Учебник Английский язык

V a)What do you know about ‘product cannibalization’? When could it happen?

b) Complete this article from Economist with the words listed. One of the words is used three times.

Cannibalising up or down?

consumer	cannibalising	image	ads
consumers	cannibalisation	sales	share

…Even before Sensor reached the shops, Gillette and its agencies had stirred up uncommon interest in something that men think about for two minutes a day. ‘Teaser’ (1) ______ appeared during America’s Superbowl and all TV channels at once in each European market. …

At $3.75, the razors were cheaper than many non-disposables, so few (2) ______

would be put off, but expensive enough, compared with disposables, to maintain a prestige (3) ______ . Big profits would come from the blades; at 75 per cent each, they commanded a gross margin of nearly 90%.

Sensor blades and razors accounted for $200 million of Gillette’s $1.6 billion shaving (4) ______ in 1990. By years end it was nearly profitable, a remarkable feat for any new (5) ______ product. Of course, Sensor ate onto the market shares of Gillette’s other razors. ‘When you have 65% of the market, (6)

______ is inevitable, says Mr Hoffman. ‘The question is, are you (7) _____ up or down?’

Of Sensor’s 1990 (8) ______, 64% came from former users of other nondisposable shavers (52% from Gillette, 11% from competitors), and 29% from disposables: half from each. More encouraging, (9) _______ of disposables in Europe and America were flat. That trend continued in 1991, as Sensor’s (10) ______ of the blade market doubled, to around 15%, in both places.

Project work: Choose any company which activity is interesting to you. Find information about their price policy. Has it been changed whenever? What strategies do they use? What sort of products do they produce? And what prices do they charge for the products?

Part 11

CHANNELS OF DISTRIBUTION

1. What channels of distribution do you know? Work in groups and complete the diagram.

Channels of

distribution

Wh _ _ _ _ _ _ _	R _ _ _ _ _:	Direct sales:
	1	1
	2	2
	3	3
	4	4
		5

2. Think about advantages and disadvantages of these 3 groups of distribution.

VOCABULARY THROUGH THE CONTEXT

Logistics and the distribution chain

Logistics is the management of the transport and storage of goods. Marcus Bridgestone, the logistics manager for a plastic packaging company, is talking to a new assistant about the distribution chain.

	Marcus:	After completion, items get sent from the factory to the warehouse.
		We store them there until we are ready to ship, or deliver, to the
		client. I say ‘ship’ but we don't always use a boat to do it. The
		cheapest, but slowest, shipping method is by container ship, but it
		takes around five weeks to sail from Asia to Europe. Sometimes we
		need to move the shipments or freight much faster, so we use air
		freight. However, it’ much more expensive, although it depends on
		the weight of the load – the goods being carried. When the shipment
		gets to Europe we have a number of shipping options, which really
		depend on where the goods land - I mean, where they arrive - and
		where we have to deliver them. Rail freight is cheap but not always
		reliable, depending on the country. Road haulage is more expensive
	or	but the advantage is that lorries can go right up to the doors of shops
		factories.
	Assistant: What about the man from the delivery service?
	Marcus:	George, from Fedex? We try only to use delivery services when we
		need to send something small, or very urgently.

Direct distribution

This extract describes how Dell, the computer manufacturer, distributes its products:

Michael Dell started Dell Computers in 1984 with only $1,000. Dell has grown to be a company with average daily earnings of $40 million. How did he do it? A new concept: eliminate the middlemen and sell directly to the consumer. Dell has been able to maintain complete control over stock levels - that is, how much stock it holds at any one time - as well as distribution costs.

Dell figured out a new way to sell computers to the consumer, which was through direct distribution. Dell was able to gain a competitive advantage for several reasons:

∙First of all, direct distribution allows Dell to eliminate wholesalers, who buy and sell goods in large amounts to shops and businesses. This is an advantage because Dell does not have to deal with wholesalers or spend time keeping track of inventory in the wholesalers' warehouses - that is, monitoring what the wholesaler has in stock.

∙Secondly, Dell has eliminated retailers - the people, shops or businesses that sell to the public. This is effective because Dell does not have to receive customer orders from thousands of different retailers. It can take orders directly from the customer.

