PRODUCT DEVELOPMENT AND PLANNING

(Розвиток виробництва і планування)

The number of new products coming into the market of western countries every year is overwhelming. A lot of these products are not new, but adaptations. It means that these products are not new, they are existing items to which a modification has been made. Only few products are really original or innovations. For instance a clock-television is an adaptation, but TV-set itself, the refrigerator – each was an innovation. A great number of innovations and adaptations are designed, produced and marketed by small businesses. Very often a new product is formed on the basis of new business. Sometimes there is a patent to make the business more successful. But it happens very often that market research hasn’t been done carefully.

Even in case larger scale producers do more research and testing there is no sure success. A promising new product may be also robbed of success by unreasonable prices, inadequate promotion and poor selling methods. Generally, less than one fifth of all new products.

ACTIVE VOCABULARY

product development розвиток виробництва

adaptation щось перероблене, пристосоване

modification модифікація, видозміна

innovation нововведення, новинка

patent патент

large scale producer великий виробник

promising product перспективний продукт

unreasonable price нерозумна ціна

inadequate недостатній, не відповідаючий вимогам

Exercise 1. Answer the following questions.

1. How can you explain the term adaptation?

2. What is an innovation?

3. Give your own examples of innovations and adaptations.

4. Why are many innovations and adaptations manufactured and marketed by small businesses?

5. Why is it so important to obtain a patent?

6. Why does the failure of a new product take place?

Exercise 2. Choose the necessary word and put it in the sentence (adaptation, innovation, inadequate, patent, failure, success, unreasonable).

1. Though market research tries to predict the trends, there is no sure ...

2. This product isn’t original, it is an ...

3. ... office receives applications from many young inventors.

4. If the price ... , the product won’t be sold out.

5. A clock-television is an adaptation but the television itself is an ...

6. If a sure ... is stopped, money and time can be saved.

7. They failed because of ... promotion camping.

Exercise 3. Translate the following sentences into English.

1. Цей продукт – модифікація старого. 2. Дрібні виробники виготовляють велику кількість товарів. 3. Вам необхідно отримати патент на виробництво даного продукту. 4. Досконале дослідження ринку необхідне для гарантії успіху. 5. Знадобиться п’ять років для того, щоб ваш продукт отримав визнання. 6. Вимикаючий пристрій з таймером – саме те, що привабить покупців. 7. Треба закінчити всі дослідження до того, як ми почнемо продавати наш продукт. 8. Нам необхідно розширити лінію.

TEXT 5

RETAILING

(Роздрібний продаж)

Retailing is selling goods and services to the ultimate consumer. Thus, the retailer is the most expensive link in the chain of distribution. Being middlemen, they make their profit by charging the customer 25 to 100 per cent more than the price they paid for the item.

The retailers operate through stores, mail-order houses, vending machine operators. There are different types of retail stores: department stores, discount houses, cooperatives, single line retailers. The major part (over 95 per cent) of retail establishments concentrate on a single line of merchandise for example, food hardware, etc. But nowadays there is a trend for many single line stores to take on greater variety of supplies.

The retailer performs many necessary functions. First, he may provide a convenient location. Second, he often guarantees and services the mechandise he sells. Third, the retailer helps to promote the product through displays, advertising or seles people. Fourth, the retailer can finance the customer by extending credit. Also the retailer stores the goods in his outlet by having goods available.

ACTIVE VOCABULARY

retailing роздрібний продаж

ultimate consumer кінцевий споживач

link зв’язок

mail-order house поштовий продаж

vending machine operator оператор автоматичних торгівельних

машин (продажа дрібних товарів: газети, сигарети і т. д.)

discount house магазин з відносно низькими цінами

на товари

cooperative кооператив

single line retailer роздрібний продавець, який продає

будь-який один товар

to perform functions виконувати функції

extending credit довгостроковий кредит

outlet ринок збуту, торгове місце

discount знижка

Exercise 1. Answer the following questions.

