7. cash ) account 8. blank 9. withdraw52 Unit 7 Wy Il. Look at the following diagram and present it briefly. The amount of /————~] LOAN Interest rate the loan APPLICATION Rn Collateral “Applicant's credit Repayment period Repayment holiday rating Third-party The applicant The applicant's security proved his capacity to repay creditworthiness | |was not satisfactory] “The application The application is accepted is rejected IIL. Complete the following sentences: 1. If you are in the red it means that you are .. are offered higher ... 2. Deposit account... 3, Instead of .. ...your money with a bank youd better Jens it in some profitable business. 4. He .. me twenty dollars. I don’t know when I will get the money back. cheque is a cheque without cover.Wy Banking Services 53 6. If you wish to .... - your money from a cash... . . you insert the ...... + +++. into the slot, key in your PIN and the amount you want to 7. Traveller's cheques are convenient because they may be ........ when lost or stolen. interest rate is more risky for the borrower while + ++..++ interest rate may turn out to be risky for the lender. 9A. . account is used by one person; married couples or business partners usually use a vee ee account, 10. Only account holders can receive a........ cece ee. book and a -. card. IV. Look at the following options for savers/investors. Put them in order of priority starting with those which seem most attractive to you and which offer the highest interest/return. BW savings account fixed — term deposit account Mi pension fund HM trust fund e. g. Pionier or Corona @ Treasury bonds i real estate54 Unit 7 WwW WW shares and stocks gold bars B antiques Bi jewellery 1 paintings V. Discussion topics . Banking services in Poland . Your bank account. Are you satisfied with it? E ~ banking. Is it competitive to traditional banking? APN . How do banks check the applicant's credit rating? What do they consider? w . What forms of credit money are popular in Poland? 6. Saving facilities in Poland. VI. Suggested reading J. Chilver, English for Business, DPP, 1996, pp. 191-202 E. Jendrych, English for Banking and Finance, Olympus, 1996, pp. 28-40, 55-82, 96-103. IL MacKenzie, English for Business Studies, Cambridge, 2000, pp. 69-83 M. Neymann, T. Ruhan, Business Finance in English, Poltext, 1998, pp. 14-15Unit 8ADVERTISING Can you imagine your life without advertisements? Vocabulary warm up Students often confuse the meaning of the following terms: CO advertising — the activity of making a product known and desired C1 advertisement — a message about the product — written, spoken or presented by means of pictures 0 to advertise — to do advertising Phrases and words most frequently used in connection with the above: heavy advert e/heavily advertised — we say it when pressure on the customer is very strong commercials ~ advertisements on TV and radio and coloured magazines often with a novelty gift (a sample of a new product) © small ads - short advertisements in newspapers O advertising agency — business specialising in advertising O advertising campaign — different activities aimed at popularising a newly launched productWwW Advertising 37 0 advertising media ~ e.g. TV, radio , press, cinema Qa outdoor advertising — e.g. on billboards and walls G reminder/follow up advertisements ~ modified or completely changed so that the customer does not forget the product O advertising printed matter — texts and pictures addressed to poten tial customers with a characteristic printed layout and contents to attract them. Vocabulary extension Can you imagine your life without advertising? Had you been born twenty years earlier in Poland you would have spent your childhood without them. But the old times are gone. Now nobody can escape advertising. Advertising is defined as a nonpersonal sales presentation directed at many potential customers. It is directed at many customers, so it is vital for the company and the company is ready to pay quite a lot for it. Advertising expenditures vary considerably from company to company — from a budget of 1% of sales revenue in one, to 30% in another. Some companies use the comparative-parity method — they spend as much on advertising as their competitors. A very practical approach! But is it cost-effective? There are two categories of advertising: OF product advertising C1 institutional/prestige advertising (here a concept, philosophy or good- will of a company are advertised e.g. "S.C. Johnson a family company”). Certainly product advertising is much more frequent, yet prestige advertising improves the image of the company and — in the long run — may be very effective.58 Unit 8 Ww Now, let’s look at the functions of advertising: A — awareness (to make customers aware of the existence of the product) I — interest (to make them interested in the product) D — desire (to make them desire the product) A > action (to make them buy it) The first function presented above is informative; the other three are persuasive. Informative advertising is essential in B2B (business-to- business) marketing. To be effective an advertisement must be repeated (threshold effect). Potential customers should be exposed to it many times, so opportunities to see (OTS) are an important issue. But remember that excessive adver- tising may be harmful because people become irritated when they are exposed to the same advertisement too frequently. As a result advertising becomes counter-productive. What mass media can we use to advertise our product? Well, it depends on our advertising budget and on our needs. We can allocate our money in many ways choosing either outdoor (cheaper) or indoor (more expensive) advertising. Indoor advertising media: © TV > TV commercials and TV spots (high cost, it is very effective, especially in prime-time) © Radio — radio commercials and radio spots (here you can use national or local radio, you can use words and music/jingles only) © Press + display ads, small/classified ads and inserts (again you can use national or local newspapers/dailies, weeklies, magazines, profes- sional journals, tabloids and business magazines) O The Internet — very effective nowadays, especially for some categories of produets (e.g. cars, books) As we said earlier the cost of advertising is an important consideration. For small businesses, with limited advertising budgets, cheaper forms of advertising could be better:59 W Advertising C Billboards/fhoardings O Trailers OC Neon signs O Posters OC Street furniture (e.g. placing ads with backlighting on bus shelters) © Direct mail ("junk mail” or “spam” — if it is sent by e-mail) G Yellow Pages A few more terms connected with advertising are worth mentioning here: — Endorsement — a celebrity (a sports champion or film star) advertises a product — Product placement — a product (e.g. a car) is shown in a film several times. — Sponsorship - Subliminal advertising — a picture flashes onto a screen very quickly, so that people do not realise that they have been exposed to it (it is illegal) — Word-of-mouth advertising — most effective and free form of advertising; a satisfied customer advertises a product to his friends. ~— Teaser ads (they tease the customer by not giving complete information) Advertisements often cross borders and appeal to people from different countries. But be careful! Culture, religion and tradition are important issues that advertisers should consider (e.g. white is the colour of mourning in Japan). ia RRQ60 Unit 8 Ww ‘Vocabulary exercises 1. Look at the word map and think about the words and expressions that could be used when discussing the topics presented in the boxes. Product advertising] Prestige advertising Functions of — [€ ADVERTISING Cost of advertising advertising ~ Advertising ‘Effectiveness of advertising Outdoor Indoor IL Here are a few adjectives that can be used to present a good advertisement: O Bye-catching © Persuasive C7 Informative © Inspiring O Humorous Can you think of one or two more?wy Advertising 61 III. Match the words from column A and B. A B 1, teaser a) budget 2. threshold b) ads 3. advertising ©) revenue 4, product d) media 5. sales ©) effect 6. mass f) advertising 7.7V 2) advertised 8. heavily h) spot IV. Complete the following sentences: 1. If you spend on advertising as much as your competitors you use 2. B2B marketing makes use of -...........0005 advertising. advertising may be harmful because people may either ignore it or get irritated. 