Note: stock or inventory? In Britain and American English, inventory refers to the complete list of goods in stock.

Franchise – franchisee buys the right to sell a company’s products in a particular area using the company’s name. McDonald’s is a good example of a franchise.

Indirect distribution

Unlike Dell, most manufacturers or service providers use an indirect distribution channel to connect the product and the consumer, where some kind of distributor or distribution intermediary is used.

1. Put the steps in the distribution chain in the correct order.

1 The goods arrive and can be sold to the consumer.

2 The franchise sends the order to the warehouse in South America.

3 Road haulage is used to ship the goods from Southampton to Brighton. 4 The goods land in Southampton.

5 The container ship is loaded with the parts.

6 A franchisee in Brighton places an order for car accessories.

2. Find six words from vocabulary that can be used to make word combinations with distribution. Then use some of the combinations to complete the cost controller's report.

_______

_______

distributio

n _________

_________

_________

_________

(1) ……… were very high last year so this year we have advised all project managers to use air freight as little as possible. Another possible source of high costs has been the length of the (2) ……… for our product. Although we have been trying to develop (3) ……… by attracting more customers to our website and encouraging them to order from us, most of our products get to market through an (4) ……… channel. We have been seeking ways to cut down the number of wholesalers and other types of (5) ……… . We are beginning to deal directly with retailers and in the long run this will reduce our costs.

Wholesalers, retailers and customers

Wholesalers	Retailers
PRODUCERS	CUSTOMERS
DISTRIBUTORS

A wholesaler or shop selling a particular product, such as cars, is a dealer. A reseller sells computers. Wholesalers and retailers are distributors. Wholesalers are sometimes disapprovingly called middlemen.

Shops

A shop (BrE) or store (AmE) is where people buy things. Companies may call it a retail outlet or sales outlet. Here are some types of shop:

chain store: part of a group of shops, all with the same name.

convenience store: small shop in a residential area and open long hours.

deep discounter: a supermarket with very low prices.

department store: very large shop with a wide variety of goods, usually in

a town centre.

drugstore: shop in a town centre in the US which sells medicines; you can also have coffee and meals there.

hypermarket: very large shop with a wide variety of goods, usually

outside a town.

supermarket: very large shop, selling mainly food.

In Britain, a shopping centre or shopping precinct is a purpose-built area or building in a town centre with a number of shops. Outside towns, there are shopping malls, where it is easy to park.

Franchises are owned by the people that run them (franchisees), but they only sell the goods of one company. That company (the franchisor) provides goods, organizes advertising, and offers help and support. In return it takes a percentage of the profits of each franchisee. Many restaurants are also run like this.

Direct marketing

Hi, I'm Beatrice and I work in a direct marketing company in Brussels. We organize mailings for mane different products and services. This is direct mail but people often call it junk mail. We target our mailing lists very carefully: for

example, we don't send mailshots for garden tools to people who live in apartments!

We also do telemarketing, selling by telephone, including cold calls to people who have had no contact with us before. People are often rude to the workers in our call centres when they do this.

3. Use expressions from vocabulary to complete this presentation.

Hi, my name's Michael Son. I started out in the PC business 15 years ago when I tried to buy a PC. There was a complicated (1) d…….. c......... between the manufacturer and the customer: (2) w..., (3) c……... and (4) r……… all

added to the costs, but they didn’t add much value from the (5) c………’s point of view. Here at Son Computers, we manufacture every PC to order and deliver straight to the buyer. That way we cut out the (6) m……… .

4. Say where you go if you want to:

1 park easily and visit different shops without going to the town centre. 2 visit different shops grouped together in a British town centre.

3 buy a packet of sugar when all the supermarkets are closed.

4 have a snack in an American city without going to a restaurant. 5 buy food very cheaply.

6 buy clothes in a town centre without going to a specialized clothes shop.

5 Which expression from vocabulary (direct marketing) does the ‘it’ in each sentence refer to?

1

I really hate it, all that stuff coming through my letter box. It never stops.

2

I have to do it. I’ve never spoken to them before, but I’ve got no choice.