1. What is retailing?

2. What are four different types of retail stores?

3. What are at least two types of retailing that do not include the use of a store?

4. In what way does a retailer serve a customer?

5. In what way does a retailer serve a manufacturer?

6. Which per cent of the price of the goods sold goes to the retailer?

7. What is the trend with a single line retailer now?

Exercise 2. Put the necessary word in the sentence (mail-order, discount, vending machine, guarantees, retailer, extending credit, link).

1. ... is one function a retailer may perform.

2. You can buy newspapers, cigarettes, cookies from a ...

3. ... is the most expensive link in the chain between a producer and a consumer.

4. The firm ... good quality of the product.

5. She doesn’t like to go shopping, she prefers to do it by ...

6. The department store is having a sale and there is a 20 per cent ... on all light dresses.

7. Wholesaler is an important ... between a producer and customer.

Exercise 3. Translate the following sentences into English.

1. Роздрібна торгівля – це продаж товару кінцевому споживачу. 2. У західних країнах є різні типи торговельних установ: універмаги, супермаркети, магазини з низькими цінами і т.д. 3. На цей товар можна одержати 10% скидку. 4. Роздрібна торгівля може надати покупцю тривалий кредит. 5. Ця фірма має численні торгові точки по всій країні. 6. Роздрібний торговець виконує багато різних функцій. 7. Я не знаю центр міста, мені необхідний довідник магазинів. 8. У торгівельному центрі ви знайдете всі необхідні вам товари. 9. У цьому магазині немає бакалійного відділу.

TEXT 6

PRICING

(Ціноутворення)

All products and all service have prices. The price depends on different things such as credit terms, delivery, trade in allowance, guarantees, quality and other forms of service, which price can produce the biggest profit during a long period of time. The price may be too high to produce a large volume or too low to cover costs. No other area of marketing operations has been a subject to bad practice. Many businesses pursue unsound price policies for long periods of time and are not aware about it.

Prices can be determined in different ways. For example, the prices on meat, cotton and other agricultural products can be decided in a large central market where forces of supply and demand exist. This is pure price competition. The prices on industrial products (iron, steel, etc.) are usually decided by large companies. As a rule the amount and price of goods sold to large number of buyers are controlled by a few competing sellers. Prices also can be set by the government, usually for different public service – railroads, electricity, manufactured gas, bus services, etc.

If demand increases, prices rise, profits expand and new investment is attracted. But other factors may be involved as well. Prices are related to each other in different ways. Ultimately, everything is related by price, since the consumer can buy and must pay for everything out of a particular, limited amount of money.

ACTIVE VOCABULARY

credit terms кредитні умови

trade-in allowance сума грошей, виплачена за стару річ і

включена в рахунок нової покупки

to cover costs покривати витрати

to pursue unsound price вести нерозумну ціноутворюючу політику

supply and demand пропозиція та попит

price competition конкуренція в ціноутворенні

to set prices становлення ціни

Exercise 1. Answer the following questions.

1. Why is it difficult to determine the right price?

2. Why is the seller interested in the price that produces the highest volume of sales at the lowest unit of cost?

3. Why do many businesses follow unsound pricing policies?

4. How are industrial products usually priced?

5. In what way are agricultural prices decided?

6. Why does the government usually set the prices for public utility services?

7. Why is so important to know the levels and demand when dealing with pricing?

8. Why is everything related by the price?

Exercise 2. Put the necessary word in the sentence (supply and demand, volume of sales, trade-in allowance, complete, price policies, credit terms, to set prices).

1. It is very difficult ... without sound price policy.

2. Of course we are interested in producing the ... with the lowest
unit costs.

3. I decided to buy a new car at this company because they offered
the best ... on my old model.

4. The ... of this store are very beneficial for a customer.

5. Their business will fail if they pursue unsound ...

6. The government usually ... for public utility services.

7. In pure competition the forces of ... operate.

Exercise 3. Translate the following sentences into English.

1. Ця крамниця надає покупцю вигідні кредитні умови. 2. Товар має низьку ціну. Вона покриє витрати. 3. Ця фірма проводить нерозумну ціноутворюючу політіку. 4. Перед тим, як випускати товар, необхідно ретельно вивчити запит і пропозицію. 5. Держава встановлює ціни на ряд продуктів. 6. Крамниця має чудове місцезнаходження. 7. Супермаркет надає покупцю багато додаткових послуг: доставку товарів додому, кредит, установку і т.д. 8. Нова марка безумовно привабить покупців. 9. Починайте з низької ціни. 10. Продаж за рахунок низької ціни діє при продажу товарів народного споживання.