4. OTS means the number of ....... +++... to the advertisement, eee is the name given to display ads on bus shelters.2 Unit 8 yr V. What advertising media would you use to advertise: OC office furniture © a cooking book GF nursing services © luxury cars VI. Translate the following sentences: 1. Specjalisci od reklamy odwotuja si¢ (appeal) do naszej ambicji, prag- nienia sukcesu lub tatwego zycia. 2. Agencje reklamowe, na przykiad Saachi and Saachi, zatrudniaja najlep- szych ekspertéw od reklamy. 3. Reklama musi byé kontrolowana, giéwnie po to, by chronié konsumen- tow i nie podawaé im blednych informacji. 4. Prawna kontrola reklamy umoZliwia eliminowanie reklam, ktére nie méwia prawdy © produktach lub ustugach. 5. Katalogi i ulotki moga byé wysytane bezposrednio do klient6w, jednakze wielu Klientéw wyrzuca je do kosza bez czytania. 6. Breloczki (key rings), piéra i kalendarze oraz inne gadzety moga byé forma reklamy jesli nazwa firmy jest widoczna na nich. VII. Decide which word or expression is odd. 1. Advertising agency, designing an advertisement, legal control, adver- lising media, buying media space Beer mats, calendars, wrapping paper, commercial radio Sound, newspaper ads, colour, movement Billboards, neon signs, display ads, posters ve won Advertiser, advert, advertisement, adW Advertising 63 6. Effective, saturated, eye-catching, teasing +. Slogan, threshold effect, opportunities to see, exposure VUI. Topics for discussion 1. Advantages and disadvantages of advertising. 2. Your favourite advertisement. 3. Advertisements — an important element in business communication. 4, Is it better to use the services of advertising agencies? IX. Suggested reading J. Chilver, English for Business, DPP, 1996, pp. 84-95 D. Cotton, Market Leader Intermediate, Longman, 2000, pp. 30-37 E. Jendrych, English for Banking & Finance, Olympus, 1996, pp. 182-183 Z. Kopestyfiska, M. Neymann, New Business English, PWE, 1996, pp. 92.99 I. MacKenzie, English for Business Studies, Cambridge, 2000, pp. 56-63 M. Neymann, T. Ruhan, Marketing in English, Poltext, 1998, pp. 57-65Unit 9CUSTOMERS - OUR PRIORITY Or maybe profits? ‘Vocabulary warm up All the efforts of the producer, wholesaler and retailer would be completely futile if — at the end of the chain of distribution — there were no customers. They are the target and final goal and all the preceding links focus on attracting them. ‘There are different kinds of customers: © Those who buy regularly in the same shop and that is why they are called regular customers. © Those who do mostly window shopping, occasionally buying something but they don’t do it regularly — they are called casual or chance customers. All of them are potential or prospective customers for the future, some are cash customers (they pay cash), some take advantage of credit facilities (credit cards, hire purchase or instalment system). There is also a special group of brand minded customers loyal to a selected brand, willing to buy first of all their beloved branded goods. There are also ultimate customers (¢.g. parents who pay for the goods theirWwW Customers ~ Our Priority 67 children want) and target customers for whom a special kind of goods is produced (e.g. babies and children are target customers for Johnson and Johnson) How can we make our product saleable? Product development is closely connected with marketing research. No product can exist if customers don’t want to buy it any more. But products get old or out of fashion and demand for them falls. That is why new products should be developed to meet the changing requirements, tastes and preferences of target customers. They may be improved in terms of quality or get a new brand if something new is added (e.g. a branded standard toothpaste becomes “brand + whitening” or “brand + total”). Line extension may be also applied (e.g. a standard shampoo may be coupled with a bottle of conditioner) or a range of chocolates (or their assortment) may be enlarged by adding some new tastes. Remember that products from the buyer’s and seller's point of view are not only goods but may be also called articles, commodities or merchandise. Vocabulary extension It is important to define who our target customers are or are likely to be. To do that we must first divide the market into several distinctive groups. ‘That is called market segmentation, or more precisely, consumer market segmentation and industrial market segmentation. In order to attract more customers we should also study their behaviour and then develop an appropriate strategy for attracting them. Consumer buying behaviour is determined by their perceptions, attitudes, needs and wants, previous experiences, age, sex, education and — last but not least68 Unit 9 Ww — their income. Consumer buying decisions are of great significance since the producer’s, wholesaler’s and retailer’s profits depend on them. Let's look at the basic stages of consumer decision makin; i Problem or < a consumer has run out of bread opportunity < a consumer has won a prize in a lottery L 2. Looking for < the customer seeks out information information on what to buy t 3. Evaluation of | < the customer evaluates different brands alternatives and considers their prices L 4. Buying < the customer chooses the best alternative decisions L 5. Transaction + he buys the product, he completes the transaction Later consumers use the product, assess it and evaluate their experience. If the feedback is positive they repeat their buying decision. If the feedback is negative they start the process from the beginning and choose a different alternative. To be able to provide customers with an attractive product we should first of all do market research: collect and analyse information about customer wants and needs, about their preferences and about competitive products on the market. The research is expected to answer the following questions: * See: Decision-making process in the unit entitled "Management”WwW Customers — Our Priority 69 © Who are our customers? Who are our prospective customers? © Why do they buy our product? © How much do they pay/are ready to pay for it? @ How often do they buy it? © Where do they buy it? We should decide which method of market research to employ: — desk research / secondary data analysis —> we study existing information (e.g. customer complaints, sales records, newspapers) ~ field research / primary data collection and analysis > we first collect information about customers, products and markets by means of: © questionnaires and interviews with customers © consumer panels © test marketing (a limited quantity of a product is sold tentatively in a given area) and then analyse it. In fact there are two basic kinds of marketing: consumer marketing (marketing of goods for direct consumption) and industrial marketing or business-to-business (B2B) marketing (marketing of goods used in manu- facturing). Marketing activities generally involve decisions concerning the 4 P’s (the marketing mix) product, price, promotion and place. By carefully planning these four elements we can provide the customer with the right product, at a reasonable price. He will be informed about the product and encouraged to buy it (promotion). The product will be easily available to him (effective distribution and retailing). Marketing of services usually has three more P's in its mix, i.e, physical environment, people and process (how the service is delivered). In other words, in order to attract more customers and make our products more popular we need to provide reasons for customers to buy our products,70 Unit 9 W not those offered by competitors. What reasons can we provide? Quality, improved design, extras that go with the product, more attractive product features (e.g. better durability, reliability, smaller size), optional features (eg. air-conditioning in cars), better information about the product and, of course, its price. What is needed is a unique selling proposition — a feature that makes our product more attractive than other products offered for sale. What promotional tools can we use to increase sales? © price reductions, discounts and sales (e.g. clearance sale) © personality promotions (famous people ¢.g. film stars promote our products, or authors sign their books) © free samples @ testers © competitions (an opportunity to win attractive prizes) © shows and demonstrations © coupons (they offer money off your next purchase) © two for the price of one © free gifts © Joss leaders (selected products are sold in supermarkets at extremely low prices) And finally, let’s mention two important elements of customer care i.e. how well a customer is attended by shop assistants or sales reps and after-sales service that is vital particularly when you buy durable goods ‘The quality of attendance and after-sales service are essential since they contribute to customer satisfaction. (Satisfied customers may soon become our regular customers!). So let’s never forget that the customer is always right, even if he isn’t!WwW Customers — Our Priority n Vocabulary exercises 1 Complete the following sentences. 