Unit #5. Marketing

I. Read the text about marketing, translate and explain italicized words

MARKETING

In business, you don't get what you deserve, you get what you negotiate.

(Dr. Chester L. Karrass)

The terms market and marketing can have several meanings depending upon how they are used. The term stock market refers to the buying and selling of shares in corporations as well as other activities related to stock trading and pricing. The important world stock markets are in London, Geneva, New York, Tokyo, and Singapore. When economists use the word "market" they mean a set of forces such as the supply available for sale and the demand for it by consumers. The term marketing in business includes all of these meanings and more.

In the past, the concept of marketing emphasized sales. The producer or manufacturer made a product he wanted to sell. Marketing was the task of figuring out how to sell the product. Basically, selling the product would be accomplished by sales promotion, which included advertising and personal selling. In addition to sales promotion, marketing also involved the physical distribution of the product to the places where it was actually sold. Distribution consists of transportation, storage, and related services such as financing, standardization, and grading, and the related risks.

The modem marketing concept encompasses all of the activities mentioned, but it is based on a different set of principles. It subscribes to the notion that production can be economically justified only by consumption. In other words, goods should be produced only if they can be sold. Therefore, the producer should consider who is going to buy the product — or what the market for the product is going to be — before the production begins. This is very different from making a product and then thinking about how to sell it.

Marketing now involves first deciding what the customer wants and then designing and producing a product that satisfies these wants at a profit to the company. Instead of concentrating solely on production, the company must consider the mercurial desires of the consumer, and this is much more difficult since it involves human behavior. Here psychology comes into play, and manufacturers often hire specialists in the field.

Marketing strategies nowadays

Originally marketing was meant to help to avoid overproduction. Now marketing is considered to be a system of all business activities of a company in respect of coordinating supply and demand for the goods produced.

Before producing and selling the goods, one must do a lot of market research. Useful information for this purpose can be obtained from embassies, consulates and foreign trade representatives, from trade magazines or from specialized consultant agencies, which will do a professional market research job for a certain fee. The information needed is whether there is any demand for your goods, what is the market potential, what sort of competition is to be met (that is what price of the goods, including those produced locally, is considered to be competitive), what domestic preferences, local trading customs and seasonal factors should be taken into account. Actually, marketing covers not only market research, but also planning the assortment of goods, price policy, advertising and promo­tion of sales, controlling the sales and post-sales servicing. So nowa­days general marketing strategy includes such essential elements as planning, market research, new product development, sales, commu­nications and advertising.

Planning. While speaking of marketing planning, one should think first of all of the so-called controllable and uncontrollable factors. The controllable factors are the following: product, price, place and promo­tion; the uncontrollable ones — environmental factors. Both these types are very important when one starts analyzing the market situation.

Research. Market research is concerned first of all with product choice study and the study of competitors' interests and their claims. The most popular methods of conducting marketing research are ob­servation, survey, experiment and public opinion polls through differ­ent channels.

Production. Attitudinal research should affect the product to be produced, so production is inevitably based on marketing intelligence study. Marketing investigates stages before, during and after production and also the stage following sales.

Sales. Sales are always involved with customers service of all kinds. Markets for consumer products are segmented on the basis of demographic and psychographic data research.

Communications and advertising. The communications mix com­prises advertising, public relations, direct mail and special events such as product shows, conferences and exhibitions. Advertising is an impor­tant means of promoting the goods that have been produced already, as well as new lines in business. Nowadays there are special departments and agencies dealing with advertising. Different kinds of mass media — TV, radio, newspapers, cinema, magazines, posters — are used for advertising aims. Special leaflets, booklets and other printed matter" with the information about goods may be published for the same purpose. The choice of media for advertising depends on the kind of goods and on the local conditions and people's habits.

II. Vocabulary and speech exercises.

1. Explain the meaning of the following words and phrases in English:

embassy; market research; market potential; seasonal factors; controllable factors; consumer products; the communications mix; overproduction; direct mail; sales promotion; public relations;

2. Give English equivalents for the following Russian words and phrases:

a) емкость рынка; ценовая политика; гарантийное обслу­живание; торговые представители; традиции и обычаи; органи­зация контактов с потребителями; факторы, связанные с внеш­ней средой; связи с общественностью

b) избежать перепроизводства; координировать спрос и пред­ложение; проводить выставки и конференции; считаться конку­рентоспособным; включать в себя рекламное дело; проводить сег­ментацию рынка; влиять на выбор продукции

3. Say in English:

наблюдение; обзор; эксперимент; опрос общественного мне­ния; демонстрация товара; конференция; выставка; рекламный листок; буклет; рекламный плакат; печатный материал

4. Give verbs corresponding to the following nouns:

production; sales; communications; advertisement; information; management; discussion; market; research; assortment; development; analysis; relation; promotion; observation; experiment; competition; preference; choice; deal

5. Render the following text and give examples of your own which can prove the importance of taking into account the mentioned principle of marketing mix while doing business.

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Marketing is the management process that identifies, anticipates and satisfies customer requirements efficiently and profitably. Customers’ needs are anticipated and identified by marketing research and segmentation and then a marketing mix is employed to satisfy customers.

The marketing mix is the set of controllable marketing variables that a firm blends to produce the response it wants in the target market. The elements of the mix need to be combined into an integrated marketing approach. One of the most common ways of presenting the marketing mix is the Four Ps:

Product The product needs to satisfy customer needs and forms part of the firm’s competitive strategy, especially product differentiation. The quality of the product as perceived by the potential customer needs to be considered. This involves assessing the product’s suitability for its stated purpose, its aesthetic factors, its durability, brand factors, packaging, and associated services.

Price Marketers do not have total control over the price. Cost factors will obviously have a big impact. However, a range of pricing strategies are available, for example, penetration pricing (low prices for a product launch or to increase sales volume) or skimming prices (high prices which can be used to maximise profits — commonly used in early days of high technology products). Aspects which come under this heading include discount structures for the trade, promotion pricing, methods of purchase, alternatives to outright purchase.

Place This relates to how the product will reach the customer. This will include decisions regarding distribution channel, location of outlets, position of warehouses, stock levels, delivery frequency, geographic market definition, sales territory organization.

Promotion The aim of promotion is to gain the potential customer’s attention, generate interest, arouse desire and stimulate action to purchase.

• Suggest ideas to “gain the potential customer’s attention”.

• Read the following text and explain the advantages of every promotional step.

Promotion is a term with several meanings. In a broad sense "promotion" is used to refer to marketing activities that create awareness, such as advertising, sales promotion and public relations. These activities promote your product or company and get the word out so customers and prospects know what you have to offer.

Also, the term "promotion" is used in a more narrow sense to describe activities such as community involvement, sponsorship of special events and giving away specialty items (key chains, hats, etc.). Participating in such promotional activities allows you to subtly promote your product or company because the focus is on the event or specialty item; your company's name is simply associated with the event or specialty item. A second marketing benefit of participating in promotional activities is that it offers additional networking opportunities.

The type of promotional activities you choose also helps to create and affirm your company image. For example, if you offer free water bottles (with your company logo on them, of course!) to participants in a 10K race to raise funds for breast cancer research, your company will be associated with caring about health issues affecting women. If you exhibit in a hi-tech trade show, your company will be perceived as a player in the hi-tech arena. From promotions in the context of a high-dollar sponsorship event to key chains with your company logo to pass out at a local fair, the ultimate goal is the same: To create awareness of your company and product. This should encourage customers to buy!