	It’s a terrible place to work.		The two main
	We have to make 30 calls		activities make it up
	an hour, with few breaks.		are mailing and
			telemarketing.
3	300,000 well-targeted	6	People who come home to
	letters to cat-lovers? We		ten answer phone
	can organize it, no		message, all selling
	problem.		things, tend to hate it.

READING

Marketing Channels

1. Rearrange the sentences below to make a complete text about marketing channels.

a.If there’s only one intermediary, it could be a dealer or retailer for consumer goods, or a sales agent or broker for industrial goods.

b.In oilier words, decisions about the location of manufacturing and assembly plants and ware houses' inventory levels, and transport methods should ideally begin with the needs of customers.

c.More complex channels add further intermediaries such as transport companies,

wholesalers, and independent distributors.

d.Most producers, however, use a marketing channel involving one or more specialised intermediaries.

e.Of course' the choice of which physical distribution channels to use should not come at the end of the marketing process.

f.On the contrary, according to the logic of marketing, companies should begin with considerations such as the location of target customers, and work back to raw material sources and manufacturing.

g.Some manufacturers do direct marketing, selling their goods directly to the endusers.

h.These are essentially a short delivery time and a guarantee that products arrive in good condition.

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.

2. 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 immobilizes a lot of money.

3.Complete the crossword.

Down

1. I’m a ………(11). I stock and. resell car parts to half the garages in this city. 2. He's an ………(5) for three German companies. He's responsible for selling their products in Britain.

3. (and 8 Down) I'm a ………(5, 3) for a clothing manufacturer. I'm part of a team, but I have my own territory and try to sell to customers in this district.

7.See 4 Across

8.See 3 Down.

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).

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.

1.	2.	3.
	4.
5.
6.
	7.	8.

9.

Retailing

1.Do you like shopping? What types of shop do you prefer? Do you prefer any particular shop? Why?

2.Work in groups and discuss the reasons why people could not like shopping.

3.Look at the bar chart. Compare your list with the information taken from the survey.

What are the two main reasons people don’t like shopping? What can retailers do about these two problems in your opinion?

why we don't like shopping

queues
		42%
crowds									18%
finding product								8%
parking							7%
not enough time						5%
carrying it					4%
inconvenient opening time				3%
pricing			2%
packaging			2%

VOCABULARY THROUGH THE CONTEXT

Selling products and services

The seller

The sales force are the people who sell a product or sell a service. Their goal is to close a deal and make a sale. These people are trained to push back, or counter, arguments against their sales pitch (how they try to sell to you).

The general term for a person who sells for a living is salesperson. However, several other variations of the job title exist, depending on the job itself.

The purchaser

Type of	Description of purchaser and supplier
selling	B2B A purchaser (or buyer) in the procurement department
business to

business		is employed by a company to get the best deal from
		their suppliers (the lowest price or best payment
		terms).
		Retail buyers work for supermarkets or other types of
		retail outlet. They negotiate retail listings or
		supermarket listings with suppliers, meaning that the
		retailer agrees to list the product as something they sell.
		The supplier needs to secure a listing or get the products
		listed or the outlet will not give shelf space to the
		product - that is, display the product in the store.
business to	B2C	Individual clients or customers buy from a shop or an
consumer		online store.
consumer to	C2C	Individual people sell to other individuals. The classified
consumer		ads in local newspapers are a good example. C2C has
		become more common thanks to internet sites such as
		eBay.

Selling a service

A product is tangible, meaning it can be touched. A service, such as business consulting or healthcare, is intangible and does not have a physical presence. Packaging your service to make it look like a product is a frequently used marketing technique.

A marketing student is making notes from an article offering advice on selling services:

∙Package your different service levels. Create bundles that are easily sellable and that cater to your customers’ varying needs and budgets. A high-end package for a car maintenance plan may include picking up the car for service and cleaning the interior A low-end, prepaid package could include a reminder phone call for service and an oil change. These levels are differences in the actual deliverables and the total value.

∙Combine services to create a new offering. For instance, as a marketing consultant, you could join forces with a copywriter and a graphic designer to create a ‘Business Start-up Success’ package.

service levels = differently priced levels of service, at different quality levels

bundles = services in groups that are sold together

actual deliverables = what the consumer receives, i.e. a clean car

total value = the sum of the value of the individual services in the bundle