1. Product improvement means that new, more attractive ....... are added to it ............ is produced. 3. Your religion, culture, education and social background may affect your 2... eee decisions. 4. If the customer is ....... . +++ with the product he will probably buy it again, 5. This product is particularly ...... feet e eee ee with teenagers. IL. Give synonyms or antonyms of the following words or expressions: 1. potential customer hire purchase casual customer brand switchers throw-away products consumer market segmentation ae PP Ww rangeR Unit 9 WwW Il. Answer the following questions: 1. If you were a producer of expensive cosmetics who would be your target customers? 2. What income and age brackets should they represent? 3. Do you prefer to be a cash customer or to use credit cards? 4. What are the advantages and disadvantages of both these ways of payment? 5. If you were a merchant would you prefer regular customers with rather poor shopping habits or casual ones doing big shopping from time to time? 6. How far do the tastes and preferences of prospective buyers affect production? 7. Why are some customers brand-minded and what is the result of this attitude? 8. What promotional tools do you know? 9. Apart from promotion, what other elements of the marketing mix do you know? 10. What affects consumer buying behaviour? IV. Look at the consumer decision making process again and match the sentences below with the appropriate stages of the process. Note that the sentences inform us what procedures and/or sellers can do to increase sales. a. Persuade customers that our products are better than those offered by competitors b. Accept the payment ¢. Make the act of buying easy and enjoyable for the customer d. Create new needs by offering innovative products e. Supply prospective customers with easily available information about the productWwW Customers — Our Priority B V. Look at the headings and think about the words and expressions that could be contained under each heading. ‘Marketing mix Consumer buying behavior ‘Market research Product development | Customer service Promotional tools Line extension | Categories of customers ‘Market segmentation VI. Topics for discussion 1. Tastes and preferences of customers whether predictable or not? V Ways of attracting new customers Methods of market research Market segmentation — what information does it give? How do supermarkets attract customers? Aupw The importance of customer service. How can you improve customer service? # B2B marketing. Why is it so important? 8. Marketing of services. VIL. Suggested reading J. Chilver, English for Business, DPP, 1996, pp. 68-83 Z. Kopestytiska, M. Neymann, New Business English, PWE, 1996, pp. 53-62 I, MacKenzie, English for Business Studies, Cambridge, 2002, pp. 45-55 M. Neymann, T. Ruhan, Marketing in English, Poltex, 1998, pp. 11-56, 153-157Unit 10SELLING AND BUYING There are things money can’t buy Vocabulary warm up A. Selling Successful selling is an art and it has its own terminology. Let’s examine the most frequently used terms. Apart from those composed of elements you already know (bulk selling) there are: G direct selling (e.g. in wholesale trade) Q door-to-door (or: house-to-house) selling (a salesman visits you and your neighbours trying to sell his goods) O mail order selling (this you probably know) O light/small selling (selling in small quantities) O sole selling (exclusive selling) OQ commission selling (the seller gets a commission on sales) Q selling campaign (no problems with understanding, we hope) © selling charges/expenses (selling costs/costs of sales)Wy Selling and Buying 7 Q selling terms/conditions (no problem with understanding!) O selling out (depleting the stocks) B. Buying Sellers cannot exist without buyers. See how the terms connected with selling are matched with buying, being sometimes very similar. Selling terms Buying terms Sell at auction Sell cash Sell cheap/dear Sell first/second hand Sell on approbation/approval Sell on credit Sell on hire purchase Sell retail Sell off/out Buy at auction Buy cash Buy cheap/dear Buy first/ second hand Buy on approbation/approval Buy on credit Buy on hire purchase Buy retail Buy up (see a different preposition here) And so on, and so on. The terms listed above cover only a small part of this big family of terms.78 Unit 10 wy Vocabulary extension Sales ‘As you probably remember from previous units "goods are products to be sold”. Hence sale is the final goal of production, You all know the terms: bargain sales, clearance sales, seasonal sales or simply sales. Ata sale you may buy goods at reduced prices, But there are also many other important terms connected with sales that you should remember. Sale may be at a profit or at a loss. It may be brisk and it means that goods are easy going. It may function on a cash-and-carry basis (you pay cash and take goods home) and cash and delivery (goods paid for are delivered to your place) and eash on delivery (you pay after the goods have been delivered). A cash only (or cash down) sale means that you cannot pay by means of a credit card or cheque. A charge sale means that your account is debited (charged) with the amount due (money you owe the seller). The use of a credit card is an example of this kind of selling and buying. Hire purchase sale, sale on instalments or credit sale mean you needn’t pay cash at once but in agreed amounts during an agreed period of time. Some goods may be out of stocks because supply does not meet demand, or because they are seasonal goods sold during a clearance sale. Some goods are no longer produced because market analysis shows they are slow to sell (the demand for them is poor). There are many other terms connected with sales. We focus on the most popular ones. We will only briefly mention sales promotion that is aimed at encouraging prospective customers to buy your product (see unit 6). Fairs and exhibitions are important techniques of sales promotion. The terms connected with them are exhibition space, exhibition stand or stall and exhibition hall — a place where you can display or exhibit your products.WwW Selling and Buying 79 Retailing Retailers are usually the final link in the channel of distribution. They have direct contacts with customers who they can use to maximise their profits and to transfer information about customers’ preferences and wants to producers. Location of the retail outlet, pricing strategy and product selection are basic decisions that retailers have to face. Retailers usually use the services of several wholesalers since they need a wide range of products to attract customers. Retailers promote their products by attractive window displays, by offering price reductions or special discounts, by giving customers information and advice about the goods they sell and by correctly targeted advertising. Retail outlets Retail outlets are usually classified according to the size of the selling area that may vary from several to over 5,000 square