Professional Documents
Culture Documents
4565
4565
Н. В. Лобастова
Международный маркетинг
Учебное пособие
Хабаровск 2002
5
Unit I.
What is marketing?
Reading
Marketers do not only identify consumer needs, they can anticipate them by
developing new products. They will then have to design marketing strategies
and plan marketing programs, and then organize, implement, and control the
marketing effort. Once the basic offer, for example a product concept, has been
established, the company has to think about the marketing mix- the set of
elements of a marketing program, their integration, and the amount of effort that
a company can expend on them to influence the target market. The best-known
classification of these elements is the Four P’s: Product, Price, Promotion and
Place or the marketing mix.
Vocabulary focus
I. Look through the text and match the words in italics with their definitions
given below. Read and translate the sentences with these words.
1. mixture; a group of different things, people, etc
2. for smth that brings gain, advantage or improvement
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II. Read and translate the following sentences paying attention to the different
types of marketing.
1. Conversational marketing is the difficult task of reversing negative
demand, eg. for dental work, or hiring disabled people.
2. Stimulational marketing is necessary where there’s no demand, eg. which
often happens with new products and services.
3. Developmental marketing involves developing a product or service for
which there is clearly a latent demand, eg. a non-polluting and fuel-
efficient car.
4. Remarketing involves revitalizing falling demand, eg. for churches, inner
city areas, or ageing film stars.
5. Synchromarketing involves altering the time pattern of irregular demand,
eg. for public transport between rush hours, or for ski resorts in the
summer.
6. Maintenance marketing is a matter of retaining a current (maybe full)
level of demand, eg. in the face of competition or changing tastes.
7. Demarketing is the attempt (by governments rather than private
businesses) to reduce overfull demand, permanently or temporarily, eg.
for some roads and bridges during rush hours.
8. Countermarketing is the attempt to destroy unwholesome demand for
products that are considered undesirable, eg. cigarettes, drugs, handguns,
or extremist political parties.
III. Match up these marketing actions with the eight tasks described above.
Tell under what circumstances we should use them.
a. Alter the pattern of demand through flexible pricing, promotion, and other
incentives.
b. Connect the benefits of the product with people’s needs and interests.
c. Find new target markets, change product features, develop more effective
communication.
d. Find out why people dislike the product, and redesign it, lower prices, and
use more positive promotion.
e. Increase prices, reduce availability, make people scared.
f. Keep up or improve quality and continually measure consumer satisfaction.
g. Measure the size of the potential market and develop the goods and
services that will satisfy it.
h. Raise prices, reduce promotion and the level of service.
V. Complete the following collocations from the text above. Find the
sentences with them, read and translate.
VI. Read the following sentences about the market structure. Choose the
correct alternative to complete each sentence:
1. In many markets there is a firm with a much larger market share than its
competitors, called a ………………… .
a. market leader b. monopolist c. multinational
6. A market in which one single producer can fix an artificially high price is
called …………….. .
a. homogeneous market b. monopoly c. undifferentiated market
8. A market dominated by a few large suppliers, and which it is hard for new
companies to break into, is called a/an ……………
a. conglomerate b. market concentration c. oligopoly
11. A situation in which the market leader can determine the price that its
competitors can charge is called …………
a. dominant- firm oligopoly b. market failure c. monopoly
12. A market in which it is normal to have only one supplier – e.g. utilities
such as water, gas, electricity – is called a ………..
a. conglomerate b. natural monopoly c. pure monopoly
It’s true that we’ve been deeply affected by our competitor’s latest
s………… s………… . A new plan of action must be developed as soon as
possible.
L…………….. have been particularly high in every foreign c…………. . We
have lost m………. m………. in Russia and Venezuela. Even in the home
market we c………… c………. . However we are not going to g…… u… .
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We are developing a new m……… p…….. which will help us regain some
of our market share. The war will c……….. for some time yet but we are
confident that we can still win.
Replace the words and phrases you inserted in the text with military
expressions given below.
surprise attack, territory, casualties, surrender, are outgunned,
campaign, key strongholds, rage on.
Reading. Complete the texts by inserting the words below each text. Read and
translate the texts.
An Offensive strategy
We’ve been making successful ………. into their market share for 18
months, and now is the time for a change of ……….. . We’re going for a
frontal …….
We have an excellent product, and if we use all the ……… in our …….. , we
should be able to convince consumers of this fact. We will …… all our
resources and launch a media ………… . This will be the most expensive
…… in our history. We have also recruited twenty new sales reps and we
are going to send our ……… into the field, to …….. their market.
A Defensive Strategy
We are going to dig in and defend our ……. . This is a suicide ….. by our
competitors. They probably expect us to ……. , and a small price cut won’t
………… them. We have enough cash reserves to win a price ……… , so I
suggest that we cut our price 20% immediately. The best form of …….. is
attack. You’ll see, they’ll …….. within two weeks. This is a ……..they’re going
to lose. There is no way they are going to …… our market.
A Takeover bid
bid- an offer to buy smth at a particular price; to make an offer
After striking the first blow with their unsuccessful dawn …… last month,
Wright & Bergkamp have now launched a takeover bid for their High Street
rivals Merson’s. A fierce …….. is expected for control of the electronics
retailer. For Merson’s chairman David Adams, the bid came as no surprise:
“They’ve been ….. our shareholders with propaganda for weeks, but they won’t
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succeed. We’re ready for ……. and we’re going to …….. them all the way.
“Indeed Merson’s have already launched their …….. , issuing a press release
which questions some of Wright & Bergkamp’s accounting methods. Yet City
analysts suggested yesterday that the ………’s hostile bid is likely to succeed
unless Merson’s ……… with another retailing group.
The aim of market leader is obviously to remain the leader. The best way to
achieve this is to increase market share even further. If this is not possible, the
leader will at least attempt to protect its current market share. A good idea is to
try to find ways to increase the total market. This will benefit everyone in the
field, but the market leader more than its competitors. A market can be increased
by finding new users for a product, by stimulating more usage of a product, or
by exploiting new uses, which can sometimes be uncovered by carrying out
market research with existing customers.
To protect a market share, a company can innovate in products, customer
services, distribution channels, cost reductions, and so on; it can extend and
stretch its product lines to leave less room for competitors; and it can confront
competitors directly in expensive sales promotion campaigns.
Market challengers can either attempt to attack the leader, or to increase their
market share by attacking various market followers. If they choose to attack the
leader, market challengers can use most of the strategies also available to market
leaders: product innovation, price reductions, cheaper or higher quality versions,
improved services, distribution channel innovations, manufacturing cost
reduction, intensive advertising, and so on.
Market followers are in a difficult position. They are usually the favorite target
of market challengers. They can reduce prices, improve products or services,
and so on, but the market leader and challenger will usually be able to retaliate
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One possibility for followers is to imitate the leaders’ products. The innovator
has borne the cost of developing the new product, distributing it, and making
the market aware of its existence. The follower can clone this product depending
on patents and so on, or improve, adapt or differentiate it. Whatever happens,
followers have to keep their manufacturing costs low and the quality of their
products and services high.
Small companies that do not establish their own niche – a segment of a segment-
are in a vulnerable position. If their product does not have a “unique selling
proposition”, there is no reason for anyone to buy it. Consequently, a good
strategy is to concentrate on a niche that is large enough to be profitable and that
is likely to grow, that doesn’t seem to interest the leader, and which the firm can
serve effectively. The niche could be a specialized product, a particular group of
end-users, a geographical region, the top end of a market, and so on. Of course
unless a nicher builds up immense customer goodwill, it is vulnerable to an
attack by the market leader or another larger company. consequently, multiple
niching – developing a position in two or more niches – is a much safer strategy.
1. If a market leader succeeds in increasing the size of the total market, its
competitors benefit.
2. The size of a market can be increased without attracting any new consumers.
3. Market challengers generally attack the leader and market followers.
4. Market challengers cannot use the same strategies as leaders.
5. Market leaders generally win price wars.
6. Market challengers can attack leaders by way of any of the four P’s of the
marketing mix.
7. Market followers generally achieve cost reductions through economies of
scale.
8. The most profitable companies are logically those with medium or high
market \ share.
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Vocabulary focus
Look through the text and match italicized words with their definitions given
below. Translate the sentences with these words.
Discuss the meaning of these strategies. Use a good dictionary such as the
Longman Business English Dictionary to help you.
cost cutting, a demerger, rationalization, a sell off, a disposal, acquisition,
an economy drive.
The verbs and nouns below are often combined when talking about strategy.
Make word partnerships. Then use them to make up your own sentences.
Eg. The company has achieved its target of a 20% market share.
verb noun
achieve review develop goal plan objective target
implement set employ strategy tactics workers
Speaking
What is strategy? Which of these definitions do you prefer? Why?
Innovation
The words below are often used when talking about innovation. What do they
mean?
R&D, brainwave, blueprint, prototype, setback, breakthrough, patent.
of technical expertise, their marketing skills. And time and again these
characteristics enable them to develop the innovative concept far more
effectively than the innovators themselves.
This is not to say that there is no role in business for the great innovator. After
all, General Electric was built on the extraordinary creativity of Thomas
Edison’s mind, the Ford motor company on the abilities of its eponymous
founder. The imagination of Walt Disney created a company that is still without
parallel or rival. Perhaps Akio Morita of Sony occupies a similar place in the
annals of modern business.
( From the Financial Times)
Use words from each box to make word partnerships from the article
B. The sentences below describe stages in the launch of a new drug. Use the
verbs in the box to complete the sentences. Then put them in a logical order.
develop test test publish apply for approve by
carry out train grant
1. The drug ………… on animals.
2. The drug ………… in the lab.
3. Market research …………….. .
4. The drug ……….. on humans.
5. The trials ……… the Ethics committee.
6. A licence ………………….. .
7. The results of the trials ……………. .
8. Approval …………… by the authorities.
9. The drug representatives ……………... .
C. Use the notes below to describe stages in the launch of a new car. Include
passive and active structures. Use words first, next, then and finally.
1. designer – choose
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2. design – produce
3. model – build
4. modifications – make – R&D/engineers
5. design – modify
6. prototype - build
7. new engine – use – or existing engine – develop – can be very
costly
8. new model – test – special tracks or roads
9. deal with problems – costly if problems serious
10. journalists – invite – test – drive model
11. reviews – write – by journalists – major newspapers and car
magazines
12. model – display – famous more exhibition – Geneva or Earls Court
Motor Show
1. When preparing a presentation, try to find out what your audience already
knows.
2. Everyone in your audience should be at the same language level.
3. Visit the room in which you are presenting before you actually make the
presentation.
4. The first stage of your presentation is when you should get the full
attention of your audience.
5. If you memorize the introduction, you will be more confident when
making a presentation.
6. The whole text of your presentation should be written on post cards.
7. If you use an overhead projector, you should remember to turn it off when
you don’t need it.
8. Remember that the content of the presentation is much more important
than your presenting style.
Skills Presentations
Useful language
Introducing yourself
Good morning everyone. Let me introduce myself. My name is ….. . I’m a
specialist in ….. .
Structuring the presentation
I’m going to divide my talk into four parts. First I’ll give you ….. ; after that
…. ; finally ……. .
Inviting questions
If you have any questions, don’t hesitate to ask. I’ll be glad to answer any
questions (at the end of my talk).
Giving background information
I’ll give you some background information. Let’s start with the background.
Referring to the audience’s knowledge
As you know….. As you are aware…… .
Changing the topic
Right, let’s now move on to ….. . OK, I’ll now look at …… .
Concluding
To sum up ……. . So to summarize…… .
