Insights into Marketing. Введение в маркетинг

Copyright ОАО «ЦКБ «БИБКОМ» & ООО «Aгентство Kнига-Cервис»
И.И. Воронцова, Л.И. Газарян, В.И. Уваров
INSIGHTS INTO MARKETING
ВВЕДЕНИЕ В МАРКЕТИНГ
Учебное пособие
2-е издание, стереотипное
Москва
Издательство «ФЛИНТА»
2012
УДК 339.1(075.8)
ББК 65.2902я73
В75
Воронцова И.И.
В75 Insights into Marketing. Введение в маркетинг [Электронный
ресурс]: учеб. пособие / И.И. Воронцова, Л.И.Газарян, В.И. Ува-
ров. – 2-е изд., стер. — М. : ФЛИНТА, 2012. — 208 с.
ISBN 9785976507487
Пособие соответствует Государственному образовательному
стандарту высшего профессионального образования для специальности
080111 «Маркетинг» и содержит детализированный учебный курс,
направленный на выработку навыков по различным видам работы с
профессиональной информацией на английском языке. Оригинальная
система упражнений к аутентичным текстам, предусматривающая акцент
на внеаудиторной работе студентов, активизирует работу смыслового
компонента при аналитическом чтении, помогая сформировать
собственную позицию в реальном деловом мире и проявить творческое
мышление.
Для студентов экономических, управленческих и социологических
специальностей вузов.
УДК 339.1(075.8)
ББК 65.290я73
© И.И. Воронцова, Л.И.Газарян,

ISBN 9785976507487 В.И. Уваров, 2012
© Издательство «Флинта», 2012
Contents
Предисловие ........................................................................................................ 4
Unit 1. About Marketing in General .............................................................. 7
Unit 2. Market Research ..................................................................................18
Unit 3. Market Segmentation .........................................................................27
Unit 4. Business Strategy ................................................................................34
Unit 5. Business Planning ................................................................................42
Unit 6. Product ...................................................................................................52
Unit 7. Pricing ....................................................................................................60
Unit 8. Distribution ...........................................................................................68
Unit 9. Sales Promotion ...................................................................................77
Unit 10. Advertising ..........................................................................................86
Unit 11. Trademark, Branding and Private Labeling ...............................96
Unit 12. Customer Service and Retention ............................................... 103
Unit 13. Oral Communication ..................................................................... 111
Unit14. Purchasing ......................................................................................... 118
Unit 15. Packaging ......................................................................................... 125
Unit 16. Merchandising of Intellectual Property ................................... 134
Unit17. Free Market ...................................................................................... 142
Unit18. Criticism of Marketing .................................................................. 150
Unit 19. Internet Marketing ........................................................................ 157
Unit 20. International Marketing ............................................................... 164
Appendices
• Word List ............................................................................................. 173
• List of Abbreviations in Marketing ............................................... 180
• Currencies of the World ................................................................... 187
• Job Interview Questions .................................................................. 190
• Keys ........................................................................................................ 201
• Bibliography ........................................................................................ 207
Предисловие
Учебное пособие “Insights into Marketing” предназначено студен-

там и аспирантам, изучающим экономику, менеджмент, социологию,
маркетинг, а также может быть адресовано широкой профессиональ-
ной аудитории лиц, занимающихся маркетингом.
Создание пособия вызвано необходимостью подготовить студен-
тов к дальнейшей самостоятельной работе с англоязычными текстами
по маркетингу — одной из основополагающих учебных дисциплин
для профессиональных руководителей — привить им навыки анализа
аутентичных материалов, обучить речевому общению на профессио-
нальные темы. Помимо этого, пособие ставит своей целью система-
тическое наращивание активного словаря и расширение языкового
кругозора студентов.
Структура и интерфейс пособия определены этими целями.
Поощряется тактика активного обучения со стороны студентов,
построенного на принципах сознательного партнерства и взаимо-
действия с преподавателем, творческой активности. Авторы видят
свою задачу в активизации внеаудиторной работы студентов как
части этого процесса.
Содержательная сторона отвечает задачам введения и отработки
профессионального языкового материала по темам, определенным
учебной программой и Государственным образовательным стандар-
том высшего профессионального образования для указанных выше
специальностей. Таким образом, происходит реализация междисци-
плинарных связей, представляющая собой двусторонний процесс. С
одной стороны, студенты получают возможность использовать фоно-
вые знания для развития различных видов речевой деятельности на
английском языке, им предлагается привлекать собственный опыт
и общую эрудицию. С другой стороны, культурологические знания,
полученные на занятиях по английскому языку, могут быть исполь-
зованы при изучении специальных дисциплин и прочих предметов
гуманитарного цикла.
4
В пособии используются аутентичные тексты разнообразных

функциональных стилей и жанров из прессы и публикаций — таким
образом отражается реальный профессиональный мир и предлагается
широкая палитра взглядов и мнений. Текстовой материал содержит
в равной степени ценную информацию лингвистического, страно-
ведческого и профессионального характера, что готовит студентов
к ситуациям реальной жизни.
В пособие вошли 20 взаимосвязанных учебных блоков, или
модулей, построенных по единой схеме. Каждый модуль включает
следующие разделы:
1. Leadin. Введение в тематику модуля. Презентационный ма-