TEXT 7

WHOLESALING

(Оптова торгівля)

Wholesaling is a part of marketing system. It provides channels of distribution which help to bring goods to the market. Generally, indirect channels are used to market manufactured consumer goods.

It could be from the manufacturer to the wholesaler, from the retailer to the consumer or through more complicated channels. A direct channel moves goods from the manufacturer or producer to the consumer.

Wholesaling is often a field of small business, but there is a growing chain movement in the western countries. About quarter of wholesaling units account for the one-third of total sales.

Two-third of the wholesaling middlemen are merchant wholesalers who take title to the goods they deal in. There are also agent middlemen who negotiate purchases or sales or both. They don’t take title to the goods they deal in. Sometimes they take possession though. These agents don’t earn salaries. They receive commissions. This is a percentage of the value of the goods they sell.

Wholesalers simplify the process of distribution. For example, the average supermarket stocks 5,000 items in groceries alone, a retail druggist can have more than 6,000 items. As a wholesaler handles a large assortment of items from numerous manufacturers he reduces the problem of both manufacturer and retailer. The store keeper does not have to deal directly with thousands of different people. He usually has a well-stocked store and deals with only a few wholesalers.

ACTIVE VOCABULARY

wholesaling оптова торгівля

to provide channels забезпечувати системою (збуту)

indirect channels непряма, опосередкована система

(збуту)

complicated channels складна система (збуту)

retailer роздрібний торговець

chain movement рух до об’єднання

wholesale unit контора з оптової торгівлі

total sales вільний продаж

middleman посередник

merchant wholesaler оптовий покупець

wholesaling middleman оптовий покупець (посередник)

to take title to the goods придбання товарів, як власність

agent middleman посередник між виробником і

покупцем

to negotiate purchases or sales вести переговори з приводу купівлі

та продажу

to earn salary заробляти заробітну плату

to receive commissions отримувати відсоток від продажу

grocery бакалійна торгівля

to handle керувати, торгувати (амер.)

Exercise 1. Answer the following questions.

1. What is the aim of the wholesaling?

2. How can you describe a direct channel of a distribution?

3. What is an indirect channel of distribution?

4. What channel of distribution is preferable?

5. Is there any difference between a merchant wholesaler and an agent middleman? What’s this difference?

6. How does a wholesaler simplify the process of distribution?

7. What would a retailer have to do without wholesalers?

Exercise 2. Choose the necessary word and put it in the sentence(wholesalers, take title, retailer, stock, channels, assortment, to receive commissions, mid­dleman).

1. They use both direct and indirect ... of distribution.

2. Agent middlemen do not ... to the goods they deal in.

3. Usually wholesaling ... stands between the producer and the retailer.

4. A supermarket may ... thousands of commissions items.

5. Usually a wholesaler handles a large ... of items of numerous manufacturers.

6. Agent middlemen don’t earn salaries they ...

7. A wholesaler doesn’t deal with the customers he does with ...

8. ... simplify the problems of manufacturers.

Exercise 3. Translate the following sentences into English.

1. Оптова торгівля – важливий елемент ринкової системи. 2. Товари надходять від оптового посередника до споживача через роздрібного торговця. 3. Непряма система збуту є набагато кращою. 4. Оптові скупники купують товар. Посередник одержує проценти від продажу. 5. Посередник зазвичай веде переговори з приводу закупівлі або продажу. 6. У цьому магазині хороший асортимент товарів. Менеджер з маркетингу незабаром одержить підвищення. 7. Ми змушені дорого платити за доставку. 8. Наша фірма відшкодує нам витрати за обід і проїзд. Це була джентльменська угода.