Referring to visuals
If you look at the graph …… . Could I draw your attention to the chart? If you
take a look at the first year, you’ll see …… .
Ending
Thanks very much. Any questions? Well, that’s all I have to say. Thank you for
listening.
C. Listen to the second part of the interview. Jeremy talks about a situation in
which change was handled well.
Make notes under the headings below. Compare notes with a partner.
Situation Chief Executive Communication Difficult decisions
D. Complete these sentences from the interview. Use the words in the box. The
words in brackets will help you.
volume margins significantly lead vision segment
1. The client had to …………. (considerably) reduce its costs.
2. It was trying to compete with its major competitor on a basis of ……….
(production of large quantities).
3. The major competitor has a major ……… (a position ahead of all others).
4. Every single person in the organization knew this chap’s ……. (idea of
how the future will be).
5. They were going to …….. the market (divide the market into parts).
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Text 4 Competition
B. Complete the chart with companies or products in your own country (for
example, cars, soft drinks, sports shoes, jeans). Compare your table with a
partner.
Product type….
market leader market challenger market follower market nicher
…. ….. ….. …...
C. Which products do you buy that are not market leaders or market
challengers? Why do you buy them?
D. Choose one adjective from each pair to make word partnerships with
competition. Then use them to comment on industries or companies.
strong / hard
fierce / aggressive
dirty / unfair competition
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heavy /tough
intense / deep competition
E. Match the verbs with the prepositions (where necessary) to make phrases
with the competition. Then make sentences using some of the phrases.
For example, Our company welcomes competition – it keeps us alert.
The text below presents three strategies for firms to achieve above-average
performance. Before you read it, discuss what strategies companies in the
following sectors might use to compete with the rivals:
B. Read the first sentence only of each paragraph. What three strategies does
the text mention? Do you think they are similar to any of the ideas you
discussed?
C. Match the words below to the definitions. Then read paragraph one.
D. Match the words below to the definitions. Then read paragraph two and
three.
E. Match the words below to the definitions. Then read paragraph four and
five.
tailors making the best use of
to the exclusion of adapts
optimizing the opposite of wide
narrow not including
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The means for differentiation are peculiar to each industry. Differentiation can
be based on the product itself, the delivery system by which it is sold, the
marketing approach, and a broad range of other factors. In construction
equipment, for example, Caterpillar Tractor’s differentiation is based on product
durability, service, spare parts availability, and an excellent dealer network.
The third strategy is focus. This strategy is quite different from the others
because it rests on the choice of a narrow competitive scope within an industry.
The focuser selects a segment or group of segments in the industry and tailors its
strategy to serving them to the exclusion of others. By optimizing its strategy for
the target segments, the focuser seeks to achieve a competitive advantage in its
target segments even though it does not possess a competitive advantage overall.
A firm that engages in each strategy but fails to achieve any of them is ‘stuck in
the middle’. It possesses no competitive advantage. This strategic position is
usually a recipe for below-average performance. A firm that is stuck in the
middle will compete at a disadvantage because the cost leader, differentiators, or
focusers will be better positioned to compete in any segment. In most industries,
quite a few competitors are stuck in the middle.
From Competitive Advantage,
By Michael Porter
F. Answer these questions about the text.
2. Which sentence best expresses the main idea in paragraph two or three.
When a firm uses a differentiation strategy:
a. it tries to persuade consumers that its products have special
qualities.
b. it tries to reach a small group of loyal customers.
c. it wants to attract as many buyers as possible.
3. Which of these sentences best expresses the main idea in paragraph four.
If a firm chooses focus as its strategy, it tries to:
a. do better than its rivals in a small part of the market.
b. prevent other firms from entering the market.
c. do business in a large number of narrow markets.
4. In the final paragraph, does the writer say it is a good or bad thing for
firms to be stuck in the middle? Why?
1. Choose the correct answer. Kevin thinks the way to stay ahead is to focus
on:
A. the actions of your competitor. B. your own products and customers.
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2. Listen to the second part of the interview. Which of the se statements more
accurately reflects Kevin’s views?
1. Price is the most important element when you are talking about value.
2. Value for money is not only about price. Cheaper is not always better.
3. Do you think competition always leads to better products and better value?
4. Listen to the third part of the interview. What changes in consumer habits
does Kevin predict?
The CEO and the Production Manager of a small but successful PC lap top
firm are discussing some sudden news from their sales manager, Steve
Andrews. Steve has been negotiating an important contract.
A. Read the conversation and find examples of different forms of future tense.
CEO I’ve got bad news from Steve about that contract he’s been
negotiating with Ambros plc. He’s heard that another company’s
putting in their own bid in three days’ time.
Manager Oh no! We’re counting on that contract. What can we do?
CEO Well, we are going to fight it. Our rivals say they’ll match us for price
and beat our deadlines so we’ll have to concentrate on those two
issues. Steve says we are going to beat them on every other detail, but
price and deadlines are the crucial items.
Manager Well, you can make the decision to cut prices but, in terms of
deadlines, our assembly lines are already working to capacity except
at the weekends.
CEO I know. I can cut prices slightly but do you think you can beat our
rivals’ deadlines?
Manager Well, the union meets later this afternoon for their regular monthly
meeting. I’ll raise this with them as a matter of priority.
CEO Can you persuade them to work extra hours at the weekend?
Manager Yes, I think so. Can you authorize overtime payment in advance so
it’s not an issue when I’m talking to the union?
CEO Yes, I’ll do that once we finish this meeting. What else?
Manager We have to contact Steve so he can tell Ambros that we are going to
respond with an improved bid. We’ve only got two days to prepare.
CEO All right. You prepare for the meeting. Tell the staff that we’re
relying on their cooperation. I’ll authorize the overtime payments.
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B. Work in pairs. Take turns to add comments to the sentences below. Use
will, going to, the present continuous, or the present simple.
Skills Negotiating
Useful language
Match the sentences on the left with the more diplomatic sentences on the
right
1. We must talk about price first. a. Your price seems rather high.
2. There’s no way we can give you b. Unfortunately, I can’t lower my price.
any credit. c. Could you give me a discount?
3. I want a discount. d. I’m afraid we can’t give you any credit.
4. I won’t lower my price. e. I think we should talk about price first.
5. Can you alter the specifications? f. I wonder if you could alter the
6. Your price is far too high. specifications?
Being diplomatic often brings the best results when negotiating. It is important
not to be too aggressive. Think of other ways to express sentences 1-6 in the
Useful language box more diplomatically.
Background
City Plaza Hotel is situated in downtown Toronto, Canada. A few years ago it
was the leader in its segment of the market. There is no official star system in
Toronto, but travel guides always place it in the four-star category. Nowadays
City Plaza has become a market follower instead. It has been losing money, and
its traditional customers have been going to rival hotels such as the Majestic and
Belvedere. Reasons for this include: competition; the increasing cost running the
hotel; the lack of capital to improve its accommodation and facilities (these have
fallen well below standard in recent years).
City Plaza needs a new strategy. Fortunately, the management now has
sufficient capital to finance that strategy. City Plaza was recently bought by the
dynamic hotel group, Price Inc., who have allocated C$2.75 million to make the
hotel more profitable and competitive. The Chief Executive of Price Inc.
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believes that City Plaza will make a good contribution to group profits if it
positions itself correctly in the market.
Table 1
Majestic ****
Description Market leader. 300 rooms. 5 large conference rooms.
Luxurious and very customer-orientated. A ‘yes I can’ attitude.
Target market High income. Tourists, business people, conventions and
special events, e.g. golf tournaments, concerts, etc.
Facilities A wide range including: bar and night club, 2 restaurants, swimming
pool, fitness center, gift shop and hairdresser. Guest rooms have many facilities,
e.g. coffee-maker, air conditioning, safe, minibar; fax machine and voice mail, if
required.
City Plaza****
Description Market follower. 250 rooms. 3 conference rooms. Needs to
redecorate, modernize and improve its service.
Target market Tourists, business people, group bookings and organizers of
conventions (as above).
Facilities one large restaurant and bar, shop, sauna; tour organizer. Guest
rooms have good basic facilities, e.g. coffee-maker, hair dryer, iron, minibar.
Belvedere ***
Description Market nicher. 190 rooms. 1 conference room. Inexpensive for
its three-star rating.
Target market Middle-income tourists. Package tour visitors.
Facilities One restaurant and bar, newsagent / gift shop. Health care studio and
small swimming pool. Guest rooms have similar facilities to City Plaza.
Mount Charlotte **
Description Budget hotel. 360 rooms. No conference room. A large
breakfast room. Cheap prices, friendly staff.
Target market People looking for cheap, ‘no frills’ accommodation.
Facilities No restaurant. A small bar. Comfortable rooms, with few facilities.
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4
C$ Million (pre-tax profit)
Mount Charlotte
3
Belvedere
2
0
City Plaza
Task
To choose the right strategy, the Chief Executive of Price Inc. has called in a
team of consultants, Maple Leaf Associates (MLA). The group will consider the
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options and advise Price Inc. on the correct positioning of the hotel. MLA has
formed small teams within its organization to study the problem.
You are one of MLA’s consultants. Work in teams and do the following:
1. Analyze and interpret the data. Decide what facts and figures are
important to help you work out a new strategy for City Plaza.
2. Discuss each option, considering its advantages and disadvantages. If you
wish, you may add other options.
3. Decide on a strategy for City Plaza and note down your reasons. Then
present your recommendations to the other groups.
4. Working as one group, agree on a strategy and action plan for City Plaza.
Options
The management are considering four options before deciding how to use the
C$2.75 million. They estimate that the cost of redecorating a room to ‘market
leader’ standard would be approximately C$12,000. The options are as follows:
1. Take City Plaza Hotel up-market so that it is clearly seen as market
leader.
2. Reposition the hotel as a budget hotel with either low prices and limited
service, or higher prices and a basic range of services.
3. Stay in its present position as a market follower, but improve the hotel.
4. Aim at a niche market, for example, middle- income older tourists, family
groups, or young visitors.
AT&T: We aspire to be the most admired and valuable company in the world.
Our goal is to enrich our customers’ personal lives and to make their businesses
more successful by bringing to market exciting and useful communication
services, building shareowner value in the process.
Sierra Club: To explore, enjoy, and protect the wild places of the Earth; to
practice and promote the responsible use of the Earth’s ecosystems and
resources; to educate and enlist humanity to protect and restore the quality of the
natural and human environment; and to use all lawful means to carry out these
objectives.
MADD: The mission of Mothers Against Drunk Driving is to stop drunk driving
and to support the victims of this violent crime.
Huff Realty, Inc.: Jim Huff Realty is a company dedicated to excellence; using
innovative real estate marketing skills and state-of-the-art technology to provide
the highest-quality services to our clients and customers; above all, preserving a
belief in people.
Pfizer Inc.: Over the next five years, we will achieve and sustain our place as
the world’s premier research-based health care company. Our continuing
success as a business will benefit patents and our customers, our shareholders,
our families, and the communities in which we operate around the world
Discuss the statements. Do you agree with them? Give your reasons.
1. Defining the mission for an organization is the first stage of strategic
planning.
2. Competitive advantage for the firm is the underlying goal for all
marketing strategies and plans.
3. Business planning is an ongoing and integrated process of making
decisions that guide the firm both in the short and long term periods.
4. Companies should focus on what they do best rather than diversify.
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Marketing Practice:
1. Assume that you are a marketing director for a small local bank and that your
boss, the company president, has decided to develop a mission statement to add
to this year’s annual report. He’s admitted that he doesn’t know much about
developing a mission statement and has asked that you help guide him in this
process. Write a memo outlining what exactly a mission statement is, why firms
develop such statements, and your thoughts on what the bank’s mission
statements might be.
