Учебник Английский язык

2.Read the whole article. How is brand advertising changing?

3.Discuss the following questions in small groups. Report your ideas to the class.

a)You are going to buy one of the following products. How important is it to buy a well-known brand?

trainers / a mobile phone / a car / a computer

b)Would you buy a product because it is endorsed by someone famous? If so, give an example.

c)Have you ever been persuaded to buy a product because of an advertisement?

If

so, describe the advert.

d)In order to achieve international brand awareness, which is the most effective form of advertising?

READING 2

1. Select the appropriate expressions to complete the text:

Branding

In a market containing several similar competing products, producers can augment their basic product with additional services and benefits such as customer advice, delivery, credit facilities, a warranty or guarantee, maintenance, after-sales service, and so on, (1) ……… distinguish it from competitors’ offers.

Most producers also differentiate their products by branding them. Some manufacturers, such as Yamaha, Microsoft, and Colgate, use their name (the ‘family name’) for all their products. Others market various products under individual brand names, (2) ……… many customers are unaware of the name of the manufacturing company, (3) ………, Unilever and Proctor & Gamble, the major producers of soap powders, famously have a multi-brand strategy which allows them to compete in various market segments, and to fill shelf space in shops, (4) ……… leaving less room for competitors. (5) ……... also gives them a greater chance of getting some of the custom of brand-switchers.

(6) ……… famous manufacturers’ brands, there are also wholesalers’ and retailers’ brands. (7) ………, most large supermarket chains now offer their ‘ownlabel’ brands, many of which are made by one of the better-known manufacturers.

Brand names should (8) ……… be easy to recognize and remember. They should also be easy to pronounce and, especially for international brands, should not mean something embarrassing in a foreign language!

(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).

1.	a. as a result of	b. in order to	c. thus
2.	a. although	b. since	c. so that
3.	a. Consequently	b. Despite	c. For instance
4.	a for example	b. however	c. thus
5.	a. There	b. That	c. This
6.	a. As a result of	b. In addition to	c. Owing to
7.	a. For example	b. Furthermore	c. However
8.	a. i.e.	b. of course	c. therefore
9.	a. As well as	b. Despite	c. So as to
10. a. Although		b. in other words	c. on account of

2.Complete the following collocations

1.to augment ……...

2.………. . facilities

3.after-sales ………..

4.multi-brand ………….

5.to fill…………

6.………… chains

3. Discuss in pairs.

What are the advantages of branded goods for: a) the manufacturer b) the consumer?

Project work: Study the case.

Of Italian origin, Silvana emigrated to England from Lugano, Switzerland, with her family when she was ten years old. Later, she married Pierre, who was also Swiss, and worked in his designer clothing business in London. In 1980, they moved to Oxford and opened a French-style restaurant.

The restaurant was very successful, but Silvana found it difficult to get high quality after-dinner chocolates in England. So she was so disappointed about this that she decided to return to Lugano and learn how to make them herself. A friend of hers owned a large chocolate factory there, and happily showed her how

chocolates were manufactured. Back in England, she started producing hand-made chocolates for her restaurant clientele and friends. She used top-quality ingredients, and the chocolates were greatly praised by all who tasted them.

The idea of establishing a hand-made confectionary business came almost by chance. One day, on an impulsive, they contacted a famous chain of quality food stores based in London. The firm’s chief buyer expressed interest in their products, and the following week they went to London with their samples. To their astonishment, they left the buyer’s office with an order for 30 kilos!

Seeing a potential in Selvana’s ‘hobby’, the couple sold their restaurant and used the proceeds to set up Silvana Chocolates. Within a year, they were unable to cope with the demand and had to take on additional labour. Five years later, Silvana Chocolates was a flourishing business to be much bigger. They would also like to expand into Europe as soon as possible. To do so successfully, they know they must create a stronger brand image – the chocolates don’t really have a ‘personality’ at the moment – and devise a marketing plan to increase brand awareness – their products are still not widely known by the general public.

To discuss suitable ways of improving brand image and increasing consumer awareness, Pierre and Silvana have set up a meeting with a small advertising agency in London.

Work in groups. You are the members of the advertising agency. You need to work out an advertising campaign for Silvana chocolates.

Think about stronger brand image.

Think how to increase consumer awareness in order to expand into Europe.

Try to come up with ideas for new packaging (people say it’s dull).

Create an attractive logo and catchy slogans for any advertising you decide to do.

Think about different ways of special promotions.

Part 10

PRICE AND PRICING

1.Explain the difference between ‘price’ and ‘pricing’?

2.Work in groups and make the list of words which can collocate with the word ‘price’ or refer to this notion somehow.

VOCABULARY THROUGH THE CONTEXT

Pricing

A:Our goods are low-priced. Permanently low pricing means we charge low prices all the time.

B:You mean cheap: your goods are poor quality. Our goods are high-priced, but we give customer service. And a lot of our goods are mid-priced: not cheap

and not expensive.