териал в форме, позволяющей активизировать речевую деятельность
студентов в опоре на уже имеющиеся у них знания.
2. Key Vocabulary. Представление и отработка ключевого сло-
варя по теме.
3. Reading. Основной текст для аналитического чтения и упраж-
нения, позволяющие максимально эффективно организовать работу
с текстовым материалом.
4. Comprehension Check. Упражнения на проверку понимания
текста.
5. Vocabulary Development. Упражнения на усвоение нового
лексического материала.
6. Skills Focus. Разнообразные формы закрепления речевых
умений в ситуациях, симулирующих реальную практику бизнеса.
Работа в парах и минигруппах.
7. Writing. Реферирование, составление эссе, деловая коррес-
понденция. Полные и реферативные переводы.
Раздел Appendiсes включает:

• тематический глоссарий, аббревиатуры знаковых понятий
в области маркетинга, основные валюты мира, примеры
вопросов из интервью для кандидатов на ключевые позиции
в маркетинге;
• ключи для проверки самостоятельно выполненных заданий.
5
В пособии делается акцент на выполнение практических за-

даний, моделирующих реальные ситуации бизнеса (представление
информации, описание тенденций, участие в конференциях, деловых
встречах и т.д.).
В конце каждого модуля предполагается выполнение творче-
ского задания, аккумулирующего информационные знания и при-
обретенные речевые умения и навыки. Возможны формы кратких
презентаций, участие в дискуссиях и переговорах. Приоритетная роль
отводится изучению конкретных деловых ситуаций (Casestudy), где
студенты могут проявить свое творческое мышление и предложить
альтернативные решения рассматриваемых проблем.
Задания к текстам способствуют развитию различных приемов
ознакомительного и аналитического чтения. Разработаны задания
на развитие навыков продуктивной письменной речи.
В процессе преподавания используются элементы интенсивных
методов обучения. Так, студентам предлагаются адреса сайтов в
Интернете в качестве источника дополнительной информации при
работе над модулем.
Формы учебной деятельности:

• Аудиторная работа.
• Самостоятельная работа.
Unit 1. About Marketing in General
1. Leadin
1) What do you understand by the word “marketing”? What do
you already know about marketing? In pairs or small groups,
summarize and discuss this information within 5 sentences.
2) Here are 5 definitions of marketing. Do you agree with all
definitions? Which of them do you think is the most accurate?
Give reasons for your choice.
• Marketing is the term given to all the different activities in-
tended to make and attract a profitable demand for a product.
• Marketing means that you don’t have to worry about selling
your product, because you know it satisfies a need.
• Marketing is a company’s choice of what goods and services
to offer, which is based on the goal of satisfying consumers’
needs.
• Marketing is sale, production distribution, which is producer
centred only.
• Marketing is a general term used to describe all the various
activities involved in transferring goods and services from
producers to consumers.
2. Key Vocabulary
1) to put smth on the market
2) marketing
3) a customer
7
4) a service
5) to benefit (from)
6) recruitment
7) to acquire
8) economy
9) advertising
10) to convince (smb of smth/to do smth)
11) sustainable competitive advantage (SCA)
12) to execute
13) to compete
14) to meet smb’s expectations and desires
15) promotion
16) distribution
17) branding
18) retailing
19) a transaction
20) to have an impact (on)
1) Consult a dictionary and write out the transcription and Rus-

sian equivalents of these words. Then practise reading them.
2) Make 3–5 sentences of your own with the words (groups of

words) from the Key Vocabulary.
3. Reading
Read the following text and highlight the information, which is
already known/unknown to you. Compare and discuss it with
your partner.
What is Marketing?
Marketing begins long before a product or service is put on the market.
It combines market research, new product development, distribution,
advertising, promotion, product improvement, and so on.
A marketfocused, or customerfocused, organization first determines
what its potential customers desire, and then builds the product or service.
Marketing theory and practice is justified in the belief that customers
8
use a product or service because they have a need, or because it provides

a perceived benefit.
Two major factors of marketing are the recruitment of new customers
(acquisition) and the retention and expansion of relationships with exist-
ing customers (base management).
Once a marketer has converted the prospective buyer, base manage-
ment marketing takes over. The process for base management shifts the
marketer to building a relationship, nurturing the links, enhancing the
benefits that sold the buyer in the first place, and improving the product/
service continuously to protect the business from competitive encroach-
ments.
Marketing methods are informed by many of the social sciences,
particularly psychology, sociology, and economics. Anthropology is also
a small, but growing, influence. Market research underpins these activi-
ties. Through advertising, it is also related to many of the creative arts.
For a marketing plan to be successful, the mix of the four Ps must re-
flect the wants and desires of the consumers in the target market. Trying to
convince a market segment to buy something they don’t want is extremely
expensive and seldom successful. Marketers depend on marketing research,
both formal and informal, to determine what consumers want and what
they are willing to pay for it. Marketers hope that this process will give
them a sustainable competitive advantage (SCA). Marketing management
is the practical application of this process. The offer is also an important
addition to the 4P’s theory.
Within most organizations, the activities encompassed by the mar-
keting function are led by a Vice President or Director of Marketing. A
growing number of organizations, especially large US companies, have a
Chief Marketing Officer (CMO) position, reporting to the Chief Execu-
tive Officer (CEO).
The American Marketing Association (AMA) states, “Marketing is
the process of planning and executing the conception, pricing, promotion,
and distribution of ideas, goods, and services to create exchanges that
satisfy individual and organizational objectives.”
Two Levels of Marketing