2. Assume you are the new marketing assistant in a small municipal hospital
whose market consists of the residents in the city district and the students and
faculty of a large nearby university. You have been asked for ideas that
organization might use in promotional activities to draw clients who might
otherwise choose a larger facility across town. Develop a list of the consumer
segments in the hospital’s market ( for example, elderly, children, college
athletes, international students, professors, and so on), and for each segment,
identify possible features and benefits the hospital might emphasize in its
promotions to attract that segment.
A. You will hear an interview with Marjorie Scardino, Chief Executive of the
media group Pearson plc. Before you listen, choose the best definition for
each of the italicized words below. (Market Leader p.98)
1. The assets of the company are
a. the customers they have.
b. the things they own.
c. the markets they are in.
2. If a company improves its cash generation
a. it increases its sales revenue.
b. it has cash available at all times.
c. it invests more in its business.
3. If a company disposes of an asset, it
a. values it.
b. keeps it.
c. sells it.
4. If companies have an authoritarian way of management
a. the management give responsibility to workers at lower levels.
b. the management keep tight control over everyone and everything.
c. the management have many ways of communicating with
employees.
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B. Listen to the first part of the interview and make notes. Then complete
the summary of what she says.
Developing a strategy
C. Now listen to the second part of the interview. Which of the trends
below are mentioned.
1. Companies are becoming more international.
2. Employees are becoming more valued by management.
3. Employees are working more in teams.
4. Management are having more control over staff.
5. Management are changing their style.
Skills / Decision-making /
A. Discuss these questions
1. Is decision-making only about sensible, rational choices? Should emotion
play a part? What about when choosing the following?
a wife or husband, a present for someone, a new company logo,
a holiday destination, a new product to develop, someone for a job.
2. Think of an important decision that you have made. How did you decide?
3. Do men and women have different ways of making decisions?
4. Who makes the big decisions in your household? Why?
B. Which ideas below do you agree with? Which do you disagree with?
Why?
1. Before making a decision:
a) write down the pros and cons.
b) try to reduce stress.
c) take a long time.
d) have a sleep or a rest.
e) consult a horoscope.
f) ask as many people as possible.
2. If a choice has cost you a lot of time and money, stick to it.
3. Rely on the past.
4. Reduce all decisions to a question of money.
5. Be totally democratic in group decision-making.
Useful Language
Rope play
You are board members in a manufacturing firm which employs 500 people. As
your company is making a loss, you must cut costs. Hold a meeting to choose
one of the following options. State what action you intend to take.
Cut factory workers’ wages by 10%
Reduce everyone’s salary by 8%
Make 50 employees redundant
Pay no end-of-year bonuses
Case study
Background
Texan Chicken was founded by Eva and Ramon Martinez. They had had no
previous experience in the restaurant industry. They opened their first restaurant
in West London, and within five years had built up a chain of 40 outlets, using a
franchising system.
The reason for their success was the quality of their product. Their delicious
fried chicken was based on a recipe that Ramon had discovered when traveling
in Texas. It was served with a sauce which varied from mild to very hot,
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depending on the customer’s taste. All the restaurants offered a take-out service,
which was popular with customers.
When Texan Chicken went public the share price rose by 12% within a week.
There seemed to be no limit to Texan Chicken profits and expansion.
Present situation
Unfortunately the company’s share price has fallen recently by over 80%. There
has also been strong pressure on Eva and Ramon Martinez to resign as co-
chairmen of the business. At present, they own 40% of the shares. The other
major shareholder is a South African businessman, Martin Webb, who owns
12%. Eva and Ramon Martinez have called in a team of management
consultants to advise them on their future strategy.
Listening
Customers
Age: 18-30 58%
30-40 32%
40+ 10%
Sex: Male 54%
Female 46%
Status: Single 65%
Married, no children 23%
Married, with children 12%
Task
You are members of management consultant team called in by Eva and Ramon
Martinez to advise them on their future strategy. Discuss the options below.
Consider any other ideas for improving profitability. Work out a plan of actions
which will turn the company round.
Options
The following options will be discussed by the management consultants at their
next meeting.
1. Persuade Eva and Ramon Martinez to resign. Appoint a new Chief
Executive with extensive experience of franchising in the food industry.
2. Seek opportunities to merge with a large fast food company which could
offer management expertise and financial resources.
3. Improve profits by extending in Europe through joint ventures. A German
supermarket chain has already shown interest in such a venture.
4. Make major changes in the business. For example:
a) Have more company-owned outlets. This would give greater
control over the restaurants.
b) Offer special promotions (e.g. huge discounts on certain meals).
c) Launch a major advertising campaign.
a) Listen and match the terms below with the definitions. Then use three of
the terms to complete the newspaper extracts.
Business in brief
b) Read the following extracts from the financial press. Decide whether each
one refers to a) a joint venture, b) a merger or c) an acquisition or a takeover.
1. Walt Disney Co., Hearst Corp and Peterson Publishing Co. are discussing a
deal that would combine their considerable influence in the publishing world
to launch a weekly magazine to compete with ‘Sports Illustrated’ next year.
3. Poland may call off talks on the sale of newsstand chain Ruch to France’s
Hachette distribution service if it fails to make a firm financial offer soon.
In the interview below a Chief executive describes how he and his board
decided whether to merge with a larger company in the same industry.
Read the interview and note down the arguments for and against the
merger.
A merger of equals had a lot of appeal. If you combine the Number 1 and
Number 2 players in an industry, by definition you are Number 1 in terms of
size. And when you are growing that fast, you have a number of key
management openings you have to fill. By combining two companies with good
management teams, you automatically build up the strength of your
management and you do it quickly. You can also widen your customer base and
have more distribution channels.
In addition, the merger automatically makes your remaining competition second
level. As a result, your competition must rethink its strategy. In the end, you
force a period of mergers and acquisitions on your competition. They have no
choice but to respond to the changes you initiated.
When we looked more closely, our concerns were raised. For example, 50
percent of large-scale mergers fail. Mergers can fail on a number of levels. They
can fail in terms of their benefit to the shareholders, customers, employees and
business partners. A decision has to be right with each of those groups, or we
would not go forward with it.
If you merge two companies that are growing at 80 percent rates, you stand a
very good chance of stopping both of them. That’s a fact. For a period of time,
no matter how smoothly they operate, you lose momentum.
Our industry is not like the banking industry, where you are acquiring branch
banks and customers. In our industry, you are acquiring people. And if you don’t
keep those people, you have made a terrible, terrible investment. We pay
between $500,000 and $2m per person in an acquisition. So you can understand
that if you don’t keep the people, you’ve done a tremendous disservice to your
shareholders. So we focus first on the people and how we incorporate them into
our company, and then we focus on how to drive the business.
From Thought leaders, Loel Kurtzman
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3.When Cisco Systems buys another company it pays special attention to:
a. the money it has spent
b. the staff it acquires
c. the opinions of its shareholders
4. What is the most interesting point that Chambers makes, in your opinion?
Explain why.
1. The reason why the merger failed are very simple to understand.
2. The shareholders were afraid that Volvo would lose its Swedish identity.
3. The shareholders feared that Renault was trying to take over their
company.
4. The Swedish management were keen for the merger to go ahead.
Can you think of any other reasons why a merger might fail?
Read the text about failed mergers, which uses the Volvo-Renault deal as an
example, and see if it mentions any of your suggestions.
When egos collide ( In the acquisition jungle, alpha males are deal-
breakers)
Perhaps business schools should add anthropology to the curriculum; the
parallels between the behavior of corporate executives and that of great apes are
uncanny. The spectacular collapse of the supposed alliance of drug giants Glaxo
Wellcome and SmithKline Beecham is a textbook example.
There was a clear business logic to the union of the two pharmaceuticals giants.
The deal gave the companies a drugs research and development budget more
than twice the size of their closest rivals, Novarris and Merck, and the
combination of their complementary research technologies could have left them
streets ahead of the competition; cost-cutting alone could have saved $1bn. But
because these two great beasts of the jungle (the CEO’s of the corporations)
chose to throw sand in each other’s faces, the deal is off, at least for now.
Europe’s most spectacular and public bust-up was between automotive giants
Volvo and Renault. In September 1993 Volvo and Renault announced they were
to tie the knot, with Volvo holding a minority 35% stake. However, three
months later Volvo shareholders and senior management rejected the marriage
plans because of concerns that the deal undervalued Volvo, and was turning into
a Renault takeover, without Renault paying the acquisition premium. Simmering
resentment over chairman Pehr Gyllenhammer’s dictatorial management style at
Volvo added spice to the management revolt. The divorce is reputed to have cost
Volvo several hundred million dollars and forced the resignation of
Gyllenhammer after more than two decades in the driving seat. Egos play such a
large role when two giant corporations come together that it is hard to make
them work unless one personality is prepared to take a back seat or step down.
The $26 bn. marriage between Swiss giants Ciba and Sandoz to form Novartis
in 1996 is often held up as a textbook example of how mega-mergers can
work.It is successful, but much of that success is dependent on the fact that key
personnel were ready for retirement, or were prepared to relinquish old roles in
favor of new opportunities in other scenarios.
Compromise is essential if mergers between two powerful corporations are to
work to the advantage of both parties and their shareholders. Otherwise friendly
discussions break down and can easily turn into all-out war. In the corporate
jungle, the question is now whether the imperatives of shareholders can control
the egos of managers, to force through deals that deliver them the financial
return they expect. This is where independent directors ought to play a part,
although they rarely do.
Reading
Vocabulary
1. Choose the best definition for the word in italics in the sentences from the
text.
1. The parallels between the behavior of corporate executives and that of
great apes are uncanny.
a. similarities b. differences c. distinctions
3. The deal give the companies a drugs research and development budget
more than twice the size of their closest rivals.
a. competitors b. partners c. friends
6. The problem only appear when they have to get together with peers in
their organization who don’t share their views.
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3. Find the following idioms in the text. In pairs, discuss what they mean.
1. to throw sand in each other’s faces
2. to climb to the top of the corporate ladder
3. a boardroom bust-up
4. in the driving seat
5. to take a back seat
Discussion
Read these profiles of some senior business people. Which of the
characteristics do you think are essential, useful and dangerous? Discuss your
answers.
1. Complete these sentences with one of the verbs paying attention to the
italicized preposition, translate the sentences.
agree apologize build respond think hear refer incorporate focus
1. The CEO thinks a joint venture is the best way to break into the Russian
market, but I don’t …….. with him.
2. Did you ……… about the alliance between Lufthansa and SIA?
3. If you ………. to the annual report it clearly sets out the facts.
4. What do you …… about the latest news on the proposed merger?
5. The Chairman had to ………. for misleading the shareholders at the AGM.
6. Combining two companies with good management teams, you automatically
…… up the strength of your management.
7. Good managers should …… on the people involved in company’s activity.
8. If you merge two companies, you have to think how to ……… people into
one company.
9. Good managers should ……… to all the changes taken place in business
environment.
2. Replace the words in italics with a verb from A and a preposition from B,
in the correct form.
A B
catch stand speak end get up(*2) on(*2) down ahead
go (*2) look by under
1. The company had hoped that the new sportswear designs would be a success
but in fact they never really became popular. ( caught on)
2. They finished by having to abandon the idea altogether.
3. Following the recent takeover of his company the chairman has announced
his intention to resign.
