2. Answer these questions:

1. What meaning does the word product have?

2. What things does it include?

3. How do manufacturers create their brand names?

4. What do most product lines consist of?

5. What can be called a product mix?

6. Why are companies always looking to the future?

7. What product lines do companies whose aims are high market share have?

8. What product lines do companies whose aims are high profitability?

9. Describe line-stretching

10. Why do companies use it?

11. Describe line-filling

12. Why do companies use it?

III Find words or expressions in the text which mean the following:

1. the possibility of paying for a product over an extended period

2. a promise by a manufacturer or seller to repair or replace defective goods during a certain period of time.

3. a surface in a store on which goods are displayed

4. consumers who buy various competing products rather than being loyal to a particular brand

5. the standard pattern of sales of a product over the period that it is marketed

6. the extend to which an activity provides financial gain

7. possibilities of filling unsatisfied needs in sectors in which the company can produce goods or services effectively

8. the sales of a company expressed as a percentage of total sales in a given market

9. the set of beliefs that the public at large holds of an organization

10. a small, specialized, but profitable segment of a market

IV .Preparing a report

Imagine that an international vending machine operator is hoping to increase its activities in your country, and has hired you to report on the existing market and to suggest new products that could be distributed via vending machines.

First you have to prepare a report outlining:

• which products are currently sold in vending machines in your country

• where such machines are usually situated

• what kind of customers generally use them and in what circumstances

Then you have to suggest further products that could perhaps be distributed in this way.

5. Read and complete the gaps using the following words:

Assembled, costs, defects, expenditure, implications, investment, pretest, recall, resultant, share, suppliers, unchanged

Management of quality control

Perhaps low warranty (1)……….mean spending a lot of money on quality control and the prevention of (2)……….? Not at all. It appears that (3)……….on prevention and inspection is much less than the cost of failure, and the (4)……….need to rework, scrap, recall, and service. On average it appears the cost of quality is less than one half the cost of failure. Obviously, failures must be more expensive to put right after a unit has been (5)………. The cost of the extra hours used to (6)……….a design is cheap compared to the cost of product (7)……….Field service costs are higher than the cost of inspection.

But quality has even wider (8)………..: for example, for market (9)……….and return on (10)……….Thus, businesses with a high product quality have a return three or four times greater than businesses with a low product quality. And businesses which improve their quality increase their market five to six times faster than those whose quality remains (11)……….

It would appear that counterattack is possible. According to the Harvard Business Review, in 1980, Hewlett-Packard tested 300,000 semiconductors from three American and three Japanese (12)………. At that time, the Japanese chips had a failure rate one-six that of the American chips. When the test was repeated two years later, the American companies had virtually closed the gap. In cars and trucks, the gap is also rapidly closing.