Strategic Marketing attempts to determine how an organization
competes against its competitors in a market place. In particular, it aims
at generating a competitive advantage relative to its competitors.
9
Operational Marketing executes marketing functions to attract and

keep customers and to maximize the value derived for them, as well as
to satisfy the customer with prompt services and meeting the customer
expectations. Operational Marketing includes the determination of the
marketing mix.
The Four Ps
In popular usage, “marketing” is the promotion of products, especially
advertising and branding. However, in professional usage the term has
a wider meaning which recognizes that marketing is customer centered.
Products are often developed to meet the desires of groups of customers or
even, in some cases, for specific customers. E. Jerome McCarthy1 divided
marketing into four general sets of activities. His typology has become
so universally recognized that his four activity sets, the Four Ps, have
passed into the language.
The four Ps are:
• Product: The product aspects of marketing deal with the speci-
fications of the actual goods or services, and how it relates to the
end user’s needs and wants. The scope of a product generally
includes supporting elements such as warranties, guarantees and
support.
• Pricing: This refers to the process of setting a price for a product,
including discounts. The price need not be monetary — it can
simply be what is exchanged for the product or services, e.g. time,
energy, psychology or attention.
• Promotion: This includes advertising, sales promotion, publicity,
and personal selling, and refers to the various methods of promot-
ing the product, brand, or company.
• Placement or distribution refers to how the product gets to the
customer; for example, point of sale placement or retailing. This
fourth P has also sometimes been called Place, referring to the
channel by which products or services are sold (e.g. online vs.
1 E. Jerome McCarthy is a professor at Michigan State University, USA, and an
internationally known marketing consultant. He is one of the authors of the influential

book “Basic Marketing” (now in its 16th edition).
10
retail), which geographic region or industry, to which segment

(young adults, families, business people), etc.
These four elements are often referred to as the marketing mix, which
a marketer can use to craft a marketing plan. The four Ps model is most
useful when marketing low value consumer products. Industrial prod-
ucts, services, high value consumer products require adjustments to this
model. Services marketing must account for the unique nature of services.
Industrial or B2B marketing must account for the long term contractual
agreements that are typical in supply chain transactions. Relationship
marketing attempts to do this by looking at marketing from a longterm
relationship perspective rather than individual transactions.
The Seven Ps
As well as the standard four Ps (Product, Pricing, Promotion and
Place), services marketing calls upon an extra three, totaling seven and
known together as the extended marketing mix. These are:
• People: Any person coming into contact with customers can have
an impact on overall satisfaction. Whether as part of a support-
ing service to a product or involved in a total service, people are
particularly important because, in the customer’s eyes, they are
generally inseparable from the total service. As a result of this, they
must be appropriately trained, well motivated and the right type
of person. Fellow customers are also sometimes referred to under
‘people’, as they too can affect the customer’s service experience,
(e.g., at a sporting event).
• Process: This is the process(es) involved in providing a service
and the behaviour of people, which can be crucial to customer
satisfaction.
• Physical evidence: Unlike a product, a service cannot be expe-
rienced before it is delivered, which makes it intangible. This,
therefore, means that potential customers could perceive greater
risk when deciding whether to use a service. To reduce the feeling
of risk, thus improving the chance for success, it is often vital to
offer potential customers the chance to see what a service would
be like. This is done by providing physical evidence, such as case
studies, testimonials or demonstrations.
11
4. Comprehension Check
1) According to the text and your own common knowledge, which
of these diagrams/charts best illustrates a company that has
adopted the marketing concept? Explain your choice.
A B
C D
2) Refer closely to the article and answer the following questions:

a) What is the difference between strategic and operational market-
ing?
b) What are the most important elements of marketing?
c) What are the two major factors of marketing? Do you agree with
the idea suggested?
12
d) What is ‘marketing mix’?

e) What does ‘sustainable competitive advantage’ mean? Suggest
some examples from reality.
3) Say whether these statements are true or false. Correct the

false statements.
1) Psychology is the main social science in marketing.
2) Marketing research can be formal and informal.
3) Usually a Chief Marketing Officer reports to a Chief Execu-
tive Officer.
4) Advertising is an element of promotion.
5) 7 Ps are often referred to as the marketing mix, which a
marketer can use to craft a marketing plan.
6) Like a product, a service can be trialed before it is delivered,
which makes it intangible.
7) The four Ps model is most useful when marketing low value
consumer products.
8) Physical evidence is one element of 7 Ps.
5. Vocabulary Development
1) Fill in the table for the words of the key vocabulary and some
new words from the text (10–12 items). The example is given
to you.
Word Definition Equivalent Synonyms Antonyms Derivatives
benefit something выгода; advantage, disadvan- beneficiate,

that im- польза; favour, gain, tage, harm, beneficial,
proves or прибыль; profit loss beneficent
promotes преимуще-
ство
1, 2, 3,...
2) Explain the difference between the words ‘economy’ and ‘eco-

nomics’, ‘economic’ and ‘economical’.
3) Find 10 words from the key vocabulary in the word square.