4. I’m afraid I can’t hear what you are saying. Could you talk louder please?
5. He’s new here, but he seems to be making progress.
6. Many businesses fail in their first year.
7. We need to think of the future and decide where we want to be in five years.
8. It’s a pity we let that opportunity pass; we need more orders like that.
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rely on, combine with, consist of, advise on, succeed in, budget for,
spend on, account for, compete with, invest in.
Dear Shareholder,
I write to inform you that the Board has received information of a takeover
bid for your company. This ……….. an attempt by Thor Engeneering to acquire
a controlling interest by offering to purchase shares at a price of 650 dollars. We
have brought in a team of consultants to ………… the tactics we should use to
resist the bid.
Although the offer seems attractive, it does not reflect the true value of the
company or take into account our future prospects. We have ……. a major
program of expansion. During the next two years we plan to …….. new plant
and equipment. We have also allocated funds to ………. a new computerized
stock control system which will allow us to …………… our much larger rivals.
Furthermore, we plan to ………… a machine tool company in a joint venture in
China. We are confident this will allow the company to ……… opening up new
markets in Asia.
Policies like these ……… our success to date and contribute to our vision
of the future. Therefore, we strongly advise you not to accept Thor
Engineering’s offer. You can ………. the Board to keep you fully informed of
any future developments, but for the present we advise you to take no action in
relation to the offer.
Yours Faithfully
Derek Hammond
Chairman
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Text 1. Read the following text about market research and fill the gaps
with the words given below
analyze annual concept data gather guesswork habits
inventory launch opinions packaging promotions respondents
significant statistics
We never develop and ……. a product solely on the basis of …….. . That’s
much too risky. You can’t just trust the intuition of senior managers or product
managers, you have to do market research or marketing research as they call it
in the States. We collect and …….. information about the size of a potential
market, about consumers’ tastes and ………. , their reactions to particular
product features, packaging features, and so on.
Lots of people think that market research just means going out and asking
consumers for their ……… of products, but that’s not true. Actually, talking to
consumers is a relatively minor market research tool, because it’s very
expensive. In fact, personal interviewing is the very last thing we’d do. We
usually find that our own accounts department, which keeps records of sales,
orders, ……….. size, and so on, is a far more important source of information.
Our sales representatives are another good source.
There are also a lot of printed sources of secondary …….. we can use, including
daily, weekly and monthly business newspapers, magazines and trade journals,
our competitors’ ……….. reports, official government ……… , and reports
published by private market research companies. We only engage in field work,
and ……… primary data from customers, middlemen, and so on, if both internal
research (analysis of data already available in the accounts and sales
departments) and secondary data ( available in printed sources) are inadequate.
If we do go out and do field work it’s usually a survey, which you can use to
collect information about product and ……… features, and to measure the
effectiveness of advertising copy, advertising media, sales …….. , distribution
channels, and so on.
Focus group are informative, but they’re usually too small for us to be sure that
the chosen sample of consumers is statistically valid. Questionnaire research,
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Text 2
Read and answer the questions
who were told to use “the pressure they use when caressing someone else’s
face”. This time few stains were found.
This case proves that marketers must rely on several kinds of market
intelligence, including ongoing intelligence about the firm’s external
environment, monitored information about how the brand is doing in the
marketplace, and specific information to answer particular questions that may
arise about how consumers perceive and use the brand, in order to make
effective decisions.
The first step of marketing research is defining the problem.
Sometimes marketers cannot determine exactly what the problem is because
they are focusing on symptoms, such as declining sales, and not on the
underlying problem that’s causing sales to drop. For example , a drop in sales of
a suntan lotion may be due to a new competitor, lack of cooperation from
distributors, or perhaps to a fashion trend that emphasizes the pale look over a
deep tan.
Defining the problem has three components:
* Specifying the research objectives: What questions will the research attempt
to answer?
* Identifying the consumer population of interest: What are the characteristics
of the consumers involved in the problem situation?
* Placing the problem in an environmental context: What factors in the firm’s
internal and external business environment might be influencing the
situation?
The research objective could revolve around any number of possible questions:
Is the firm’s advertising failing to reach the right consumers? Do the firm’s cars
have a particular feature (or lack of one) that is turning customers away? Is there
a problem with the firm’s reputation for providing quality service? Do
customers believe the price is right for the value they get? The particular
objective chosen depends on a variety of factors, such as the feedback the firm is
getting from its customers, the monitored information it receives from the
marketplace, and sometimes even the intuition of the people designing the
research. For example, Mercedes-Benz monitors drivers’ perceptions of its car,
and when the company started getting reports from its dealers that people were
viewing the cars as “arrogant and unapproachable”, even to the point at which
they were reluctant to sit in the models on display in the showroom, a research
project was undertaken to better understand the reason for this perception.
The research objective determines the consumer population that will be studied.
The research might focus on current owners to find out what they especially like
about the car. Or the research might study nonowners to understand their
lifestyles, what they look for in a luxury automobile, or their beliefs about the
company itself that keep them from choosing the cars. For example, research
conducted for Mercedes-Benz showed that although people rated its cars very
highly on engineering quality and status, many were too intimidated by the
51
elitist Mercedes image to consider buying one. Mercedes dealers reported that a
common question asked by visitors to showrooms was, “May I actually sit in the
car?” Based on this research, Mercedes took steps to soften its image by
changing the tone of its advertising to project a slightly more down-to-earth
impression.
Environmental conditions also provide a valuable perspective. Foe example,
when the economy is tight and sales of luxury cars are generally declining, the
population to be studied might be narrowed down to a select group of consumers
who are still willing and able to indulge in a luxury vehicle.
The second step in marketing research is determining the research techniques.
Research techniques can be different: interviews, focus groups, case studies and
ethnographies are exploratory research. They are used to generate insights for
the future, ideas for new strategies. Consumer interviews are one-on-one
discussion in which an individual share his or her thoughts in person with a
researcher.
The focus groups typically consist of five to nine recruited consumers who sit
together to discuss a product, ad, or some other marketing topic introduced and
led by a trained moderator.
Case study is a comprehensive examination of a particular firm or organization.
The goal is to identify the key decision makers, to learn what criteria they
emphasize when choosing among suppliers, and perhaps to learn something
about conflicts and rivalries among these decision makers that may influence
their choices.
An ethnography is a detailed report based on observations of people in their
own homes or communities and how people use the products bought. For
example, Warner-Lambert hired a firm to study how consumers actually use its
Fresh Burst Listerine mouthwash. The firm paid families who use Fresh burst
and families who use its competitor, Scope, to set up cameras in their bathrooms
so researchers watch how they used each product.
As we’ve seen marketers have many tools in their arsenal. There are interactive
surveys which can be made by mail or over the telephone. A short list of
questions is offered to the respondent. Face-to-face surveys, in which a live
interviewer asks questions of a respondent by going door-to-door, used to be a
common way to collect data. Nowadays on-line surveys are growing in
popularity as more and more consumers prefer answering questions about
products via computer. Passive observations can be personal or mechanical.
Personal observations are employed just to watch the consumers and
understand how they react to marketing activities. For example, “traffic
analysis” can pay off by pinpointing ”dead spots” in stores. After Frito-Lay
found that shoppers spend twice as much time in the coffee aisle as in the snack
food section, it began to advertise its chips near the coffee cans instead.
Mechanical observation relies on nonhuman devices to record behavior. For
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example, some grocery stores use infrared sensors in their ceilings to track the
movement of shopping carts.
Casual research helps to understand cause-and-effect relationships. In casual
research, marketers want to know if a change in something (for example, placing
cases of beer next to a diaper /nappy/ display) is responsible for a change in
something else (for example, a big increase in diaper sales).
The research tries to ensure that the data are valid and reliable and that responses
are representative of the target market. The final step is to implement the results
by integrating this feedback into long-term planning.
Testing can be carried out by giving the product free to trial consumers, or by
a “mini-test”, which involves placing it, for a fee, in a number of stores
selected by a market research agency, or by selecting particular towns or
regions as full test markets. If a lot of people try and then re-purchase a new
product, (3….) .
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If there is a high trial rate but a low re-purchase rate, (4…..). If only a few
people try the product, but many of these re-purchase it, (5…..) .
For durable industrial goods, the most common form of testing is to offer the
new product (6…..) . Alternatively, a firm can display the product at a trade
fair or in distributors’ or dealers’ showrooms, and study customers’ reactions.
Some ideas reach the product development stage, perform adequately in test
marketing, but then fail to be commercially successful; (7…...) . Enthusiasm
for a new product may cause executives to misinterpret market research data
which should have told them that (8…..) . On the other hand, even good new
products can be destroyed by poor promotions or (9…..) .
1. marketing environment
2. market demand for a product
3. marketing program
4. sales response function
5. market potential
6. company potential
7. market share
8. market forecast
9. sales forecast
10.sales quotas
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Exercise 3
Complete the text using the words given below
function, or a sales response function which forecasts the likely sales ……..
during a specific time period associated with different possible levels of a
marketing mix element. But of course market …….. depends on many factors
in the marketing environment that a company cannot control, such as the general
health of the national economy. Furthermore, the sales response function
assumes that other ………. , such as competitors’ prices, remain constant,
whatever the company spends on marketing. This is obviously untrue, and so
has to be compensated for in calculations.
b. Consequently, market tests are often carried out for new products, for
products whose buyers do not carefully plan their purchases or who are highly
erratic in fulfilling their intentions, or for products that are being sold in new
areas or by new distribution channels.
d. Even though consumers do not always have clear intentions, or carry out their
original intentions, and they are not always prepared to disclose them, buyer-
intention surveys are often quite accurate for major consumer durables and
industrial goods.
e. Forecasts based on what people say are made from surveys of buyer
intentions, conducted by personal, telephone or postal interviews of a
statistically selected sample of consumers.
g. If this is done badly it can result in excessive inventories and costly price cuts,
or, on the contrary, lost sales due to insufficient production.
h. Surveys are also the only possible forecasting technique for new products for
which past data does not exist.
i. There are various methods of forecasting, but they all depend on one of three
factors: what people say, what they do (which is not always the same), and what
they have done in the past.
k. Where a company does not have its own sales force, distributors can
sometimes provide equivalent information.
Read the following text and make a list of the different techniques that
companies can use for market research
1. Three years ago when Sam Morasca asked his wife what could be done to
exceed her expectations when buying gasoline, her answer ‘that I would never
have to think about it any more’ made him pause and think. The marketing
people from Shell Oil Products, of which Sam is vice-president, were
desperately seeking ways to increase the business, and to come up with a
strategy which would put them clearly ahead of their competition by
differentiating the Shell Oil brands in the eyes of consumers. “We are big
business for Shell Oil, contributing US $7 bn of revenue, and the leading retailer
of gasoline, but it is a fragmented market and the mission was to profitably
expand the business”, said Sam.
2. Today, after 18 months of cutting edge research, Shell Oil is on track to make
buying fuel at their 8,900 service stations clearly different with a new brand
initiative. Its aim is to deliver through facilities, systems upgrades, and new
operating practices, a hassle-free fueling experience targeted at specific
customer segments.
3. Over the past few years, the company has been developing detailed
knowledge of consumer needs and attitudes, which formed the basis for the new
brand initiative. Team leader Dave Yard, manager of Strategy and Planning –
Marketing, picks up the story. “We began with a customer segment study of
55,000 people, who we stopped in the shopping malls in six cities for a 45-
minute interview into their attitudes, especially regarding driving and cars. The
result was that everyone wanted three things from a service station: competitive
price, a nearby location and good quality fuel – something they all believed was
already being delivered by the industry.