metres into: small local (or corner) shops or newsagents or off-licence shops O self-service shops Q muitiple stores (e.g. Mothercare) Q variety chain stores (c.g. Marks and Spencer which sell clothes, footwear, cosmetics and food) O department stores Q supermarkets and hypermarkets Now, some more information about multiple stores and supermarkets. Multiples are becoming more and more popular retail outlets. They have wide market coverage — they include tens or hundreds of shops that sell one type of merchandise. The branches usually look identical, so that customers can recognise them easily. The layout inside the multiples is also similar.80 Unit 10 WwW Super- and hypermarkets are by far the biggest retail outlets. They are much bigger than department stores and they offer different categories of goods (foodstuffs, clothes, household equipment, cosmetics etc.). They operate on a self-service basis and offer very low prices (leader prices) of selected products and lots of promotions. They are usually located in the suburbs and offer good parking facilities to customers. Supermarkets and hypermarkets sell all the goods (sometimes about 50,000 different products) ‘on one floor. Now, let’s complete the list of retail outlets by: O specialty stores (they offer a narrow range of merchandise) Q convenience stores (¢.g. at a filling station) Q discount stores (they offer the lowest prices but fewer customer services) O off-price retailers (they buy excess stock of brand-name labels) Q vending machines/slot machines And here are a few examples of retailing without shops (also see section 1) Q party selling O Internet sales TV shops/teleshopping Q Direct selling (e.g. Amway, Avon) Many retailers try to increase their sales volume by diversifying the products they offer for sale (e.g. drugstores that sell soft drinks and confectionery) — it is called scrambled merchandising It is becoming more and more popular because it is appealing to those consumers who seek one-stop shopping. Finally, let's mention personal selling which, in fact, is a promotional presentation of a product to a potential buyer. It is usually made by salespeople who assist customers and give them all the information aboutWwW Selling and Buying 81 the product that is needed to make a purchase decision. The traditional sales talk was intended to provide information and to persuade the prospective customer that he should buy it. However, the so-called canned sales presentation has been replaced by an interactive approach tailored to a specific customer. So, the actual sales presentations vary according to the circumstances. Vocabulary exercises J. Decide whether the sentences are false or true. 1. In mail order selling the buyer needs a catalogue to choose from. 2. Retailing means selling in small quantities. 3. Salespeople rarely get a commission on the value of goods they have sold. 4. If you buy on approval you should pay in advance. 5. Department stores offer a variety of products in different selling departments. 6. Malls are very popular in the USA (N.B. in Warsaw we have Sadyba Best Mall) 7. A receipt you receive at a check-out is not required when you lodge a claim. 8. The scrambled merchandising trend is not yet visible in Poland 9. Specialty stores offer only exclusive luxury goods of great value. 10. A canned sales presentation is always the same, regardless of the type of customer; it is not tailored to customer’s needs.82 Unit 10 W II, Match the words from column A with explanations from column B A B 1. sales volume 2. one-stop shopper 3. tailored 4, amount due 5. receipt a) a proof that you have bought the product b) money you owe to someone ©) the quantity of goods sold d) adjusted to the needs of a specific customer €) the one who doesn’t like to go from one shop to another IIL Look at the map and think about the words and expressions that could be used when discussing the topics presented in boxes. Wholesaling Retailing Personal selling SALES Retailing without shops Sales promotionsSelling and Buying 83 is ov IV. Imagine you are a retailer. You want to place an order for the supply of shoes with a wholesaler/producer. This is what a typical trade contract includes: 1. Product specification, product description Quality Unit price, total price, discounts e. g. quantity discount, cash discount) Trade credit (usually of 30, 60, 90 days) Method of payment Packing, marking, labelling of the product Delivery date After-sales service (warranty) Accessories, spare parts, special requirements Seer anaun Stipulated penalties Discuss the terms and conditions of the contract with the seller. Inform him about your requirements. Negotiate the price. V. Try to complete the following sentences: 1. Pieces of art are often sold at ........... 2.00.0 2. Buy cheap, sell .......... #ERMES Barns 3. If you use a credit card when paying for the goods you have bought you sign a receipt confirming that you agree to have your ........... cee eee debited with the... 0.0.0... Ae weamivmneweanasee sie are usually the transmitters of information from consumers to producers84 Unit 10 Ww Si wenn Semis sell one type of ....... .... through a network of branches located all over the country and looking the same. 6. When you make a complaint you face two alternatives — your complaint may be either accepted OF... cece eee eevee eee eee eens VI. Topics for discussion 1. Shopping round the clock . Competition between small shops and supermarkets in Poland 2. 3. What retail outlets do you usually use? Why? 4. Consumer protection in Poland. 5 . Make a short sales presentation (use some imaginary product e.g. a carpet that changes its shape automatically, aspirin tablets that can be used as contraceptives, a soft drink that changes its colour depending on the mood of the person who drinks it, etc.) VII. Translate the sentences into English: 1. W firmach akwizytorzy (door-to-door salesmen) nie sq zazwyczaj mile widziani. 2. Wyprzedaze posezonowe staja sig ostatnio coraz bardziej popularne w Polsce. 3. Wolelibysmy, aby realizacja (execution) naszego zaméwienia zostala zakoficzona do kofica maja. 4, Powinienes byl zaptacié karta kredytowa a nie got6wka. 5. Kredyt handlowy oznacza, e platnosé zostaje odroczona na 30, 60, a czasami nawet 90 dni. 6. Pomimo, ze supermarkety oferuja niskie ceny nie wszyscy klienci lubia robié tam zakupy.Wy Selling and Buying 85 7. Wszyscy klienci z pewnoscia wiedzieli, ze nasze sklepy daja gwarancje zwrotu got6wki w ciagu 7 dni. 8. Lubie moja prace, pomimo ze czasami irytuja mnie ,,ogladacze” (window shoppers), kt6rzy przychodza do naszego salonu i zadaja mnéstwo pytati. I tak na pierwszy rzut oka widaé, ze nie kupia zadnego samochodu. 9. Jakic sq patiskie wymagania co do opakowania i oznakowania towa- row? 10. Sprawdé jeszcze raz kod kreskowy (bar code) — interesuje mnie data praydatnosci (expiry date). 11. Kary umowne moga byé stosowane w przypadku zerwania kontraktu, 12. Aby zwiekszyé sprzedaz mozemy zintensyfikowaé reklame i zapropo- nowaé klientom bezplatne prébki. Jesli ta forma promogji nie bedzie skuteczna, proponuje wyprzedaz po znacznie nizszych cenach az do wyczerpania zapas6w (until stocks last). VII. Suggested reading: I. MacKenzie, English for Business Studies, Cambridge, 2000, pp.61-62 M. Neymann, T. Ruhan, Marketing in English, Poltext 1998, pp.110-122Unit 11CONSUMER PROTECTION Let the buyer beware! Vocabulary warm up and extension (two for the price of one) ‘A customer has the right to be fully informed about the product he is going to buy, to pay a fair price for it, and — if the product is faulty ~to get a cash refund, repair or replacement (exchange). Customer’s rights cannot be taken away by dishonest sellers. Customers sometimes need protection from the unfair practices of dishonest traders who may deliberately mislead consumers or deliberately sell faulty goods. ‘A customer who buys something (pays for it and receives a receipt) enters a legal contract with the retailer. If a retailer breaks the contract (e.g. gives misleading information about the product, does not give complete information or sells a product that does not meet the description on it) the buyer has the right to get