Some letters may be used several times.
13
o c m p k a r a
n m a r k e t n
v i c o t c a s
c n p m i o n o
e t e o n v y m
c u s t o m e r
a g f i t p s e
e n e o h c r a
b r a n d i n g
4) Here are some additional words to use. Match up the words on

the left with their definitions on the right:
1. cash a. to manage to do; achieve; complete
2. to strive b. a series of observations, measurements, or
facts; information
3. to respond (with) c. the percentage of a total market, in terms
of either value or volume, accounted for
by the sales of a specific brand
4. to evaluate d. to have or keep smth with or within the
hands
5. data e. to carry out; put into action; perform
6. to accomplish f. the income or reward accruing to a suc-
cessful entrepreneur and held to be the
motivating factor of all economic activity
in a capitalist economy
7. to hold g. to act in reply; react
8. to execute h. banknotes and coins, especially in hand or
readily available
9. profit i. to ascertain or set the amount or value of
smth
10. market share j. to make a great and tenacious effort
Insert the words (in the necessary form) from the previous task
in the text below, which gives you more information about marketing
classification.
14
MacroMarketing and MicroMarketing
Macromarketing refers to the overall social process that directs the

flow of goods and services from producer to consumer. It is the economic
system that determines what and how much is to be produced and distrib-
uted by whom, when, and to whom. E. Jerome McCarthy and William D.
Perreault, Jr. identified eight universal macromarketing functions that
make up the economic process:
• buying, which refers to consumers seeking and a) _____ goods
and services;
• selling, which involves promoting the offering;
• transporting, which refers to the movement of goods from one
place to another;
• storing, which involves b) _____ goods until customers need
them;
• standardization and grading, which entails sorting products ac-
cording to size and quality;
• financing, which delivers the c) _____ and credit needed to per-
form the first five functions;
• risk taking, which involves bearing the uncertainties that are part
of the marketing process;
• market information, which usually refers to the gathering, analysis,
and distribution of d) _____ necessary to e) _____ these market-
ing functions.
In contrast, micromarketing refers to the activities performed by the
individual providers of goods and services within a macromarketing sys-
tem. Such organizations or businesses use various marketing techniques to
f) objectives related to g) _____, h) _____, cash flow, and other economic
factors that can enhance their well being and position in the marketplace.
The micromarketing function within an entity is commonly referred
to as marketing management. Marketing managers i) _____ to get their
organizations to anticipate and accurately determine the needs and wants
of customer groups. Afterward they seek to j) _____ effectively with a
flow of needsatisfying goods and services. They are typically charged
with planning, implementing, and then measuring the effectiveness of
all marketing activities.
15
5) There is a logical connection among three of the four words in each

of the following groups. Which is the odd one out, and why?
a) Distribution — promotion — pricing — retention
b) Benefit — profit — data — cash
c) Promotion — competition — advertising — branding
d) impact — customer — enduser — product
6) Study the Useful Language phrases. Then discuss the second

text in pairs using the phrases.
Clarifying
What exactly do you mean by ...?
Sorry, I don’t follow you.
Are you saying that ...?
Could you be more specific, please?
I’m afraid I didn’t quite catch ...
Emphasising
I’d just like to highlight ...
What I’d like to say …
Windingup
Finally, ...
Before I finish I’d like to run through the main points once again.
To make a long story short, ...
To finalize the matter, ...
6. Skills Focus
On the basis of the both texts make a conversation. Imitate a
dialogue as if Student A speaks English and Student B speaks Russian
through the interpreter (Student C). Then exchange the roles and try
again. Employ as much Key Vocabulary as possible.
7. Writing
1) Write a summary covering the information of the both texts,

using 50–60 words.
2) Render into English the following passage.
16
Организация, которая ориентирована на рынок или потребителя,

определяет в первую очередь потребности клиентов, и только после
этого разрабатывает сам продукт и услуги. Маркетинговая теория и
практика подтверждают, что покупатели используют продукт или
услугу, потому что у них есть потребность в них или это обеспечивает
ощутимую выгоду.
Два главных фактора в маркетинге — это привлечение новых
клиентов и поддержание или расширение отношений с уже суще-
ствующими потребителями (основной менеджмент).
Основной менеджмент вступает в силу, как только торговец
привлек возможного покупателя. Процессы, которые происходят в
основном менеджменте, помогают продавцу в целях защиты бизнеса
от конкурентов построить взаимоотношения, укрепить связи, увели-
чить прибыль от проданного товара и непрерывно улучшать продукт
и услуги. Методы маркетинга можно найти во многих социальных
науках, особенно в психологии, социологии и экономике. Влияние
антропологии не большое, но оно становится все сильнее и сильнее.
Исследования рынка поддерживают эти действия. Через рекламу ме-
тоды маркетинга также связаны со многими видами искусств.
Чтобы план маркетинга был успешным, соотношение «4Р»
должно отражать нужды и желания потребителей на целевых рын-
ках. Попытка убедить сегмент маркетинга купить чтото, что им не
нужно — чрезвычайна дорога и в редких случаях успешна. Продавцы
зависят от маркетинговых исследований, как официальных, так и
неофициальных, с целью определить нужды потребителей и что они
собираются заплатить за них. Продавцы надеются, что этот процесс
даст им устойчивую конкурентоспособность. Маркетинговый менед-
жмент — практическое представление этого процесса. Предложение
является важным дополнением к теории «4Р».
В большинстве организаций ВицеПрезидент или Директор по
маркетингу управляет маркетинговыми функциями. Растущее чис-
ло организаций, особенно крупные американские компании, имеют
руководителя службы маркетинга, который находится в подчинении
главного исполнительного директора.
Американская Ассоциация Маркетологов заявляет: «Маркетинг —
это процесс планирования и выполнения концепции, оценки, поощре-
ния и распределения идей, товаров и услуг для создания обмена,
который удовлетворял бы потребности личности и организации».
17
Unit 2. Market Research
1. Leadin
1) In pairs, share your vision on market research. Draw on the
Key Vocabulary of Unit 1.
2) Think over the main functions of market research in marketing
and the process of selling in general.
2. Key Vocabulary
1) market research
2) an entrepreneur
3) to make a decision
4) feasibility
5) annual budget
6) annual report
7) coherent
8) to do smth in response to smth
9) a survey
10) chamber of commerce
11) to solve a problem
12) to decide on smth
13) primary and secondary information
14) emotional appeal
15) target audience