4. This meant their buying decisions were influenced by other factors – some
wanted full-service outlets like the old days, some chose a service station
depending on whether it looked safe or not. ‘There were ten different segments
with different needs, and we wanted a better understanding of each of these
audiences.
5. A focus group was set up for each segment; an anthropological study was
carried out, which involved team members spending waking hours with people
from each segment, watching them at home and accompanying them on
shopping trips to see their buying habits; and a clinical psychologist was hired to
create a psychological profile of each segment.
6. The study indicated that three groups, which comprised 30% of the driving
public, should be targeted:
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7. “The common thread was that they all wanted a faster and easier service than
anything already available”, said Dave, “so the study ended and the launch
began”.
8. The field organization and Shell Oil retailers combined forces to determine
how to eliminate the little hassles that customers sometimes face, such as
improved equipment and clear instructions on the pump. The innovations are
currently being test marketed. A new advertising campaign was launched and a
sophisticated measurement system introduced to monitor satisfaction, behavior
and perception of the brand. ‘Fueling a car is a necessity of life and I believe we
are ahead of the game- but we won’t allow ourselves to stop and be caught up’.
hassle – problem
gasoline (US) – petrol (GB)
to differentiate – to show how products are different from each other
an upgrade – making something work better, and do more
to make a statement about s.b. – to show what kind of person s.b. is
to go out of one’s way – to make an effort
fueling up (US) – filling up (GB)
Read the text again and number the different stages in the research project in
the correct order.
a. They analyzed the results, which showed that there were 10 different
consumer segments.
b. Focus group studied the 10 segments.
c. Shell Oil’s marketing team decided to differentiate the Shell brand from the
other brands on the market.
d. Shell launched a new advertising campaign.
e. They interviewed 55,000 people about their attitudes to driving and cars in
general.
f. Work started on improving products and services.
g. They carried out a detailed study on the market over 18 months.
h. Three groups were chosen as the target markets.
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Vocabulary focus
1. Match the words from the text with their corresponding definitions
1. to exceed a. a part or section
2. a mission b. a group or interested people
3. an initiative c. an important new plan with a particular aim
4. a segment d. an assignment or task
5. an audience e. to find out / to discover
6. a profile f. to check at regular intervals
7. to determine g. to be more than
8. to monitor h. a description of characteristics of someone
or something
2. Find words and expressions in the text which correspond to the following
definitions.
1. Many different types of consumer who buy the same product (para 1)
f________ m________
2. The most advanced and up to date (para 2)
c______ e________
3. Conclusions people reach about which products to purchase (para 4)
b_________ d________
4. An informal discussion group used for market research (para 5)
f_______ g_______
5. A shared characteristic (para 7)
c________ t_______
6. A method of evaluation (para 8)
m_________ s_______
3. Complete the passage using words from Vocabulary 1 and 2. Change the
form of the words where necessary.
As more and more industries are making products specifically adapted to
particular 1.segments of the market, market researchers are being asked to
conduct studies and to compile more detailed 2.……….. of consumer groups.
Broad classifications based on sex, age and social class are not sufficient for
companies operating in highly competitive and 3.………. .……… .
Questionnaires are carefully designed to 4………. the exact needs and
demands of consumers as well as establishing what effects consumer
5………… ……….. when they choose one product instead of another.
Advertising campaign can then be targeted to appeal to the identified
6…………. . Finally, marketing people must 7……… the success of the
campaign and modify it if necessary.
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A B
up down over due drawn market staffed
under out worked priced paid dated
1. The invoice still hasn’t been paid. It’s now two weeks late. ( overdue)
2. Some of our customers are complaining that our products are too
expensive.
3. Our latest policy is to introduce more luxury products. This means that we
will phase out our less sophisticated brands.
4. During the Christmas period many employees will be on vacation and as a
result the company will be short of personnel.
5. The only catalogue I could find is from last year but I’m afraid that the
information in it is no longer valid.
6. For the last few weeks I’ve been staying late to get everything finished; I
really feel that I’ve been doing too much.
7. The database is two years old and needs to be changed to include the
latest information.
8. The workers claim that they are not earning enough.
9. My bank account has been in debit for the last two months.
Discussion
1. What are the advantages of the research made by Shell Oil over the more
conventional data collecting processes?
2. Would you agree to participate (as a potential consumer) in this type of
research? Why (not)?
3. Why do you think some people do accept?
1. The profiles below are based on the results of several hundred interviews
conducted in a shopping center by a major insurance company. Following the
survey, the company decided to concentrate its direct marketing sales efforts on
two specific products: a life insurance plan for young couples and a pension plan
for slightly older couples. Read the profiles and match the letter extracts below
to the profiles.
a. Our new policy is guaranteed to give you the best value for money currently
available. There is no red tape, just a simple application form which takes two
minutes to complete.
b. It’s still not too late to join the club and dream about the future. Just pick up
the phone and make an appointment and you can start saving straightaway. The
sooner you start the more you have to look forward to!
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e. Act now and enjoy later is our policy and it’s possible without giving up
luxuries in the meantime. Our policy adviser will take all the time you need to
draw up a plan specifically adapted to your financial situation.
f. They have no worries about whether they will be able to afford holidays,
presents for their grandchildren and all those little extras that make life easy and
comfortable in later years.
g. Just return the attached enquiry card. There’s no postage to pay and we will
send full details to your home address so you can read at your leisure.
Letter 1
Dear Parent
The arrival of a new baby is such an important time, it is almost impossible to
think about the practical side of being a parent ….. however, I know that you’ll
agree that nothing matters more than your baby’s future.
1c
We feel that now is the right time to tell you about a plan which has been
designed especially for young people like you. Interested? Read on.
2
So you see it really is your type of plan.
3
4
Don’t miss the opportunity to provide financial protection for your family at a
low cost. I look forward to receiving your enquiry card.
Yours faithfully
Letter 2
Dear John and Mary
Have you ever wondered how lucky you really are? Have you ever wondered
what the future has in store? Our policy holders are looking forward to the future
and planning how they will spend all the money they have saved.
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5
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So relax, the situation is under control.
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Looking forward to hearing from you very soon,
Sincerely ….
Marketing Practice
1. Your marketing research firm is planning to conduct surveys to gather
information for a number of clients. Your boss has asked you and a few
other new employees to do some preliminary work. He’s asked each of
you to choose three of the topics that will be included in the project and to
prepare an analysis of the advantages and disadvantages of mail surveys,
telephone surveys, face-to-face surveys, or observation for each.
a. The amount of alcoholic beverages consumed in a city
b. Young adults’ use of illegal drugs
c. Why a local bank has been losing clients
d. How heavily the company should invest in manufacturing and
marketing home fax machines
e. Reader recall of magazine advertisements
f. What local doctors would like to see changed in the hospitals in the
city
g. Consumers’ attitudes toward several sports celebrities
2. Marketing Mini-Project
The goal of the marketer is to satisfy needs, but in our modern, complex society
it is naive to assume that everyone’s needs are the same. Even a ‘weighty’
decision like what type of fast food to eat depends on many factors.
Evaluate the target market’s responses and modify the strategy: The target
marketing process is ongoing. Over time the firm may find that it needs to
change which segments it targets, and the needs of people in these chosen
segments may change as well. Marketers need to monitor these changes and
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Services often rely heavily on physical evidence, i.e. apparel (fine and special
clothes), facilities, graphics, and other visible signals of product quality, to
communicate a desired position. Such cues as the facility ( modern décor versus
traditional), distinctive colors, logos ( the lion of the Dreyfus Corporation versus
the bull of Merrill Lynch) all communicate the underlying characteristics of the
service organization.
Responsiveness: Some services emphasize the speed and care with which they
respond to customers’ requests. For example, print shops such as Kinko’s and
PIP promote their 24-hour service and their preservation of the client’s valuable
documents. Domino’s Pizza was known for its promise to deliver a pizza within
30 minutes.
Empathy: An organization that says that it understands its customers’ needs and
genuinely cares about their welfare often gains and edge on the competition.
Recall the long-standing motto of State Farm insurance: “Like a good neighbor,
State Farm is here”.
One of the most powerful ways to create physical evidence for a service is to
adopt a branding strategy. Service marketers such as McDonald’s, the tax
preparation firm H&R Block, the Carolina Panthers, and the Century 21 realty
company have essentially branded their services to create a unique identity for
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If there are several brands in the market, they are likely to position themselves
fairly evenly throughout the space and show real differences to match
differences in consumer preferences. If, on the other hand, several producers are
competing for the largest center segment, new entrants onto the market will
probably find that smaller segments with less competition are more profitable. In
fact, targeting a particular market segment is often the only realistic strategy for
firms with limited resources, although it can be risky, as the segment might get
smaller or even disappear, or be attacked by a larger competitor.
At the beginning of a product’s life cycle, companies often produce only one
version, and attempt to develop demand by undifferentiated marketing, before
switching to differentiated marketing in the product’s maturity stage.
Differentiated marketing involves developing several brands, each positioned in
a different segment. This obviously maximizes total sales, but equally increases
R&D, planning, market research, forecasting, production, promotion,
administration and inventory costs.
3. variable c. dividing
4. to position d. to aim at
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Use the following terms to complete the definitions below. Translate the
sentences.
brand product
product line product mix
line-stretching line-filling
product elimination convenience goods
shopping goods speciality goods
Branding
Read the text and select the appropriate expression to complete the text
shops, (4)……… leaving less room for competitors. (5)………. also gives them
a greater chance of getting some of the custom of brand-switchers.
(9)………… a name and a logo, many brands also have easily recognizable
packaging. Of course packaging should also be functional: (10)…….. , the
container or wrapper should protect the product inside, be informative,
convenient to open, inexpensive to produce, and ecological (preferably
biodegradable).
Match up the following words with the italicized words in the text:
additional goal production stoppages continual handling seeking
discontinuing phases unchanging expand present weaken
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Companies pursuing high market share and market growth generally have long
product lines. Companies whose objective is high profitability will have shorter
lines, including only profitable items. Yet most product lines tend to lengthen
over time, as companies produce variations on existing items, or add extra items
to cover further market segments. Established brands can be extended by
introducing new sizes, flavours, models, and so on.
There are, however, dangers with both line-filling and line-stretching. Adding
more items within the current range of a product line can lead to cannibalization
if consumers cannot perceive the difference between products, i.e. the new
product will just eat into the sales of existing products. Stretching a line to the
lower end of a market will generally dilute a company’s image for quality, and a
company at the bottom of a range may not be able to convince dealers and
customers that it can produce quality products for the high end.
Exercise 2
Without looking at the previous information, complete the sentences in the
sentences below. Translate the sentences into Russian.
3. Companies looking for high ………… generally have long product lines,
while companies seeking high …….. will have shorter lines.
4. Yet most product lines tend to ……… over time, as companies add extra
items to cover more …………. .
5. …………. can lead to ……… , if the items are too similar.
6. A product line can be ……… in two directions, both up-market and
down-market, although going down-market can damage a company’s
image for ………. .
7. Companies also occasionally ……….. their product lines.
8. Sometimes you can increase profits by …………. certain items.
9. Adding items to a product line results in a variety of ……….. ; for
example, you will need to carry more …………. .
10.On the contrary, producing fewer items generates …………. .
11.With fewer products you have longer ……….. with less ……….. caused
by changeovers.
12.But of course companies mustn’t abandon …………….. .
Exercise 3.
Match up the phrasal verbs on the left with the verbs that have a similar
meaning on the right
Exercise 4
Complete the text using the correct form of the phrasal verbs above
Most companies regularly (1) ……….. new items, stretching and filling their
product lines, (2)………… opportunities to increase sales and earn more profits.