A:Your goods are expensive. Customers don’t need service.

B:You must be selling some goods at cost (what you pay for them) or at a loss

(even less).

A: Yes. We have loss leaders - cheap items to attract customers in. But it's all below the ‘official’ list price or recommended retail price. We have a policy of discounting, selling at a discount to the list price.

‘If they go on undercutting us, we can’t stay in business,’ A thought.

Word combinations with ‘price’

	boom	a good period for sellers, when prices are rising quickly
	controls	government efforts to limit price increases
price	cut	a reduction in price
	hike	an increase in price
	war	when competing companies reduce prices in response to
	leader	each other
		a company that is first to reduce or increase prices
	tag	label attached to goods, showing the price; also means ‘price’

Upmarket and downmarket

Products, for example skis, exist in different models. Some are basic, some more sophisticated. The cheapest skis are low-end or bottom-end. The most expensive ones are high-end or top-end products, designed for experienced users (or people with a lot of money!). The cheapest entry-level skis are for beginners who have never bought skis before. Those in between are mid-range. If you buy sophisticated skis to replace basic ones, you trade up and move upmarket. If you buy cheaper skis after buying more expensive ones, you trade down and move

downmarket.
Downmarket can show disapproval.	BrE: upmarket, downmarket
If a publisher takes a newspaper downmarket,	AmE: upscale, downscale

they make it more popular; but less cultural, to increase sales.

Mass markets and niches

Mass market describes goods that sell in large quantities and the people who buy them. For example, family cars are a mass market product. A niche or niche market is a small group of buyers with special needs, which may be profitable to sell to. For example, sports cars are a niche in the car industry.

1. Look at the price list. Are the statements below true or false?

1 The pricing policy is to sell below list prices.

2 The Adagio is low-priced, and is cheaper than the competition. 3 The mid-priced models are the Brio and the Capricioso.

4 The retailer charges 16,908 euros for the Delicioso.

5 The Delicioso is the highest-priced model.

6 The Delicioso is cheaper than the competition.

7 All models are sold at discount.

Model	List price	Our price	Competing
			product
Adagio	11,541	9,999	10,500
Brio	13,349	12,999	12,896
Capricioso	15,742	14,999	13,987
Delicioso	16,908	15,999	14,442

2. Complete the sentences with the appropriate form of words from vocabulary.

1 A price ...........by Mills may indicate the start of price increases by other producers.

2 Britain's house price ...…… has gone beyond London, with properties in Kent now worth 25 per cent more than a year ago.

3 Consumers will get price ……… of eight per cent off phone bills from May. 4 When President Perez ended price ………, electricity, phone and transport costs went up.

5 Petron is a price ..…….; it's usually the first to offer lower prices.

6 The project had many design problems, pushing up the price ……… for each helicopter from $11 million to $26 million.

7 There is a price …….. between Easyjet and KLM on the London to Amsterdam route.

3. Correct the mistakes in italics, using expressions from vocabulary.

I'm Denise van Beek, from sailing boat company Nordsee Marine. We have something for everyone. If you've never sailed before, try our (1) mid-range model, the Classic. It's six metres long and very easy to sail. After a year or two, many customers (2) trade down or (3) take upmarket to something more (4) basic, like the (5) entry-level nine-metre Turbosail, with more equipment and a bit more luxury. Our (6) bottom end product is the Fantasy. It's 15 metres long and has everything you need for comfort on long voyages. We also produce the Retro, a traditional boat. There's a small but profitable (7) mass market for this type of boat.

4. Match the words to their definitions.

discount	selling of products in a foreign market at less than
	what it costs to make them

price cuts	the market where low-priced products are sold
dumping	the cheapest model of a company’s product range
	designed for people buying for the first time
downmarket	the market that deals with non-luxury goods which
	are sold in large quantities
upmarket	a specific area of a market
entry-level product	the market which refers to expensive products
mass market	the cheapest model of a company’s product line
bottom-end product	the reduction of price
niche	the offer of a lower price

5. Work in groups. Choose three companies which operate in one and the same market segment. Compare their prices and present your analysis to the class.

READING

1. a) Working in pairs, think about factors that influence the price. Make up a list of them.

b)Read the text and compare your ideas with the factors listed there.

c)Complete the text using these words:

Pricing

competitive	components	market leader	market segments
market share	monopolist	overheads	plant
sensitive	substitute	target	volumes

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 markets 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 setting as low a price as possible so as to increase sales volume and (7)………

leading to lower unit production and distribution costs and higher long-run profit. The low price will also discourage competitors.

Companies with overcapacity, intensive competition, a large inventory, or a declining market are likely to cut the prices of established products. They are more concerned with keeping the (8)……… going and staying in business than making a current profit. On the contrary, firms facing rising costs, or in need of cash in the short term, tend to raise prices. A company faced with demand that exceeds supply is also likely to raise its prices, like a (9) .……… .