sian equivalents of these words. Then practice reading them.
18

3. Reading
Read the article and compare it with your ideas to the second
task of Leadin.
Market Research
The term ‘market research’ encompasses a number of activities that are
designed to connect marketers to consumers through information gather-
ing and evaluation. Market research provides businesses with information
about their customers, their competitors, and their overall industry. It
is commonly used to identify marketing problems and opportunities, as
well as to develop and evaluate the effectiveness of marketing strategies.
Market research can help entrepreneurs evaluate the feasibility of a start up
venture before investing a great deal of time and capital, for example, as
well as assist them in effectively marketing their goods and services.
Employing such marketing strategies as market segmentation and
product differentiation would be nearly impossible without first conduct-
ing market research.
Although market research can be costly, it is often even more costly
to make erroneous decisions based upon bad or inadequate information. In
fact, an average business spends between 25 and 50 per cent of its annual
marketing budget on research activities. There is a great deal of helpful
information available to entrepreneurs who know where to look, and there
are many consultants, advertising firms, and market research specialists
who offer their services to businesses.
The information gathered through market research can be divided
into two main categories. The first category — primary information — gen-
erally does not exist in a coherent form before the marketer gathers it in
response to a particular question or problem. The most common methods
of gathering primary market research information are through direct mail,
telemarketing, and personal interviews.
The other category — secondary information — has already been
compiled and organized by a source other than the marketer. Rather
than looking at a specific marketing problem faced by an individual
19
company, secondary information generally tracks trends within a market,

an industry, a demographic group, or a geographic region. Some possible
sources of secondary market research information include government
reports, trade association records, newspaper and magazine surveys,
universitysponsored research, local chamber of commerce records, online
services, and competitors’ annual reports.
Market research can provide business owners with the information
they need to answer a wide range of questions, including: Who are my
customers? Where are they located? How much and how often will they
buy? and What product attributes do they prefer?
Given the importance of market research — and its potential cost
— experts recommend that businesses follow a stepbystep approach in
order to gain the most benefits from their research activities. The first
step in the market research process is to define the marketing problem
to be addressed. Next, a marketer should determine what information
is needed to solve the problem, as well as what sources should be used to
acquire the information. Many businesses make a preliminary investiga-
tion at this early stage in order to give their definition of the problem
more focus and to develop tentative answers that can be tested during the
next stage of the process. The third step involves planning the research.
This step includes selecting the techniques to be used for gathering data
and deciding on an appropriate group, or sample, to be included in the
research. Fourth, a marketer actually gathers the necessary data. The fifth
step involves analyzing and interpreting the information that has been
gathered. Finally, the marketer reaches a conclusion about the market-
ing problem and translates the findings into changes in the firm’s overall
marketing strategy.

a) What information can market research provide business own-
ers with?
b) What is the difference between primary and secondary infor-
mation gathered through market research?
c) Name some possible sources of primary and secondary informa-
20
tion. Which of them are more accurate and useful?
2) Discuss the following statements from the text, illustrating

your arguments with examples:
a) “Although market research can be costly, it is often even more
costly to make erroneous decisions based upon bad or inad-
equate information.”
b) “… experts recommend that businesses follow a stepbystep
approach in order to gain the most benefits from their research
activities.”
to you.
costly of great price дорогой, expensive, cheap, cost, costs

or value; ценный, highpriced, cutprice,
entailing дорогосто- overpriced inexpensive
great loss or ящий
sacrifice
1, 2,...
2) Find definitions to the following words and word combinations.

Make your own sentences with them.
Opinion poll; validity; quantitative research; extrapolation; sta-
tistical analysis; pilot survey; field work; unstructured survey;
qualitative research; cluster sampling.
3) Find 10 words from the key vocabulary and the previous task
in the word square. Each letter may be used several times.
21
s g k d s l a e
a n f n u a l p
m i e n r e t p
p l a a p e n a
a o s u r v e y
i d i t e u r e
l a b y n e u h
p v i t i e v o
o l l i s o l c
4) Here are some main types of market research. Match them with
the descriptions below.
closedend audience scanner openend ques- postsales or cus-

questionnaire research research tionnaire tomer satisfaction
research
focus groups brand re- product psychological database

search research research research
Types of Market Research
1) _________ is a research on who is listening, watching, and reading

is important to marketers of television and radio programmes and
print publications — as well as to advertisers who wish to reach a
certain target audience with their message.
2) ___________ includes simple, inperson research such as taste

tests conducted in malls and in the aisles of grocery stores, as well as
elaborate, longterm ‘‘beta testing’’ of hightech products by selected,
experienced users.
3) ____________ helps advertisers to find out whether consumers have

strong brand loyalty, whether the brand has any emotional appeal and
what the consumer thinks could be improved about the brand.
22
4) ___________ tries to determine why people buy certain products

based on a profile of the way the consumers live their lives.
5) ___________ records what was actually purchased. This is valuable

information an advertiser can use to help plan an ongoing marketing
strategy.
6) ___________ shows up on thousands of lists and databases that are