But these additions are not always successful. Some items just don’t (3)……… ,
and are insufficiently profitable. So the company has to (4)………. regular cost
and sales analyses of the entire product line, taking account of opportunity costs,
and then (5)……….. poorly performing products. Obviously the brand managers
and the other people involved aren’t happy to see their products (6)……… , and
may consider that months or years of work are just being (7)……….. , but no
company can (8)………. profits. The same is true of products that were once
successful but are now no longer profitable: if sales have (9)…….. , a company
that is (10)………. will abandon them to (11)……. new items.
It’s quite often the case that about 20% of a firm’s products (12)……… most of
its sales, so there are lots of products that could be abandoned. Their managers
probably won’t (13)……. without a fight, but they have no choice but to
(14)…….. the financial imperatives. On the other hand, it is more difficult to
(15)……… ideas for new products than to (16)………. producing poorly selling
ones.
Exercise 5
Product Life Cycles
Sales
SALES
and
PROFITS
Profit
Read the text , and then decide whether the statements given below are True
or False.
The sales of most products change over time, in a recognizable pattern which
contains distinct periods or stages. The standard life cycle includes introduction,
growth, maturity and decline stages.
During the growth period, ‘early adopters’ join the ‘innovators’ who were
responsible for the first sales, so that sales rise quickly, producing profits. This
generally enables the producer to benefit from economies of scale. Competitors
will probably enter the market, usually making it necessary to reduce prices, but
the competition will increase the market’s awareness and speed up the adoption
process.
When the majority of potential buyers have tried or accepted a product, the
market is saturated, and the product reaches its maturity stage. Sales will
stabilize at the replacement purchase rate, or will only increase if the population
increases. The marketing manager has to turn consumers’ brand preference into
brand loyalty.
Most products available at any given time are in the maturity stage of the life
cycle. This stage may last many years, and contain many ups and downs due to
the use of a succession of marketing strategies and tactics. Product managers can
attempt to convert non-users, search for new markets and market segments to
enter, or try to stimulate increases usage by existing users. Alternatively they
can attempt to improve product quality and to add new features, sizes or models,
or simply to introduce periodic stylistic modifications. They can also modify the
other elements of the marketing mix, and cut prices, increase advertising,
undertake aggressive sales promotions, seek new distribution channels, and so
on, although here additional sales generally come at the cost of reduced profits.
A product enters the decline period when it begins to be replaced by new ones,
due to advances in technology, or to changes in fashions and tastes. When a
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product has clearly entered its decline stage, some manufacturers will abandon it
in order to invest their resources in more profitable or innovative products.
When some competitors choose to withdraw from a market, those who remain
will obviously gain a temporary increase in sales as customers switch to their
product.
Not all products have this typical life cycle. Some have an immediate rapid
growth rather than a slow introductory stage. Others never achieve the desired
sales, and go straight from introduction to maturity, although of course this
should have been discovered during test marketing before a full-scale launch.
Fads and gimmicks – for example, toys people buy once and once only to stick
on car windows- have distinct life cycles, both rising and declining very quickly.
Agree or disagree with the statements, speak on them, translate them into
Russian
1. The introduction stage of a new product is not usually profitable.
2. During the introduction stage, marketers are trying to create brand
preference.
3. A producer seeking maximum profits will apply a market –penetration
strategy.
4. The entry of competitors onto the market will make more consumers
aware of the product and stimulate them to try it.
5. At the maturity stage, producers begin to benefit from economies of scale.
6. The maturity stage is generally the longest.
7. Once the maturity stage is reached, marketers concentrate on finding new
customers.
8. A product enters the decline stage when it begins to become obsolete.
9. A product can experience temporary sales increases during the decline
stage.
10.Gimmicks and fads have a particularly long life cycle.
Time Sequences
The expressions below can be used to describe sequences of actions taking
place over extended periods of time.
At first….. Then………..
Initially….. Later…………
To start with……. Later on……….
Secondly, thirdly, etc……. Afterwards……..
Subsequently…….. Eventually…..
At this point of stage………. In time……
During this time……… Ultimately…….
Meanwhile……………
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Re-read the text on Product Life Cycles, and then choose expressions from the
list above to begin the following sentences.
The price of a product should logically cover its production and distribution
costs, including a proportion of the company’s fixed costs or (1)………. , such
as rent and interest payments, and leave a small profit. But prices are also
influenced by the level of demand, the prices of (2)…….. products, and the
prices charged by competitors.
High quality products made with expensive (3)……… and requiring a lot of
craftsmanship are obviously expensive. They also generally require “prestige
pricing” as the consumers in their (4)…….. market would not buy them if they
thought the price was too low. The market for most other goods are generally
price (5)………, i.e. the lower the price, the greater the sales.
But for new products for which there is a sufficiently high demand, companies
may choose to set the highest possible price so as to maximize profits. This is
known as market-skimming. The price can later be reduced in order to reach
further (6)…….. . The opposite strategy is market-penetration, which means
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But of course, all prices can be adapted. Most companies offer cash discounts to
customers who pay immediately, and quantity discounts to buyers of large
(12)………. . Many products and services are sold at a lower price during an
off-season. Retailers often offer some loss-leader prices: they cut the prices of
selected products to cost price or below in order to attract customers who also
buy other goods. Companies are also often obliged to react to price changes by
competitors. They might try to avoid a price war by modifying other elements of
the marketing mix. Similarly, they have to anticipate competitors’ reaction if
they change their own prices.
Many of the verbs and some nouns and adjectives commonly used to talk
about markets and marketing are, in fact, metaphors. For example, a product
can be launched – like a ship; or it can die – like a person.
Exercise 1.
This exercise gives the literal meanings of the following words. Can you
match them?
collapse prune target launch saturate flood skim dry up blitz
penetrate shrink push
1. ……… send a rocket into space or a new ship into water for the first time
2. ……… aim at something – when shooting at something
3. ……… remove something from the surface of something – cream from
milk
4. ……… go into something – a bullet into a body
5. ……… cover with water – when a river bursts its banks
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Exercise 2
Use the correct form of the words above, in the same order, to complete the
text below.
We (1)……. the product two years ago, after doing a lot of research and
testing. We were (2)……. young people, the 18s to 25s, but a lot of older
people bought it too. Since this was a new product, and we were the first
company to produce it in Britain, the finance people, as always, wanted to
charge a high price and (3)……. the market. But we argued with them and
finally got our way. We charged a low price hoping to (4)……. the market.
Unfortunately, it turned out that one of our competitors was also making the
same product in Taiwan, and soon the market was (5)…… with even cheaper
imports.
Exercise 4
Complete the paragraph with collocations from exercise 3.
A government spokesman yesterday insisted that the latest figures showed that
(1)……… was returning , and (2)……. was increasing. Several retailers
disagreed, and suggested that sales of (3)……. had only increased in January
because all the major stores had had extended Winter Sales and discounted
prices by up to 20%. The High Street banks say that the level of (4)…….
Remain low, with many people paying off earlier debts, and afraid to take on
new ones.
Speaking
C. A recent survey named the brands below as the world’s top ten.
Which do you think is number one? Rank the others in order.
Marlboro AT&T Ford General Electric Intel IBM
Microsoft
Coca-Cola McDonald’s Disney
Vocabulary
a. Look at the eight word partnerships with the word brand. Match them
with the definitions below.
luxury brand; classic brand; brand awareness; brand image;
brand stretching; brand loyalty; brand leader; brand manager.
c. Make four sentences of your own using the remaining word partnerships
b. Listen to the second part of the interview and complete the chart
Stand-alone or……….. brands Corporate or ……….. brands
… Ariel. ….Heinz..
……….. ………..
c. Listen to the last part and complete the summary below.
1. Customers want:
a. …………. b. ……………. C. …………….
Calvin Klein is tired from piracy, says Alice Rawsthorn, and has started a
global offensive against counterfeiters
Fashion victim fights back
Walk into a street market anywhere from Manila to Manchester, and someone
will be selling T-shirts branded with the distinctive CK logo of Calvin Klein, the
New York fashion designer.
If the price is very low, the T-shirts are probably fakes. Calvin Klein, like most
other internationally-known fashion designers, has, for a long time, had
problems with counterfeiters selling poor-quality merchandise bearing his brand
name. Now he is doing something about it. ‘As the Calvin Klein brand has
become well-known, we’ve seen a big increase in counterfeit activity’, says
Gabriella Forte, chief executive of Calvin Klein. “The better- known the brand
name, the more people want to rip it off”.
In the past Calvin Klein took a relatively passive approach to the counterfeit
problem. The company has now got tougher by establishing a network of
employees and external specialists to uncover copyright abuse.
The move began with a general change in corporate strategy whereby Calvin
Klein has aggressively expanded its interests outside North America. Calvin
Klein has been one of the leading fashion designers in the North American
market since the mid-1970s. Now Calvin Klein is building up its fashion
business in other countries. It has increased its investment in advertising, and
restructured its licensing arrangements by signing long-term deals with partners
for entire regions such as Europe or Asia, rather than giving licensing rights to
individual countries. But as sales and brand awareness have risen, Calvin Klein
has become an increasingly popular target for Asian and European
counterfeiters, alongside other luxury brands such as Gucci, Chanel and Ralph
Lauren.
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The fake goods, mostly T-shirts, jeans and baseball caps, not only reduce the
company’s own sales but damage its brand image by linking it to poor quality
merchandise. ‘You’d be amazed at how many people pay $5 for a T-shirt
without realizing it’s counterfeit’, said one executive.
From the Financial Times
Work in pairs.
Role play either the fashion designer or the general manager.
Fashion designer
You are a self-employed young fashion designer at the start of your career. A
large store is selling T-shirts which look exactly the same as some of your new
designs which you haven’t sold yet. You meet the general manager of the store
to make your complaint and ask for financial compensation.
General manager
You are going to meet a young designer who thinks you have stolen their
designs. It is quite common for the store’s design team to get ideas for products
from student fashion shows and art school exhibitions. Be sympathetic, but
admit nothing.
i. They can reach these consumers with their own door-to-door sales reps; by
direct mail (sending catalogues, leaflets, brochures, order forms, and so on by
post); by telephone selling; or by advertising and receiving orders via the
Internet.
j. Yet the demands of retailers and customers clearly also have to be balanced
against excessive inventory costs, as large inventories tie up capital and
increase the risk of spoilage or obsolescence.
1 –g 2- 3- 4- 5- 6- 7- 8- 9- 10 -
Vocabulary
Exercise 1 Add appropriate words from the text to these sentences.
1. We do …… marketing, by mail and telephone.
2. Last year we mailed our 160-page …….. to over 10 million homes.
3. Obviously most ……. goods are sold through retailers.
4. Producers of ……. goods often have a large network of sales agents.
5. It’s logical to store finished products close to your ……. customers.
6. This is a key element in choosing the ……. of a warehouse.
7. Both retailers and customers generally demand a short …… time.
8. The trouble with having a large ……… is that it immobilize a lot of
money.
Exercise 2
Down
1 2 1. I’m a …… (11). I stock and resell car
3 parts to half the garages in this city.
4
2. He’s an ……… (5) for three German
companies. He’s responsible for selling
their products in Britain.
5 3. (and 8 Down) I’m a …….. (5, 3) for a
clothing manufacturer. I’m part of a
6
team, but I have my own territory and
try to sell to customers in this district.
7. See 4 Across.
7 8
8. See 3 Down.
9
Across
1. She’s an art ……. (6) . She buys
paintings from artists and sells them
in her gallery.