his money back (money-back guarantee). Notices in shops saying "No money refund” are illegal under the Sale of Goods Act because the retailer has the obligation to offer a refund if a customer requires it or doesn’t want to accept a replacement.wy Consumer Protection 89 A very important segment of consumer protection deals with food safety. If food is unfit for human consumption it must not be sold. In the case of food, proper labelling is extremely important, So is the expiry date (best before). Here lawbreakers may face fines or even imprisonment because they endanger our health. It is also the retailers obligation to mark the net weight of contents on the product and to display the price very clearly so that the customer can see it easily (small print is not permitted) The description of the product must be true (e.g. a silk blouse is truly made of silk); it is an offence to give a false description of a product. In the case of certain goods e.g. medicines, electric equipment, toys etc. the retailer must provide the customer with safety regulations, warnings (often in pictograms) or safety advice. Except for generic products, packaging and labelling play an important role in making the customer fully aware of what he buys. Consumer protection is provided by: Ml the Government and its agencies @ Local Councils with their Consumer Protection Departments and Tra- ding Standards Departments @ The Office of Fair Tra rs @ Consumers associations (local and national) H Professional and Trade Associations that draw up Codes of Practice (e.g. an Association of Hoteliers who set up the standards of hotel services) Customer protection also includes legal regulations concerning adver- tising (eg. it is illegal to give false information or to use subliminal advertising). Comparative advertising (which protects producers not customers) is prohibited in many countries.90 Unit 11 WwW Vocabulary exercises I. Match the words in column A and B A B 1 faulty A print 2 subliminal B stadards 3 false C regulations 4 legal D wading 5 local E information 6 fair F advertising 7 small G goods 8 trading H council Il. Find the odd word in each line. 1. fine, imprisonment, offence, deliberately . faulty, misleading, false, true . description, council, marking, labelling . receipt, consumption, obligation, refund . hotelier, food, service, endanger auRYWn . standards, protection, regulations, rules IM, Answer the following questions: 1. Why is it important for the customer to take informed decisions when purchasing products? 2. What unfair practices of dishonest traders do you know?WwW Consumer Protection 1 3. Why is food safety so important? 4. Do generic products have extended guarantees? 5. What is subliminal advertising? 6. What is a Code of Practice? IV. Here are some categories of products: Baby formulas © Cars 1 Jewellery H Clothes for babies @ Books @ Cutlery @ Paints Which require the highest protection? Put them in order of priority. V. Join the halves: A B 1 Pressure groups support A is an important segment of consumer organisations consumer protection 2 The government should ensure | B effective consumer protection laws 3 Unsolicited goods C in improving and maintaining 4 ood safety trading standards. 4 Ir iw sehailer’s obligation D are those sent to you by post even though you haven’t ordered them. 6 Warnings are E often presented in the form of pictograms F to display the price.92 Unit U1 WwW VL. Make a short story based on the following diagram Mr Brown buys a pair of brown shoes | He finds that one sole is broken ! He presents the receipts to the shop-assistant | He explains the nature of his complaint | ‘The shop-assistant consults the shop manager on how to settle the claim | The shop manager informs Mr Brown that his claim has been accepted and apologizes to him J Mr Brown suggests a refund | He gets the money back Try to add as many details as you can. Think about alternative developments (Mr Brown is offered a replacement; the shoe is repaired; his complaint is rejected)Wy Consumer Protection 93 VII. Discussion topics 1. Consumer Associations in Poland. 2. Do you read labels? Why? Why not? 3. Should customers be protected against odd prices? 4, What do you think about generic products? Do you sometimes buy them? 5. Advertisements for children. VIII. Suggested reading Z. Kopestytiska, M. Neymann, New Business English, PWE, 1996 pp. 323-329Unit 12COMPETITION A blessing or a nuisance? Vocabulary warm up It may be said that competition is both a nuisance and a blessing. ‘A nuisance because it means permanent danger of being eliminated from the market, particularly if it is not fair and follows the "eatch as catch can” rule On the other hand, lack of competition will mean a standstill in business everybody would have to be satisfied with the products he was offered, for there would be practically no choice. Competition forms a family of wor s and phrases. Study them carefully because they are often confused. The difference can be easily seen when presented in sentences: 1. We will have to face tough competition with our new product — so it must be a real hit! 2. Our competitors are very keen to appear better than we are! 3. Our goods sell well because their quality and prices are competitive. 4. If two competing corporations focus only on the conflict between them, a third one has the chance to win.wW Competition 97 5. Our position is very strong — we can successfully compete with everybody. You already know that tough competition may mean problems for us. This term is used most often but there are another three meaning the same: animated, strong and active competition. Sometimes competition may be unfair and too tough and then you call it, quite dramatically, cut-throat competition. If we can successfully compete with anybody then our products are defying all competition (nothing can beat them!) Competition may be tacit (not spectacular but permanent), it may focus on quality (quality competition) or price (price competition). The free market economy brings competition we have to face or to meet and we have to do our best in order to beat or crush it. If we add to this a list of anti-competition terms like to out-distance competitors or, in other words, to outrun or to overcome them, you can see that eliminating competitors is one of the key priorities on your way to success. ae Rew Vocabulary extension Now let us look at the types of competition © Pure competition or perfect competition —> many small firms produce very similar products; a single firm cannot have any influence on market prices; a firm can enter or leave the market easily; prices are set by supply and demand (e.g. agriculture) © Monopolistic competition —> a large number of competing firms which sell products that are different from those of their competitors; it is easy to enter or leave the market (e.g. retail stores). This type of competition is common,98 Unit 12 Ww © Oligopoly —> a market in which there are only a few sellers; it is very difficult to enter the market (e.g. cars) © Monopoly — a market in which there are no competitors. A single seller sets the prices of the goods or services supplied. Some monopolies are public monopolies owned by the state (e.g. railways, electricity). Most monopolies are regulated monopolies (e.g. public utilities like gas or water supply, telecommunication services) — they are regulated by the central government or its agencies. Pure monopoly means that a firm has full control over prices (it dictates prices). Every company tries to be as competitive as it can. Even market leaders should not forget about competition. Challengers (No 2 on the market must be competitive either to beat market leaders, or — in the worst case scenario — not to be beaten by market followers. Market followers should also do their best to be most competitive because, with time, they may grow and increase their market share. If they are not competitive enough they may soon be climinated from the market, so they must keep up with the competition. Every company tries to gain a competitive advantage (to be better than competitors) by: © Cost-leadership (trying to be the lowcost producer) © Differentiation (trying to be unique, different than others) © Focus strategy (trying to select a small part of the market segment and to serve it, trying to exclude competitors) If you have a competitive advantage over your rivals, you are likely to be successful on the market.WwW Competition 99 Vocabulary exercises 1. Use the words from the pool to fill in the blanks compete, competitor, competition, competing, competitive 1, We are not 6... , we are business partners. 