regularly crossreferenced to mine nuggets of marketing research. It
allows companies to build personal relationships with people who
have proven from past purchases that they are potential customers.
7) Many companies now wait a few days or weeks, then contact custom-
ers with survey, questionnaires or telephone calls. Companies want
reassurance that the customer enjoyed the buying experience and that
the product or service has met the buyer’s expectations. The reason
behind ___________ is to ensure that current customers are happy,
will consider themselves future customers, and will spread positive
word of mouth messages about the product and company.
8) ___________ includes such common activities as filling out a com-

ment card at a restaurant or responding to a telephone survey. The
person being surveyed cannot expound on their answers. Such surveys
usually ask for ‘‘yes’’ or ‘‘no’’ responses or for measures of multiple
choice opinion.
9) Over time, market researchers have grown increasingly aware that

people often have opinions that do not fit into a multiple choice
questionnaire. To capture these opinions and try to analyze them,
researchers are shifting toward ________ — asking people to say
exactly what is on their minds.
10) Inperson, sitdown discussions around a table with groups of con-

sumers, wouldbe consumers, neverbuyers, or any other demographic
group, a company wishes to bring together are called __________.
This allows executives to observe the proceedings unobtrusively or
to videotape the session for further study.
23
5) Study the Useful Language phrases. Then render the second

text using the phrases.
Starting your position

I think I ought to say right from the start that ...
I feel I should point out to you that ...
Perhaps I can begin by saying that ...
We must bear in mind the fact that ...
The idea behind the expression ... is ... that ...
As a matter of fact, ...
Delivering the message
Let us clear first of all over …
The first point to make is that …
The next point is that …
Initially …
The way I see it …
From what I know …
It‘s absolutely true that …
If I remember correctly …
Windingup
To sum up what has been mentioned ...
All this suggests that
6. Skills Focus
In small groups, roleplay the following situation using the

information of the both texts. You work in a marketing depart-
ment of a large company. Your director decided to introduce
a new product to the market. You and some other people from
your department were asked to do a market research and
suggest the most suitable image of the brandnew. Plan the
research with your team. Suppose you have got the necessary
statistics concerning the consumers’ preferences. Then report
on the result to your director.
Note: Choose any product you like; allocate the responsibilities.
Employ as much Key Vocabulary as possible.
24
7. Writing
1) Write a short letter (100–150 words) to your friend from related

department. Inform him or her of the market research you’ve
recently done.
Методы маркетинговых исследований
Методологически все маркетинговые исследования используют

четыре вида дизайна, а именно:
a) качественное маркетинговое исследование — обычно ис-
пользуется для познающих целей — маленькое количество
респондентов — не может быть обобщено на все население
— статистическая значимость и доверительный уровень не
может быть вычислен — примерами являются групповые
обсуждения, глубинные интервью и проективные техники;
b) количественное маркетинговое исследование — обычно ис-
пользуется для получения заключений — проверяет конкрет-
ные гипотезы — использует технику случайной выборки для
того, чтобы сделать выводы обо всем населении — затрагивает
большое количество респондентов — примерами являются
опрос и анкетирование;
c) наблюдательные техники — исследователь наблюдает со-
циальные явления в естественных условиях — наблюдение
может быть перекрестным (все наблюдения делаются в одно
время) или последовательным (наблюдения происходят в не-
сколько временных периодов) — примерами являются анализ
по использованию продукта; и
d) экспериментальные или опытные техники — исследователь
создает почти искусственное окружение, пытаясь контро-
лировать ложные факторы, которые управляют по крайней
мере одной переменной — примерами являются лаборатории
покупок и пробный маркетинг.
Исследователи часто используют более одного дизайна. Они мо-
гут начать со вторичного исследования, чтобы получить исходную
информацию, после чего провести групповые обсуждения (дизайн
25
качественного маркетингового исследования) чтобы исследовать

проблему. В заключение, они могут провести полный общенациональ-
ный опрос (дизайн количественного маркетингового исследования),
чтобы разработать конкретные рекомендации для клиента.
Unit 3. Market Segmentation
1. Leadin
1) How would you explain the words “segment” and “segmenta-

tion”? What do you think they mean in economy and marketing
in particular? Suggest your own definitions.
2) Work in small groups and discuss:
a) the role of market segmentation;
b) who needs to segment the market;
c) what information is necessary to segment the market.
2. Key Vocabulary
1) market segmentation
2) to fit
3) homogenous
4) a market niche
5) feasible
6) to divide the overall market into segments
7) to match smth to the needs of smth
8) to implement a strategy
9) to fall into distinct clusters
10) to yield
11) a trait
12) a benefit
13) a pitfall
14) an approach
27
1) Consult a dictionary and write out the transcription and Russian