4. (and 7 Down) We don’t use any intermediaries, but sell directly to the
…….. (3 –4).
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5. Look, I’m a ……. (8), and these are my prices. I can’t give you a
wholesale price, even if you buy my entire stock.
6. I’m an insurance ……. (6) . I advise customers where they can get the
best deal. In other words, I bring together sellers and customers, and the
seller pays me a commission.
9. This warehouse is owned by a big ……. (10) which stocks goods from lots
of suppliers, and distributes them to retailers when they place orders.
Read the text and translate it. Decide which of the three summaries on the
next page most fully and accurately expresses its main ideas.
the lobbying of politicians, and the creation of new stories, all designed to get
publicity for the company or a particular product. Unlike paid advertising,
publicity is any (favorable) mention of a company’s products that is not paid
for, in any medium received by a company’s customers or potential
customers. Companies often attempt to place information in news media to
draw attention to a product or service. Quite apart from financial
considerations, the advantage of publicity is that it is generally more likely to
be read and believed than advertising. It can have a great impact on public
awareness that could not even be achieved by a massive amount of
advertising.
Within the limits of their budget, marketers have to find the optimal
communications mix of advertising, sales promotion, personal selling, and
publicity, without neglecting the other elements of the marketing mix, i.e. the
possibility of improving the product, lowering its price, or distributing it
differently.
First summary
Marketing involves making a good, cheap product and convincing customers
to buy it by way of a good communications mix. For consumer goods, this is
generally done with advertising and sales promotions. For specialized
industrial goods, this is done by personal selling. Publicity, such as
favourable mentions of a company products in news media, is also useful.
Second summary
Marketing involves four basic elements: advertising, sales promotion, public
relations, and personal selling. The first three of these are used for consumer
goods, the last for industrial goods. These tools, along with product
improvement, price reductions, and distribution channel innovations, make
up the communications mix.
Third summary
Marketing involves producing the right product, pricing it attractively,
making it available to potential customers, and promoting it. With consumer
goods, this largely involves advertising and sales promotions. For industrial
goods, personal selling is often more important. Publicity is also a useful tool
as it is cheaper and generally more credible than advertising. Marketers have
to combine these tools to create the best possible communications mix.
1. to satisfy a. an impact
2. to develop b. attention
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3. to inform c. consumers
4. to build up d. needs
5. to lobby e. politicians
6. to draw f. products
7. to believe g. publicity
8. to have h. relationships
Read the three case studies below. Then discuss the questions that follow each
one.
Case 1. McDonald’s
The famous fast food company, McDonald’s, launched campaign 55 to help it
compete against rivals like Burger King and Wendy’s. They had a six-week
promotion costing $320 million. McDonald’s offered a Big Mac (a type of
hamburger) for 55 cents instead of $1.90. When customers were at the cash
register, they found that they had to buy French fries and a drink at the full price
to get the cheap burger.
Case 2. Pepsi
The Pepsi Cola company had the idea of offering a Harrier jump jet (an air liner)
as a ‘joke’ promotion. The advertisement was first shown in the Seattle area in
the US. It showed a teenager modelling some merchandise available as part of
the Pepsi Stuff promotion. At the end, a Harrier jet landed outside the school and
the boy came out of the cockpit saying, “It sure beats taking the bus to school”.
The promotion rules allowed customers to save up Pepsi Stuff points by
collecting labels from Pepsi drinks or buying them directly for 10 cents each.
The advert stated- jokingly- that 7million points were needed for someone to
claim the jet. A business student, John Leonard, intends to take Pepsi Cola to
court regarding the promotion because he thinks they should give him the prize.
1. What prize do you think John Leonard is claiming from Pepsi Cola?
2. What did he do to claim the prize?
3. Why do you think Pepsi Cola have described his claim as frivolous (not
serious)?
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1. Why do you think the Irish people disliked the logo so much?
2. Was the Minister right to get rid of the logo?
3. Which logo do you prefer?
Questionnaire
1. What is the name of your client’s company?
3. Who are their target customers ( age, social class, etc.)?
4. Do they specialize in any particular type of book?
5. Do they sell any other products?
6. Do they offer discounts or other special services?
7. What is their brand image?
8. What is their share of the market?
9. Who is their main competitor?
10.Where are their shops located (city centers, suburbs, train stations and
airports, etc.)?
b. Recently sales have fallen. Hold a meeting to discuss the possible reasons.
Make suggestions to improve your client’s sales and its brand awareness
amongst its target consumers. Use phrases from the useful language box.
Useful language
Background
Caferoma, a well-known brand of coffee, is owned by the Pan European Food
and Drink Company (PEFD), based in Turin, Italy. It is promoted as an
exclusive ground coffee for gourmets. Its image is that of an Italian-style coffee.
It has a strong full-bodied flavour and a slightly bitter taste. It costs more per
100 grams than almost every other ground coffee product on the supermarket
shelves.
Problems
In the last two years, Caferoma’s share of the European quality ground coffee
market has declined by almost 25%. There are several reasons for this:
Brand loyalty: Consumers have become less loyal to brands and are more
willing to trade down to lower-priced coffee products.
Price: Supermarkets have been producing, under their own label, similar
products to Caferoma at much lower prices.
‘Copycat’ products: Competing brands of Italian-style ground coffee at prices
30% to 40% lower than Caferoma’s price have cut into Caferoma’s market
share.
Brand image: Consumer surveys show that the Caferoma brand no longer
conveys a feeling of excitement and enthusiasm, and that it does not give the
impression of being up-to-date and contemporary.
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Task
You are members of PEFD’s European marketing team. Hold an informal
meeting to discuss Caferoma’s problems. Decide what actions are necessary to
halt the decline in the product’s market share and to increase profits.
Possible solutions
Repositioning the product Change Caferoma’s image to appeal to a different
market segment. (Which segment, and what changes should they make to taste,
quality, packaging, logo, labeling, etc?)
Pricing Reduce the price by, say, 20% to 30% to make it more competitive.
Advertising Devise a new advertising campaign. (The new message, kind of
campaign, and any special promotions need to be considered)
Multiple brands Sell Caferoma, with minor product changes, under different
brand names at lower prices.
Own label products Sell Caferoma coffee for supermarkets to package and sell
under their own labels (but continue to market the Caferoma brand at the same
time).
A new product Bring out an instant coffee or decaffeinated product under the
Caferoma brand.
Stretching the brand Allow selected manufacturers of coffee equipment
(cafetieres, percolators, coffee machines, etc ) to use the brand on their goods –
for a licensing fee, of course.
Personal selling
Complete the text using these words
What do I do? I’m a salesman. Well, actually, because there are several women
in our sales force, I guess I should say I’m a salesperson or a sales
representative, or a sales rep for short. My job is to contact existing and
prospective (1)……… . Some salespeople are based in companies’ offices, but
I’ve always worked “in the field”, traveling and visiting customers.
You know, sales reps are often the only person from a company that customers
ever see, so we are an extremely important (2)…….. of information. Someone
calculated a long time ago that the majority of new product ideas come from
customers, via sales reps. So our tasks include prospecting for customers,
(3)……. information to them about our company’s products and services,
selling these products and services, helping the customers with possible
technical problems, and (4)………… market research information. Since we
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The trouble with personal selling is that it’s the most expensive element in the
marketing mix, so most firms only use it sparingly, often as a complement to
(6)………… . Sales reps like me are more often necessary for (7)……… deals
than for providing initial information.
But these days we think about more than making a single deal. I mean, head
office keep reminding us of “the marketing concept”, and telling us not to think
about making short-term sales but about solving customers’ problems, bringing
back information, achieving long-term sales, and (8)……… profits. We have to
know all about the company and its products, about the customers, and about
(9)…….. . Of course, we also have to know how to give an effective sales
presentation!
Like most salesmen, I receive a fixed (11)……. plus commission on the quantity
I sell. I’m also set a quarterly sales (12).……. that I’m expected to meet , as part
of the company’s annual marketing plan.
Exercise 1.
Complete the following collocations:
1. prospective……… 6. to solve a ………….
2. a channel of …….. 7. to achieve long-term ….
3. new product……… 8. to give a sales …………
4. to recognize customers’…….. 9. to cultivate personal…….
5. to close a …………. 10. to meet a sales…….
Exercise 3
Match up the following collocations:
Exercise 4
Insert the ten terms from Exercise 1 in the gaps in the text below. You may
need the plural.
Apart from attracting new users, price cuts in supermarkets can be used to
counter a promotion by a competitor, or to sell excessive inventories, while the
company reduces production. Retailers, rather than manufacturers, also often
regularly reduce the prices of specific items as (6)………. which bring
customers into the shop where they will also buy other goods. Manufacturers’
sales promotions are generally temporary, lasting the average length of the
(7)……. , because a product on offer too often appears to be cheap and therefore
of low quality, which can seriously damage its (8)……… .
Sales promotions can also be used to encourage distributors and dealers to stock
new items or larger volumes, or to encourage off-season buying. Companies can
aim promotions at their own sales force, encouraging them to sell a new product
or model, or to increase their activities in selling an existing one.
Exercise 5
Now complete the following sentences about your own shopping habits:
Exercise 1. Read the text. Select the correct alternatives to complete the text.
Translate it.
Advertising informs consumers about the existence and benefits of products and
services, and attempts to persuade them to buy them. The base form of
advertising is free (1)………... advertising, which occurs when satisfied
customers recommend products or services to their friends, but very few
companies rely on this alone.
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Large companies could easily set up their own advertising departments, but they
tend to hire the services of a/an (2)……… . A contract to produce the
advertisements for a specific company, product or service is known as a/an
(3)……. . The client company generally decides on its advertising (4)……. , the
amount of money it plans to spend in developing its advertising and buying
media time or space. It also provides a (5)………. , or a statement of the
objectives of the advertising, as well as an overall advertising strategy
concerning what (6)……… is to be communicated. The choice of how and
where to advertise (newspapers and magazine ads, radio and television
commercials, cinema ads, posters on hoardings (GB) or billboards (US), point-
of-purchase displays in stores, mailings of leaflets, brochures or booklets, and so
on), and in what proportions, is called a (7)……. . The set of customers whose
needs a company plans to satisfy, and therefore to expose to an advertisement
are known as the (8)………. market. The advertising of a particular product or
service during a particular period of time is called an advertising (9)……….. .
Exercise 4
Many advertisements contain a slogan or short phrase to attract the
consumers’ attention. Effective slogans are usually short, easy to remember,
easy to repeat and easy to translate for international markets
1. Read the text about translations of slogans and brand names, and note
the problem in each case.
a. In Taiwan, the translation of the Pepsi slogan ‘Come alive with the
Pepsi generation’ came out as ‘Pepsi will bring your ancestors back
from the dead’
b. When Parker marketed a pen in Mexico, its ads were supposed to say
‘It won’t leak in your pocket and embarrass you.’ However the
company translated ‘embarrass’ as ‘embarazar’, which means ‘to
become pregnant’. So the ads said ‘it won’t leak in your pocket and
make you pregnant.’
c. In Italy , a campaign for Schweppes Tonic Water translated the name
as Schweppes Toilet Water.
d. Colgate introduced a toothpaste in France called Cue, the name of a
French pornographic magazine.
e. When Braniff Airlines translated a slogan for its comfortable seats, ‘fly
in leather’ it came out in Spanish as ‘fly naked’.
In groups, write down five popular slogans in your language. Try to translate
them into English. Read them out to the other groups and see if they can
guess which products your translated slogans refer to.
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B. Do you think that the advertising practices described below are acceptable?
Are there any other types of advertisement that you find offensive?