2. Perfect 2.22... can be seen in agriculture on condition that agricultural production is not subsidised. 3. Oligopoly is a market situation in which you need huge investment to enter the market and to ...........- with the few big producers or sellers. 4. Our terms of payment are very ..........0.4- 5. From among many . 2.2.2.2... companies on the market one will — in time — become the market leader, the second best will be the challenger and others will be followers. 6. A challenger must remember about ............ not to be beaten by one of the followers. nn prices are likely to attract customers. ~ - A market nicher is privileged in that he avoids ...............100 Unit 12 WwW II. What would you do to make these products or services more competitive: @ Fresh flowers ®@ Telecommunication services © Cosmetics for teenagers @ Luxury cars © Orange juice Think about price, quality, innovation, design, packing, availability, promotion etc. Remember that competition is tough. III. Translate the following sentences into English. 1, Mégibym wyeliminowaé konkurent6w, gdybym miat wigce} pienigdzy na inwestycje i reklame. Niestety nie miatem. 2. Zast6j w gospodarce byiby niekorzystny dla duzych i matych firm, niezalenie od tego, co produkuja. 3, Nieuezciwa konkurencja oznacza na przykad dampingowe ceny ustala- ne na towary, kt6re cheemy wprowadzié na rynek. Taka praktyka jest nielegalna, gdyz dzialalnos¢ gospodareza zawsze powinna byé rentowna a dampingowe ceny to ceny ponizej koszt6w produkeji. Ich celem jest wyeliminowanie konkurentéw z rynku. 4. Oni z pewnoscia widzieli, ze konkurencja bedzie ostra. Podjeli jednak ryzyko i odnieSli sukces. 5. W ezasie spotkania wielokrotnie podkreglano, ze w obecnych warunkach nie mozemy pozwolié sobie na nowe inwestycje, ktére, byé moze, 2wiekszylyby nasza konkurencyjnosé w przysztosci. IV. Discussion topics 1. You are a customer. What are the advantages and disadvantages of competition? a |Ww Competition 101 } 2. You are a producer. What are the advantages and disadvantages of | competition? s Why is monopoly criticised? - Public utilities — do you think they need to be regulated by the government? a . Give examples of oligopoly and monopoly in Poland. Comment on them. » You have the monopoly on electric appliances in the area. Do you think it is against the public interest? V. Suggested reading D. Cotton, Market Leader Intermediate, Longman, 2000, pp. 118-125 I. MacKenzie, English for Business Studies, Cambridge, 2000, pp. 90-95Unit 13—————— INTERNATIONAL TRADE Visible or invisible? Vocabulary warm up ‘Why do we need international trade? What are its reasons? Well, let's start with the following statement: no country can be self-sustaining which means that it cannot produce alll the goods it needs because either it hasn’t got the raw materials for production or because the goods produced in other countries are better or cheaper. Because of the climate, bananas grow in Africa but don’t grow in Canada. Brazil can produce coffee, Norway can’t. ‘That is called absolute advantage. The next question is why many customers prefer German cars to Korean ones. Because the Germans have a competitive advantage (or lower opportunity cost) over their com- petitors — their cars are more reliable and safer. They have a longer tradition of car manufacturing, they are experts in car production, they have better technology and materials, and they have highly skilled workers. That’s why their cars find an easy market in many countries all over the world.yy International Trade 105 Vocabulary extension Different countries have different resources: raw materials, skilled labour or cheap labour, more advanced technology or better transport links. Thanks to the international exchange of goods (N.B. foreign exchange means buying and selling foreign currencies!) these resources can best be used to offer customers all over the world a wider range of goods available to them. Generally speaking, international trade means faster economic growth. tners sign long-term agreements thus contributing to closer ties between countries. When countries cooperate closely they benefit from the free flow of products, labour and capital (at least in the regions that promote free trade e.g. the EU). They enjoy better emp- Joyment opportunities, and lower unemployment rates (export means the creation of new jobs). Economies of scale make it possible to lower the prices of goods available on the domestic market. Competition results in increased efficiency of production and — ultimately — improved living standards. In order to protect domestic producers, to prevent unfair competition (e.g. dumping prices) and to reduce jobless figures, governments someti- mes give subsidies to domestic producers (especially exporters) and impose resirictions on imports. As a result export revenues may exceed import spending and then the country enjoys a positive balance of payments. International trade is not evenly distributed all over the world. Most transactions are made between the rich: the EU, the USA-Canada and Japan. Central and Eastern Europe accounts for only 12% of imports into the EU and 16% of exports from the EU while Asian countries (except Japan) enjoy higher exports than imports with the BU — 18% and 16% respectively. Developing countries benefit most from “aid-and-trade” agreements because more preferential terms and conditions of trade offered to them at a bilateral level help them to fight poverty and to promote development. Popular methods of payment used in international trade include: * cash with order (CWO) (you would hate it if you were a buyer because the buyer pays in advance; you would love it if you were a seller)106 Unit 13 cash on delivery (COD) (this method also offers security to exporters) ~ open account (we use the services of correspondent banks) ~ documentary credit (we use a Letter of Credit — L/C) + bills for collection (we use a Bill of Exchange — B/E) The prices quoted in trade contracts are usually expressed in IN- COTERMS (International Commercial Terms) such as for example: CIF — Cost, Insurance, Freight C&F — Cost and Freight FOR — Free on Rail FOB — Free on Board EXW — Ex works INCOTERMS show the elements included in the price of a product, with ex works being the cheapest price since it includes only the unit price of a product; transport, loading, unloading and insurance are not included. When we export or import goods we contribute to a surplus or deficit on the balance of payments, But you must remember that the balance of payment current account is composed of visible and invisible trade (or visible exports and imports and invisible exports and imports)sd International Trade 107 BALANCE OF PAYMENTS Current account Capital account Visibles Invisibles. ‘The difference between money that flows into and out of the country (e.g, bank savings abroad or deposit accounts opened by non-residents) BALANCE OF TRADE ‘The difference between the value of services, know-how, licences etc. exported and imported ‘The difference between the value of goods exported and goods imported108 Unit 13 yy’ Vocabulary exercises I. Look at the following word map and think about the words and expressions you could use to discuss the topics presented in the boxes. State protectionism Reasons Advantages of for Trade PN Free Trade INTERNATIONAL TRADE Methods Problems of payment exporters face Balance of payments INCOTERMS I, The above map presents one box, which was not mentioned in the text, ie. ”Problems exporters face”. Mark the following prompts as true or false. 1. additional costs of transportation Bt 3 4, Si 6. Ti 8. 9. 