equivalents of these words. Then practise reading them.
3. Reading
Read the following text, find the answers to the questions given
in Leadin and compare them with your suggestions.
Market Segmentation
Market segmentation is the science of dividing an overall market
into key customer subsets, or segments, whose members share similar
characteristics and needs. Because it involves significant market research,
market segmentation can be costly. But it is especially important for those
businesses, which lack the resources to target large aggregate markets or
to maintain a wide range of differentiated products for varied markets.
Market segmentation allows a business to develop a product and a mar-
keting mix that fit a relatively homogenous part of the total market. By
focusing its resources on a specific customer base in this way, a business
may be able to carve out a market niche that it can serve better than its
competitors.
Market segmentation uses the strategies that range from mass mar-
keting — in which a single product is offered to all customers in a market
— to onetoone marketing — in which a different product is specifically
designed for each individual customer in a market. Most businesses real-
ize that since no two people are exactly alike, it is unlikely that they will
be able to please all customers in a market with a single product. They
also realize that it is rarely feasible to create a distinct product for every
customer. Instead, most businesses attempt to improve their odds of
attracting a significant base of customers by dividing the overall market
into segments, then trying to match their product and marketing mix
more closely to the needs of one or more segments. A number of customer
characteristics, known as segmentation bases, can be used to define mar-
ket segments. Some commonly used bases include age, gender, income,
geographical area, and buying behavior.
28
Segmentation Bases
In order to successfully implement a market segmentation strategy,
a business must employ market research techniques to find patterns of
similarity among customer preferences in a market. Ideally, customer
preferences will fall into distinct clusters based upon identifiable charac-
teristics of the population.
To be pursued by a marketer, according to Alexander Hiam and
Charles D. Schewe in “The Portable MBA in Marketing,” the customer
segments should be:
1) identifiable and measurable;
2) large enough to be profitable;
3) reached effectively (for example, its members must tend to view
the same television programs, read the same publications, or shop
in the same places);
4) responsive to marketing;
5) stable and not expected to change quickly.
A company might elect to serve a single market segment or attempt
to meet the needs of several segments.
Determining how to segment a market is one of the most important
questions a marketer must face. Creative and effective market segmentation
can lead to the development of popular new products, but unsuccessful
segmentation can cost a great deal of money and still not yield the desired
results. There are three main types of segmentation bases for businesses
to consider — descriptive bases, behavioral bases, and benefit bases — each
of which breaks down into numerous potential customer traits.
Descriptive bases for market segmentation include a variety of factors
that describe the demographic and geographic situation of the custom-
ers in a market. They are the most commonly used segmentation bases
because they are easy to measure, and because they often serve as strong
indicators of consumer needs and preferences. Some of the demographic
variables that are used as descriptive bases in market segmentation might
include age, gender, religion, income, and family size, while some of the
geographic variables might include region of the country, climate, and
population of the surrounding area.
Behavioral bases for market segmentation are generally more dif-
ficult to measure than descriptive ones, but they are often considered
to be more powerful determinants of consumer purchases. They include
those underlying factors that help motivate consumers to make certain
29
buying decisions, such as personality, lifestyle, and social class. Behavioral

bases also include factors that are directly related to consumer purchases
of certain goods, such as their degree of brand loyalty, the rate at which
they use the product and need to replace it, and their readiness to buy
at a particular time.
Businesses that segment a market based on benefits hope to identify
the primary benefit that consumers seek in buying a certain product, then
supply a product that provides that benefit. This segmentation approach
is based upon the idea that market segments exist primarily because
consumers seek different benefits from products, rather than because of
various other differences between consumers. One potential pitfall to
this approach is that consumers do not always know or cannot always
identify a single benefit that influences them to make a purchase decision.
Many marketers use a combination of bases that seem most appropri-
ate when segmenting a market. Using a single variable is undoubtedly
easier, but it often turns out to be less precise.
4. Сomprehension Check
1) Answer the questions to the text:

a) What is the difference between mass and onetoone market-
ing?
b) What may be the result of unsuccessful segmentation?
c) What is the subject matter of each segmentation basis (descrip-
tive, behavioural and benefit) mentioned in the text?
2) Discuss the following statements, illustrating your arguments

with examples:
a) Determining how to segment a market is one of the most im-
portant questions a marketer must face.
b) In order to successfully implement a market segmentation strat-
egy, a business must employ market research techniques to find
patterns of similarity among customer preferences in a market.
c) Market segmentation is especially important for those busi-
nesses, which lack the resources to target large aggregate
markets or to maintain a wide range of differentiated products
for varied markets.
30
d) Many marketers use a combination of bases that seem most ap-

propriate when segmenting a market. Using a single variable is
undoubtedly easier, but it often turns out to be less precise.
3) Have a close look at the second paragraph about segmentation

bases and comment on the requirements customer segments
should meet.
1) Fill in the table for the words of the key vocabulary and some new
words from the text (10–12 items). The example is given to you.
distinct easily sensed отчётливый; clear; indistinct, distinction,

or under- внятный, precise, vague, un- distinctive,
stood чёткий, intelligible, intelligible, distinctly,
ясный understand- ambiguous, distinctness,
able disputable, distinctive-
dubious ness
1, 2,...
2) Find 10 words from the key vocabulary and the text “Market
segmentation” in the word square. Some letters may be used
several times.
s c l u s t e r
e v f t r a i t
g a d b a j l p
m r i a b l e i
e y i e l d h t
n s t h a e c f
t o l c p c a a
a c y i p r o l
t i o n f i t l
31
3) How do you imagine the segmentation process? What steps