TEXT 8

THE EVOLUTION OF MONEY

(Еволюція грошей)

Money is used for buying or selling goods, for measuring value and for storing wealth. Almost every society now has a money economy based on coins and paper bills of one kind or another. However, this has not always been true. In primitive societies a system of barter was used. Barter was a system of direct exchange of goods. Somebody could exchange a sheep, for example, for anything in the marketplace that they considered to be of equal value. Barter, however, was a very unsatisfactory system, because people’s precise needs seldom coincided. People needed more practical system of exchange, and various money systems developed based on goods which the members of a society recognized as having value. Cattle, grain, teeth, shells, feathers, skulls, salt, elephant tusks, and tobacco have all been used. Precious metais gradually took over because, when made into coins, they were portable, durable, recognizable, and divisible into larger and smaller units of value. A coin is a piece of metal, usually discshaped, which bears lettering, designs or numbers showing its value. Until the eighteenth and nineteenth centuries, coins were given monetary worth based on the exact amount of metal contained in them, but most modern coins are based on face value – the value that governments choose to give them, irrespective of the actual metal content. Most governments now issue paper money in the form of bills, which are really "promises to pay". Paper money is obviously easier to handle and much more convenient in the modern world. Checks and credit cards are being used increasingly, and it is possible to imagine a world where "money" in the form of coins and paper currency will no longer be used.

ACTIVE VOCABULARY

to be used for використовуватись для

value цінність

to store накопичувати

unsatisfactory незадовільний

equal рівний

to coincide співпадати

to recognize розпізнавати

gradually поступово

portable портативний

durable витривалий

recognizable такий, що легко розпізнати

lettering надпис

devisible подільний

exact amount точна кількість

metal content вміст металу

to issue випускати

obviously очевидно

currency валюта

Exercise 1. Answer the following questions.

1. What is the purpose of money?

2. What is money used for?

3. What does almost every society have nowadays?

4. What money system was used in primitive society?

5. What is barter?

6. Why wasn’t the system of barter very efficient?

7. Why did precious metals gradually take over?

8. What is a coin? How does it look like?

9. What was the characteristic feature of a coin in the 18th century?

10. In what forms do money exist in modern societies?

Exercise 2. Translate the following sentences into English.

1. Більшість країн світу мають економіку, яка основується на монетах та паперових грошах. 2. Бартер – це система прямого обміну товарами. 3. Бартер був незадовільною системою, тому що точні потреби людей рідко співпадали. 4. Монета – це невелика кількість металу у формі диска, яка має надписи, дизайн, цифри, що показують її цінність (вартість). 5. Більшість урядів випускають паперові гроші у формі банкнот. 6. Паперові гроші легші у використанні і зручніші в сучасному світі.

Exercise 3. Retell the text.

TEXT 9

MONEY

(Гроші)

Frank Garcia was a young man with very little money, but very big dreams. He worked in a factory and earned only $200 a week. He owned almost nothing – some old furniture and some clothes, but he dreamed of having a big house and a big car.

Every day Frank bought live lottery tickets for one dollar each. He dreamed that one day he would win first prize in the lottery and become a millionaire. Then he could afford to buy whatever he wanted and would never have to work another day in his life.

One day as usual Frank opened the newspaper to check his numbers. He read the numbers slowly, "6–11–31–32–47–49". Those were his numbers ! He looked again. "6–11–31–32–47–49". He had won. He had won the lottery. He was a millionaire !

Suddenly everyone wanted to be Frank’s friend. Many people came to him and asked if they could borrow money. "Of course, we’ll pay back every penny", they said. Others told him about their wonderful ideas for making money. "If you invest $100, 000 in this project", they said. "I promise in two years you will make a big profit and double your money".

The money had come easily and Frank spent it easily.

He lent $5,000 to this friend and $10,000 to that. He invested $100,000 here and $200,000 there. He made no effort to save anything.

When he bought something he never looked at the price. If something cost a thousand dollars, he paid a thousand dollars. He never worried about whether it was worth it or not. He bought cars, jewelry, and clothes. He also bought airline tickets. He flew first class to all the major cities of the world. He stayed at the best hotels, he ate at the best restaurants, and he bought the finest clothes.

Then one day, when he went to pay his bill at a hotel in Rio, the manager had to tell him. "I’m sorry sir, but I’m afraid your credit card company will not pay this bill".