0. easier procedures more export documents (e.g. certificate of origin) lower quality of products exchange rate fluctuations cross-cultural problems higher taxes for exporters risk of not being paid conflicts, wars, terrorism barriers to tradeWy International Trade 109 IH. Match the words in column A and B A B I. trade a) growth 2. quote b) price 3. unit ) contract 4. economic d) process 5. bilateral ©) agreement 6. jobless £) labour 7. dumping g) figures 8. child IV. Answer the following questions: 1. Why do governments help exporters? How? 2. What are the benefits of international trade? 3. What can developing countries export? 4. What is the importance of tourism as invisible exports / imports? 5. What makes exports more profitable?110 Unit 13 Ww V. Try to discuss the diagram below. More orders | >) _ Increased efficiency Increased output [>| Mass production [> _Eoonomies of scale al Better quality Improved product Ny Lower price |-7|__Ineteased employment f-—>|__New jobs Higher profits NY Higher wages |—| Better living standards ‘Use the words: is due to * is caused by % is a result of makes it possible to & results from VI. Suggested reading: J. Chilver, English for Business, DPP, 1998, pp. 217-234 D. Cotton, Market Leader Intermediate, Longman, 2000, pp. 46-53, 102-109 MacKenzie, English for Business Studies, Cambridge, 2000, pp. 136-139 Z. Kopestyfiska, M. Neymann, New Business English, PWE, 1996, pp. 26-34, 111-336 BoUnit 14GLOBALISATION The big and small. The rich and the poor wee ZRQUI ‘Vocabulary warm up Arguments for globalisation BH Globalisation increases competition and reduces prices ® Big multinational companies ereate new jobs in developing countries Capital flows from the rich to the poor in the form of investment, Arguments against globalisation @ Local companies are more loyal to employees M@ Globalisation may result in unemployment in the West I When a company globalises, its capital moves out of the country @ There are cross-cultural and language problems B Multinationals use cheap IabourWwW Globalisation 113 Vocabulary extension As companies grow they usually expand their activities not only in the country but also abroad. They try to open new subsidiaries, branches, plants or factories overseas. They launch new products. They enter new markets. They win more and more orders all over the world. Their products can be bought everywhere. Think about Coca-Cola or Nike ~ these names sound familiar to us all. Economies of scale lower unit costs (especially the costs of adver- tising) so it is possible to reduce prices and increase sales. Multi- nationals are a threat to small domestic companies, yet — on the other hand — they co-operate with local partners (outsourcing, sub- contracting, franchising). In the case of small local manufacturing companies that use job production methods and offer unique products the prices are relatively high because the products or product components are often hand-made. When batch production methods are used econo- mies of scale result in higher prices of products as compared to mass production. Big global hypermarkets are a threat to small shops because they offer a wider range of goods at much lower prices. They also offer discounts and leader prices and try to create a ”global consumer” for global brands. Anti-globalists oppose the expansion of big multinationals; they want to protect their domestic markets. They believe that global companies use cheap labour (often child labour), do not care for environmental protec- tion (ozone layer, acid rains, recycling etc.) and often pollate the air and water. Anti-globalists criticise multinationals for their strategies of maximising profits and for ignoring social and ethical issues to the detriment of the states in which they operate. Anti-globalists blame globalists for the production of weapons and the arms trade, for turning a blind eye to terrorists who buy those weapons and trade in drugs.114 Unit 14 VW Here is a list of facts and opinions that are often used when comparing local and global companies. Local companies Global companies Local staff, local executives i Traditional, local products @ Low staff turnover lH Fair wages and salaries @ Hand made products or small batches MH Taxes are paid Traditional technology 1 Lower investment Free market competition Local language, traditions and culture Bi Limited advertising budget @ Acting locally H Local staff, foreign executives Hi Global products i High staff turnover i Using cheap labour in developing countries J Mass production methods Tax avoidance ("tax havens”) Sophisticated technology Higher investment Oligopoly, monopoly @ Global culture, English as an international language I More money can be spent on advertising Open borders, global operations Big multinationals put pressure on governments and trade organisations to liberalise and deregulate trade. Liberalisation of trade is a priority for multinational companies. They stress the importance of free trade and oppose to trade restrictions that hamper free market development. They argue that free trade means higher quality standards, lower costs, a variety of products, better chances for developing countries and free movement of people, capital and products. On the other hand, national governments try to protect domestic producers, especially small busines- ses and infant industries”. They try to lower imports and boost exports and this way achieve a favourable balance of payments. Thcy offer grants, subsidies and tax reliefs to promote domestic producers. They impose trade restrictions such as tariffs, quotas, safety norms, import lerWw Globalisation 115 licences, customs duties etc. to protect their economy. The World Trade Organisation, the World Bank, the International Monetary Fund and the trading blocs such as the European Union, NAFTA (North American Free Trade Agreement) or CEFTA (Central European Free Trade Agreement) try to promote free trade and to lower trade barriers, The Third World When we look at the map of the world we can see a dividing line that separates the rich North and the poor South. The United States of America, the European Union and Japan are considered to be highly developed countries with advanced technologies, booming economies and high per capita income. The Third World countries of Africa and Asia suffer from poverty and hunger. They need aid from the rich countries in areas such as education or medical care. They need investment to develop local infrastructure, to build roads, airports or railways. They need new schools and hospitals, they need vaccination programmes, and they need better hygiene and sanitation to prevent epidemics. They need money to fight against AIDS. Children need “save the children” programmes or "distant adoption” programmes to survive. If you want to support one child in Africa just donate $ 8 a month. “Drop the debt” programme is yet another initiative supported by many Europeans. However, financial organisations are not in favour of this solution, Rather, they suggest the following measures: Hi rollover the debts (renew them) reschedule the debts (postpone their repayment) HI use exports to pay high interest on loans Most economists are of the opinion that to help the Third World the rich countries should trade with the developing ones. By offering them barter transactions the developed countries could benefit as well. The Third World Countries can, in turn, offer raw materials, semi-products or cheap labour.116 Unit 14 WwW Vocabulary exercises Look at the map and think about the words and expressions that could be used when discussing the topics presented in the boxes. Local Companies} Global Companies fms ‘Competition Disadvantages] Free Trade Le | GLOBALISATION [— [state Proteconisn Cd Labour Market Come —colberel Antiglobalists ‘Trade Blocs Communication HOW WE CAN |__5f rade ‘Types of Aid —— HELP THE THIRD} WORLD I Individuals Emergency aid Ene Financial help [Channels of Aid] —s— Bavcation | [ Medical care aaa [Supranational eg. the] United Nations WL Try to remember the following collocation. Decide which box each collocation belongs to. 1. Pure competition 2. Debt rescheduling 3. Cheap labour 4. Maximise profits 5. Barter transactionsWwW Globalisation 117 6. Local infrastructure 7. Tax reliefs 8. Trade restrictions 9. Arms trade 10. Free market III. Try to remember the following idiomatic expressions. Decide which box each collocation belongs to. 1. Tax haven 2. Leader price 3. Drop the debt IV. Cloze test. Fill the gaps with suitable words. hoe... +++ products are usually much more expensive than those obtained in batch production. It’s because they are labour intensive. Te wena vnn sme we nig RE is used by McDonald’s all over the world. A ......2........ agreement specifies norms and standards that the local owner should follow. Be cb ka hese +++++... Of scale lower unit costs. 4, Multinationals are a... . +++... to small domestic companies. 5. There are about 140 member ............ 5 seees in the World Trade Organisation.118 Unit 14 WwW 6. Globalisation means that similar goods are sold all over the world culture. V. Match the words in column A and B A B 1. create a. companies 2. unemployment b. flow 3. interest c. rate 4. cheap d. jobs 5. capital e. labour 6. manufacturing £. budget 7. advertising VI. Decide if the sentences are true or false. 1. Globalisation integrates economies, cultures and policies. 2. The WTO and IMF are targets of criticism and protests from anti- globalists. Globalisation hampers cross — border social and cultural exchange. Supranational institutions are accountable to democratic processes. “Dirty” industries do not always pollute the environment. aay The process of industrialisation leads to global warming. 7. Transnational companies exploit the resources of poorer countries.Wy Globalisation 119 8. The “polluter pays” principle is not democratic. 9. We do not need to conserve exhaustible resources. 10. Genetically modified food should be banned everywhere. VI. Complete the following sentences. 1. With economies of scale it is possible to... . 2. Supranational companies cooperate with local partners using the following methods ............ 0000. 3. If your company wants to expand it should enter new markets in order to attract. 2.22... 4. To help developing countries some financial experts ....... 5. Epidemics can be prevented by ...........00. 6. If you want to support a child in Africa just ....... 7. The WTO and IMF try to promote ............-. VII. Translate the sentences into English 1. Ludnogé $wiata wzrosia z 2.5 do 6 miliardow ludzi w ostatnich 50 latach. 2. W tym samym czasie przecigtny dochéd na gtowe zwiekszyt sig prawie trzykrotnie. 3. Globalizacja pomaga ograniczyé ubéstwo w wielu rozwijajacych sie krajach 4, Spowolnienie gospodareze na $wiecie moze mieé negatywny wplyw na pomoc, kt6ra kraje rozwinigte oferuja krajom rozwijajacym sie.120 Unit 14 WwW 5. Zachgcanie do inwestycji i tworzenie miejsc pracy jest szczegélnie istotne dla matych i Stednich firm. 6. Pomoc zagraniczna dla kraj6w Trzeciego Swiata moze zmniejszyé ubéstwo i mieé wielki wptyw na rozw6j gospodarczy tych krajéw. IX. Discussion questions 1. Do you agree that we live in a global village? Are you for or against globalisation? ‘Think globally, act locally. Can globalisation be prevented? Globalisation and politics. Globalisation and corruption. awa wD Can you personally help people who suffer from hunger, diseases and poor living standards? How? Do you want to help? x Food supplies and food production in the world. In the EU. 8. How do volunteers and charities help? X. Suggested reading D. Cotton, Market Leader Intermediate, Longman, 200, pp. 6-13 Z. Kopestysiska, M. Neymann, New Business English, PWE, 1996 pp. 63-5 I. MacKenzie, English for Business Studies, Cambridge, 200, pp. 137-145Unit 15PRODUCTION Two and two makes more than four! That’s the secret of production! (Or creative accounting!) Vocabulary warm up In this unit we are going to deal with the terms connected with production. Here are the basic ones: i to produce = to manufacture Bi producer = manufacturer Mi production = manufacturing W production costs = costs of manufacturing BH production faci — workshop ~ assembly plant — factory Laymen generally perceive production as a processing industry or manufacturing industry, but in fact the term “production” refers also to services that are provided/rendered, to raw materials that are extracted and to agriculture and forestry.wy Production 123 Vocabulary extension ‘The traditional definition of production as processing raw materials into finished goods has been replaced by a more sophisticated definition that says that production is turning inputs” into “outputs”. INPUTS . Dee OUTPUTS + Labour 5 Cepital CONVERSION |] ! Sorices = Management 1 Renee Inputs in a chain store include: ~ land where the store is located / premises — labour of employees — capital (merchandise, equipment) — managerial skills In a factory inputs also include raw materials which are considered to be part of the capital. The same refers to machines. Outputs are worth more to customers than the sum of inputs; in this way value — added is created. It is reflected in the price that is higher than the price of inputs. The price of products or services is important because finally goods and services are sold ie. converted into cash. Products are either tangible items (goods e.g. cars, clothes, bread) or intangible items (services e.g. insurance, banking services, education, health care) Now, let us look at different types of production:124 Unit 15 WwW ~ primary (extraction of raw materials and agriculture) — secondary (manufacturing industry) = tertiary (service sector) ‘The number of companies operating in the three types of production can be illustrated by the following pie chart. We either produce goods for ourselves and family (direct production) or we produce goods to be sold to others (indirect production). The former can be exemplified by an apple-pie made by our grandmother; the latter can be any product or service we buy. If we want to start production we need to consider the following factors of production: BW land (premises, factories, assembly plants) Bi labour (skilled, semi skilled, unskilled workers) B capital (money, assets) i enterprise (idea, entrepreneurial spirit, technical knowledge, manage- ment)WwW Production 125 ‘When starting production we need to decide where to establish a produc- tion plant (strategic location of production facilities is vital). A selection of the best production site is relevant since it determines availability of skilled labour, supply of raw materials, transport networks etc. On the other hand, facilities layout is also important. It involves arrangement of machines, equipment, work places, customer service section and so on. What is important is easy flow of materials and people through the building. A good layout should result in effective utilisation of space and in easy materials handling. When starting production we need capital to buy assets (machines and raw materials) and we need enterprise — an entrepreneur is a person who knows how to start a business and is not afraid of risk. He has good market knowledge, he has brilliant ideas and he knows how to implement them, But sometimes, especially in the long run, it turns out that a good entrepreneur is not an ideal person to run the business simply because he knows what, where, when and how to start, yet he doesn’t know how to continue effectively. Once the production department has been established and starts to operate, we need a production manager rather than an entrepreneur. Production managers are responsible for the overall management of the production process. This involves: @ production planning 1 production engineering (technology) production control @ quality control On the one hand, production managers should manipulate available resources to increase productivity (productivity = output achieved divided by resources used) and, on the other, they must always remember that if you can’t sell something don’t bother to make it. So long term production planning (in close co-operation with the R & D and Marketing Departments) is of paramount importance. The scale of production determines the choice of production methods: i job production = project production — unique orders, made to customer specification, skilled labour force, labour intensive/hand — made