Firms in perfectly (10) ......... markets, or homogeneous-product markets, or small firms in an industry with a strong (11)………, are likely to use going-rate pricing, i.e., they will charge more or less the same price as everyone else, rather than set a price based on estimates of costs or projected demand.

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 offseason. 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’ reactions if they change their own prices.

2.Answer the questions.

1.What are ‘overheads’?

2.What is ‘market-skimming’ and ‘market-penetration’? What results could these activities lead?

3.Is it possible for a company to reduce their prices? Why?

4.When does a company usually increase the prices?

5.In which case can a company charge its own without paying attention to going-rate pricing?

6.What is ‘price war’? How is it possible to avoid such war? Can you tell about any cases of price war that you’ve heard?

VOCABULARY 2

I a) ‘Market-skimming’ and ‘market-penetration’ are not the only pricing strategies used by companies. Read about other strategies.

Premium pricing: Use a high price when there is a substantial competitive advantage – for example, rooms in Savoy hotels.

Penetration pricing: The price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased.

Economy pricing: Marketing and manufacturing costs are kept to a minimum. Supermarkets often have economy brands for soups, spaghetti, etc.

Price skimming: Charge a high price because you have a new product type. However, the high price attracts new competitors into the market, and the price falls due to increased supply. DVD players were launched with this strategy.

Psychological pricing: The consumer responds on an emotional, rather than rational, basis. For example, charging 99 cents instead of 1 dollar.

Captive product pricing: Companies will charge a premium price where the consumer cannot choose a competitive product.

Product bundle pricing: Sellers combine several products in the same package. This also serves to move old stock. Videos and CDs are often sold using bundle approach.

b) Read the descriptions and name the pricing strategies that are being used. 1 charging a high amount for bottles of water inside a football stadium during the World Cup

2 charging $2.95 instead of $3

*Alternative solutions: our stick packaging is unique

*Ease of comparison: easy to compare price but difficult to compare tastes

*Unique benefits/Unique Selling Points (USPs): quality of tea; stick format

a * Monetary significance: tea is cheap, but the innovative packaging has a high on

value

* Demand: tea consumption is stable, but sales in speciality shops are on the rise

* Price sensitivity: consumers are very price sensitive – sales decrease when prices increase

* Complementary costs: none – the customer doesn’t even need a spoon!!

b) Match the questions about pricing strategy (1-7) to the pricing considerations (a-g).

1 What is value of the product or service for the consumer? 2 What is special or different about the product or service?

3 Is it difficult to compare the price and quality of similar products or services? 4 How many people want to buy the product or service?

5 How many similar products or services are there on the market?

6 What else does the consumer need to for in order to use the product or service? 7 How much does a change in price affect consumer demand for the product or service?

a alternative solutions b ease of comparison c unique benefits

d monetary significance e demand

f price sensitivity

g complementary costs

III The price test

a) Stick Tea decide to carry out a price test for their range of tea. They want to know what customers think is a fair price for a box of 50 sticks. They are also interested in comparing different possible retail price points (€12, €14 and €16), to find out what customers consider to be the full price and the bargain price for a box of 250 sticks.

b) Complete the text using words from the box.

bargain	fair	premium	significance		unique
costs	points	sensitive		solutions

When deciding on the price of a product or service you have to consider the product or service itself. For example, does it have (1) ……… benefits? Does the consumer have any alternative (2) ………? What is the monetary (3) ……… of the product or service? You also have to think about the possibility of complementary

(4) ………, and how price (5) ……… the consumers are to these and the product or the service cost.

Then you need to think about the pricing strategy and how this relates to the brand. For a luxury brand it is essential to follow a (6) ……… pricing strategy in order to maintain the brand image. A no-frills low price would not be suitable for a brand such as Cartier.

Finally, you need to carry out a price test to check the price (7) ……… you are considering. The (8) ……… price is the amount that the consumer is prepared to pay for the product or service. A (9) ……… price is a low price that may be used during special offers or for promotional pricing.

IV a)What do you think about dumping? Is this tactics approved? What could be the results of such operating in the market?

b) Read the article from Financial Times and re-arrange the sections into a logical order. (The first paragraph is A and the last is H.)

EU STEEL DUMPING CLAIM

a European Union steelmakers are to file an anti-dumping complaint,

b raising their share in Germany from an average 5 per cent in the first nine months of 1993 to more than 18 per cent in the final quarter.

c and had captured 27 per cent of total German sales by the final quarter, the Dusseldorf-based federal steel association said yesterday.

d Czech suppliers had been particularly aggressive, it added,

e alleging Czech and Hungarian structural steel suppliers have under-cut EU prices by up to 50 per cent.

f The complaint regarding structural steel, widely used in construction,

g The east Europeans increased their EU market share almost threefold to 9 per cent last year,

h will be posted later this week by the EU’s Eurofer industry group, which will claim unfair tactics are costing western steel companies DM320 million a year.