Read the text about controversial advertising. Do you think the VW campaign
was successful? Discuss whether the company was right to launch such a
controversial campaign?
carmaker’s model was likened to a religious revelation; one that showed Jesus at
the last supper recommending the car to his disciples.
VW’s agency DDB Needham doubtless thought its advertising was ironic and
extremely up-to-date. After all, the admen presumably figured, if outrageous
advertising worked for the likes of Benetton, it could work to revive the image
of the Golf, which is frankly rather old-fashioned.
After the Catholic Church threatened to sue for Ffr 3.3m ($550,000) to obtain
reparation for the damage suffered by Christians, the agency and the carmaker
confessed to their sins and agreed to remove the ads. ‘We have no disrespect for
the fundamental values of society nor for the beliefs of the faithful’, said a
spokesperson for DDB Needham. ‘We decided to retract the posters
immediately in order to show our respect for the faith and the feelings expressed
by certain believers.’ The agency’s penance has included making a substantial
donation to a Catholic charity.
The ad agency, however, may well have done. The VW campaign might look
like a marketing disaster, but increasingly ad agencies are selling to clients not
simply their ability to write ads but their ability to write ads that generate PR.
Some clients ask all agencies pitching for their business to demonstrate their
ability to garner extra publicity.
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As this generation grows up, the argument goes, they will continue to be more
broad-minded than their parents and will see the shattering of taboos as the
norm. So outrageous advertising will no longer be limited to those products
which target youth.
Perhaps Volkswagen was just ahead of its time, advertising to a market that
wasn’t broad-minded enough in a country that still gets nervous when Church
and State are challenged. Or perhaps VW’s collision with Catholics shows that
for all their claimed acumen, ad agencies are less in touch with the public mood
than they claim.
/The European/
outrageous – very shocking
disciple – a follower of any great teacher (esp. of a religious teacher)
to revive – to recover – to become healthy again
reparation – repayment for loss or wrong
to retract – to withdraw
to sue – to claim money because you have been harmed
penance – suffering to show you are sorry
to take smth at face value – to accept smth without thinking
inception – the beginning
to garner – to collect
a counterpart – a similar person in a different place
collision - disagreement
acumen – the ability to make good judgment
to be in touch with – to understand
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Read the text in more detail and choose the best answer
Vocabulary
1. Find words or expressions in the text which correspond to the following
definitions.
1. a public space reserved for advertisers to put their ads on (para 1)
b…………
2. large pictures or notices put up in a public place to advertise something
(para 1) p………..
3. human interest subjects (para 5)
s…………
4. people or companies who pay for a professional service (para 6)
c………………..
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2. RXV, a major electronics company, has decided to advertise its latest digital
camera. It has asked several advertising agencies to submit proposals for a
campaign. An executive at one of these agencies has made a list of tasks to be
completed before submitting its proposal to RXV.
Complete the executive’s list using words from Key vocabulary and
Vocabulary.
1. Change the form of the words where necessary.
2. Complete the sentences using the correct form of the expressions with
like.
1. TV advertising is too expensive for small computer software
companies, only ………….. IBM can afford it.
2. Aggressive bosses are sometimes …………. great apes by the
media.
3. Advertising for products …………. alcohol is banned in some
countries.
4. The new perfume bottle is designed to ………… a sculpture.
1. Newspapers and TV are two advertising media. Can you think of others?
2.Complete the table with the words in the box. Can you think of other words?
Use a good dictionary to help you.
Advertising
Outdoor advertising’s appeal is growing as TV and print are losing theirs. The
soaring costs of TV are prompting clients to consider alternatives. Dennis
Sullivan, boss of Portland Group, a media buyer, calls outdoor advertising the
last true mass-market medium. It is also cheap. In Britain, a 30-second prime-
time TV slot costs over 60,000 pounds ($100,000); placing an ad on a bus
shelter for two weeks out at about 90 pounds.
Adding to its attractions has been a revolution in the quality of outdoor displays.
Famous architects such as Britain’s Sir Norman Foster are designing arty bus
shelters and kiosks with backlit displays. Backlighting, introduced in Europe by
Decaux and More, and plastic poster skins have vastly improved colour and
contrast.
This sort of innovation has attracted a new class of advertiser. Recent data from
Concord, a poster buyer, shows that in Britain, alcohol and tobacco have been
replaced by entertainment, clothing and financial services as the big outdoor
advertisers, like car makers, are using it in new ways. BMW ran a ‘teasers’
campaign in Britain exclusively on bus shelters.
Choose one of the advertising media below. Make a short presentation on its
advantages and disadvantages.
television billboards newspapers street furniture
Andrew Pound, a marketing manager for Kraft Jacobs Suchard, talks about
successful advertising. Before you listen, answer these questions.
4.2 Listen to the first part of the interview. Check your answers.
Answer the questions.
1. Who was the target consumer in each campaign?
2. What advertising media did Andrew use in each campaign?
4.3 In the second part of the interview Andrew explains why advertising is not
a waste of money. What reasons do you think he will give? Do you agree with
Andrew?
Match words from each box to form word partnerships. Then make a sentence
for each word partnership.
advertising techniques
marketing promotions
public outlets
retail campaign
price relations
promotional mix
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Nearly two billion people in the world have no electricity; 70% of them have
difficulty obtaining clean drinking water. Many live in widely scattered and
remote rural communities, with little hope of connection to national electricity
grids. Their need is not simply for electricity, but for stand alone power systems
that are long-lasting, reliable and simple to maintain. Above all, they need a
constant and cheap source of fuel, like the sun.
BP Solarex has over twenty-five years experience working in remote areas, not
only in developing countries but also in the developed world. This experience
has allowed us to build an unrivalled understanding of local needs. We have put
that experience to good use, to build a range of packaged products designed to
enhance living standards anywhere grid-connected electricity is unavailable.
Read the advertisement again and identify which form of the article is used
with each of the nouns below. Can you explain why?
Complete the following passage about the mineral water company Perrier,
putting in the correct form of the article where necessary.
In February 1990, Perrier, one of ……. most famous mineral water companies,
faced ……. serious image problem when small quantities of benzene were found
in some bottles.
……… company decided to take 160 million bottles, worth $70m, off the
market.
…….. spokesperson from ……. communications department made …..
statement to the press saying that this did not present ……. health problem but
he did admit that for …… product known for purity, it was definitely …..
mistake.
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Complete the following passage using a gerund or infinitive. Use the verbs
given below
A. build put make set up bring transform
B. decide appear reflect create
C. return expand drink change launch
C. After (11)……… Diet Coke in 1982, the company saw its sales grow
quickly. The drink is now the third most popular in the world. In 1985, the
company tried (12)……….. the secret formula of Coca-Cola, but realized that
Americans were very attached to the original recipe. The company listened to its
consumers and quickly responded by (13)…………. the original formula to the
market as ‘Coca-Cola Classic’. Today, people in more than 160 countries
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around the globe enjoy (14)……….. Coca-Cola. It is asked for more than 524
million times a day in more than 80 languages. The company intends
(15)………. its global presence even further in the twenty-first century,
particularly in developing markets.
Inviting questions
* If you have any questions, please don’t hesitate to interrupt me.
* If you are not clear about anything, go ahead and ask any questions you want.
Listening
4.4 Listen to the opening of one formal presentation and one informal
presentation. Check your answers to Exercise A.
Presenters can use different techniques to get their audience’s attention at the
start of the presentation. Match the techniques below to the examples.
1. I wonder if any of you here know the answer to this question: what’s the
most popular holiday destination in Europe for people under the age of
25?
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2. When I was on holiday a few years ago in Greece, the owner of a taverna
told me that in 20 years’ time, the little village where he lived would be a
popular tourist resort.
3. Let me give you a statistic: 92% of Americans do not own a passport.
Consider the opportunity this presents to the travel industry.
4. We’re facing a crisis with our market share. What are we going to do
about it?
Focus Advertising
Background
Focus, a large advertising agency based in Paris, has a reputation for creating
imaginative and effective campaigns. Recently however, Focus’s reputation was
damaged when two major clients changed to rival agencies. Focus now needs to
convince potential clients that it still has plenty of creative ideas to offer.
At present, Focus is competing against some well-known agencies for several
contracts. It has been asked to present ideas for advertising campaigns to the
managements of the companies concerned. Concepts are required for the
following advertising campaigns:
A sports car A high-priced, hand-finished model with a classic design. The car
was popular in the 1950s and 60s. An American firm now wants to re-launch it.
(Target consumers will be high-income executives with a sense of fun and
style.)
Aim: An international campaign, with advertising adapted to local markets.
A major bank The bank (in an English-speaking country) wants to advertise the
following new services:
1. Competitive low-interest mortgages
2. Direct telephone banking
3. A foreign travel service
It has also asked your agency to suggest others.
Aim: Develop loyalty among existing customers and attract new ones.
Task
You are members of advertising team at Focus. Prepare an advertising campaign
for one of the products or services. Use the Key questions below to help you.
Then present your campaign to the management of the company concerned. (At
this stage, you have not been asked to prepare a budget).
When you are not presenting your campaign, play the role of the company’s
management. Listen and ask questions. Use the Assessment sheet below to
choose: a. the best campaign concept
b. the most effective presentation.
Total: 30 Total: 30
Reading
Read the following article and choose the best sentence (A-J) from the list
below to complete each gap.
Would you call your friends if it meant hearing ads every three minutes –
er, make that free minutes?
You pick up the telephone, dial the number and before it rings a cheerful voice
says, “Hello! This call is sponsored by…..”
1… . We’ve come to tolerate (maybe) TV ads that cut into movies just at the
dramatic moment, or intrude on soccer matches right when a crucial play begins.
In American football, referees even halt play for commercials. But how many
people would be willing to have a phone call repeatedly interrupted for a “brief
word from our sponsor”?
Answer: plenty.
That’s the verdict from Sweden, where an outfit called Gratistelefone is offering
free, advertising-supported calls in a two-month trial. Lines are overloaded.
2….. . They are not it seems.
A caller dials a toll-free number, then dials any other number in Sweden. 3….. .
There’s no charge for as long as the caller – or the person called – wants to talk,
or is willing to have conversation punctuated by chirpy jingles.
4……. . But giveaways know no age barrier, says Broden. “We were a bit
amazed, But we are getting lots of middle-aged and older people. For them it’s
no bother”. He wouldn’t confirm published reports that the system is getting
30,000 callers a day, but did say it is so popular that on some evenings the
circuits are jammed.
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And what’s in it for advertisers in this brave new medium. 5….. . “Because the
ad is only 10 seconds long and your friend is waiting on the line, you can’t
really go to the bathroom,” says Broden. “It’s very cost – efficient”. A handful
of organizations, including a movie theatre chain, a radio station, a snacks
company and a charity, are already running ads, which cost about 13 cents per
spot, and dozens more have expressed interest.
Gratistelefone has bigger, not to mention Big Brother-like plans. 6….. . Then,
different callers might hear different ads, tailored to the advertisers’ needs.
There’s even the technology to play separate ads to each person on the line – the
caller from the rural north might hear a pickup truck pitch, while the recipient in
Stolkholm could listen to one for a local restaurant. The company plans to
extend the service nationwide in Sweden in the next few months, and it has been
deluged by inquiries from other countries. If the (READ TIME!) idea catches on
and (READ TIME!) consumers elsewhere prove tolerant (READ TIME!) of
such interruptions, who knows where it may lead?
By Jay Branegan / Time./
freephone (Br.) cinema (Br)
toll-free (Am.) movie theatre (Am.)
CONTENTS
SOURCES