Frank flew home. It was true he had no more money. He went back to the people who owed him money, but they were unable to repay him. The projects in which he had invested his money had all lost money. In six months Frank had spent $2 million.

Frank now had no choice. He had to sell the cars, the watches and the clothes and he had to go back to work in the factory.

ACTIVE VOCABULARY

to afford дозволяти собі

to borrow (from) позичати (у когось)

to invest вкладати

to earn заробляти

to own володіти

a profit прибуток

to lend позичати

to save заощаджувати

to cost коштувати

worth вартий

to owe заборгувати

a fee плата, гонорар

interest відсотки

tax податок

wages заробітна плата

salary платня, оклад

fare плата за проїзд

cash готівка

change здача

charges витрати

Exercise 1. Find the correct ending for each sentence according to the information in the story.

1. Frank used to earn.

2. Frank used to buy.

3. Frank used to own.

4. Frank won.

5. Frank’s friends borrowed.

6. Frank invested.

7. Frank’s friends owed.

8. Frank’s friends couldn’t repay.

a) a lot of money from him.

b) him a lot of money.

c) $2 million.

d) money in some of his friend’s ideas.

e) $200 a week.

f) the money he had lent them.

g) lottery tickets every day.

h) old clothes and some old furniture.

Exercise 2. Match the words with their definitions. Learn the definitions and in turns ask each other to define them.

a) fees; b) interest; c) taxes; d) wages; e) salary; f) rent; g) pension; h) fare cash; і) change.

1. money paid for a place to live.

2. money paid to the government.

3. money paid for professional services.

4. money in coins and bills, not checks.

5. money paid to workers by the hour or week.

6. money paid as charges on the money you borrow.

7. money paid to workers for a month’s or year’s work.

8. money paid to older people who no longer work.

9. money returned to you after you pay too much.

10. money paid for a trip by bus, train or plane.

TEXT 10

A STUDENT WITH A $30,000 PLAN

At five he was collecting old newspapers to make money. And when he was 15 he signed his schoolmates up to start a babysitting circle.

Now 20, third-year Cambridge University student Peter Blackburn is managing director of a company with a $30,000 turnover. And he reckons it will show a profit of more then $15,000 by next summer.

He set up Peter Blackburn Ltd last year to bring out a brand new, colour term planner that now students all over the UK are using.

"I felt that most of the planners going around were pretty unimaginative", he says. "I believed I could do a better job and decided to have a go".

Blackburn admits that he is putting far more effort into the business than his computer studies course at university. While fellow students are out with their friends, he keeps in touch with his business headquarters in Lancashire by mobile phone. Before he set up the company, he spent one holiday preparing a plan that would convince his bank to lend him money.

"Most students work hard for a good degree because they believe that will help them get a job to support themselves", he says. "I work hard at my company because that is what will support me next year, after I leave college".

Friends reckon that Blackburn will make $1 million within 5 years.

He is not quite so confident, however. "There’s a lot to be done yet", he says.

ACTIVE VOCABULARY

to collect newspapers збирати газети

to sign up наймати на роботу

a turnover обіг

to reckon думати, мати думку

to set up заснувати

unimaginative з поганою уявою

to put efforts докладати зусиль

to admit признавати

to keep in touch тримати зв’язок

headquarters головний офіс

to convince переконувати

Exercise 1. Look at the headline of the article. Write down three questions that you would like to ask about Peter Blackburn. Now read the article. Were your questions answered?

Exercise 2. Put these facts about Peter into the correct order.

1. He spent his holiday preparing a plan.

2. He collected newspapers.

3. He set up his own company.

4. He asked the bank for money.

5. He set up a babysitting circle.

Exercise 3. Find the words in column A in the article. Then match each word or phrase in A with its meaning in B.

A B

1. turnover a thinks

2. reckons b sure

3. have a go c value of goods and services a business has sold

4. keeps in touch d communicates

5. confident e try

Exercise 4. Do you think Peter is right to put more effort into his business then into his computer course? Should he spend less time working and more time with his friends? Why/Why not?