should it consist of? Here are 6 steps suggested by Alexander
Hiam and Charles D. Schewe. Arrange them in the logical
order.
Segmentation Process
Hiam and Schewe have identified six steps that companies should
take in the market segmentation process.
The_____ step in the market segmentation process is to decide which
segment or segments to serve. In targeting a particular segment, a marketer
should look for opportunities (i.e., customers with unsatisfied wants and
needs) that provide a good match for the organization and its resources.
It is important that the marketer consider not only the size and potential
profitability of a market segment, but also whether the company’s skills,
technologies, and objectives would enable it to meet the needs of that
segment better than its competitors.
The______ step in the market segmentation process is actually
collecting and analyzing data, which involves applying market research
tools. The goal in analyzing the data is to identify market segments that
are internally homogeneous, yet are distinctly heterogeneous with respect
to other segments.
The _____ step is to develop a product and marketing plan that
will appeal to the selected market segment. This involves identifying the
product attributes that are most important to consumers in the segment,
and developing a marketing strategy that will attract their attention. In
fact, market segmentation can be usefully applied during the earliest stages
of product design, when a company first identifies who its target customer
will be in terms of demographic, geographic, and behavioral characteristics.
The _____ step in the process is to decide which variables to use in
segmenting the market. Many companies fall into the trap of collecting
data on as many variables as possible and then attempting to sort through
it later to draw meaningful conclusions. Instead, Hiam and Schewe recom-
mend that marketers use their knowledge of the market to select a few
relevant variables in advance. This approach is generally less expensive
and will likely provide more useful results.
The _____ step is to determine the boundaries of the market. In
completing this step, a marketer should use a formal business plan to
32
develop a broad definition of their business, and then consider the offer-
ings of both direct and indirect competitors to gain information about
the basic needs of consumers in the market.
The _____ step is to develop a detailed profile of each market seg-
ment, which involves selecting those variables that are most closely related
to consumers’ actual buying behavior.
In general, customers are willing to pay a premium for a product that
meets their needs more specifically than does a competing product. Thus
marketers who successfully segment the overall market and adapt their
products to the needs of one or more smaller segments stand to gain in terms
of increased profit margins and reduced competitive pressures.
6. Skills Focus
1) Roleplay a conversation between a senior consultant and a
newcomer. Discuss the process of market segmentation in-
cluding its bases and main steps. Share your ideas about its
efficiency. Propose possible improvements.
2) Group in small teams. Imagine that you work in consulting
firms, which offer assistance with market segmentation. Your
regular clients asked you to help them segment the market
and thus establish their own niche (it is up to you to choose
the type of products the clients offer). In each team analyze
the current market situation from the point of view of different
segmentation bases, choose some market segment which suits
your clients’ interests and prepare a brief report on the results
of your research. Use the vocabulary and the information about
market segmentation, its bases and steps you have studied in
this unit to the utmost. In the end listen to all reports and reveal
the best one.
7. Writing
Write a summary covering the information of the both texts,
using 150–170 words.
Add your personal commentary.Unit 4. Business Strategy
33
Unit 4. Business Strategy
1. Leadin
Note: ‘a strategy’ is a plan or method for achieving something, espe-
cially over a long period of time; ‘strategy’ means the skill of planning how
to achieve something. (from Macmillan English Dictionary for advanced
learners, New Edition)
1) Work in small groups and discuss the following:
a) In what spheres of life can we use the notion of strategy?
b) What may ‘a strategy’ mean in business and marketing in
particular?
c) Is it easy to formulate an effective business strategy?
2) Comment on the definitions. Which of them do you prefer?

a) a strategy — a course of action, including the specification of
resources required, to achieve a specific objective;
b) a strategy — a plan of future actions;
c) a strategy — a pattern or plan that integrates an organization’s
major goals, policies, and action sequences into a cohesive
whole;
d) a strategy — continually adapting to change.
2. Key Vocabulary
1) a strategic triangle
2) hierarchical
34
3) internal and external forces

4) assets
5) an executive
6) personnel
7) to implement the chosen strategy
8) societal expectations
9) to develop a realistic and feasible set of goals and policies
10) generic strategies
1) Consult a dictionary and write out the transcription and Russian

equivalents of these words. Then practise reading them.

3. Reading
Read the first part of the article about business strategy and think
which groups below should be involved in construing strategy:
• shareholders
• boards of directors
• senior managers
• middle and junior managers
• other employees
• government representatives
• trade union representatives
• suppliers
• customers
Business Strategy
As James Brian Quinn indicated in The Strategy Process: Concepts and

Contexts, ‘‘a strategy is the pattern or plan that integrates an organiza-
tion’s major goals, policies, and action sequences into a cohesive whole. A
wellformulated strategy helps to marshal and allocate an organization’s
resources into a unique and viable posture based on its relative internal
competencies and shortcomings, anticipated changes in the environment,
and contingent moves by intelligent opponents.’’ All types of businesses
35
require some sort of strategy in order to be successful; otherwise their

efforts and resources will be spent haphazardly and likely wasted.
Formulation of an effective business strategy requires managers
to consider three main players — the company, its customers, and the
competition — according to Kenichi Ohmae in his book The Mind of the
Strategist. These three players are collectively referred to as the strategic
triangle. ‘‘In terms of these three key players, strategy is defined as the
way in which a corporation endeavors to differentiate itself positively from
its competitors, using its relative corporate strengths and weaknesses to
better satisfy customer needs,’’ Ohmae explained.
Quinn noted that an effective business strategy should include three
elements: 1) a clear and decisive statement of the primary goals or objec-
tives to be achieved; 2) an analysis of the main policies guiding or limiting
the company’s actions; and 3) a description of the major programs that
will be used to accomplish the goals within the limits.
In addition, it is important that strategies include only a few main
concepts or thrusts in order to maintain their focus. They should also
be related to other strategies in a hierarchical fashion, with each level
supporting those above and below. Finally, strategies should attempt to
build a strong yet flexible position for the company so that it may achieve
its goals whatever the reaction of external forces. ‘‘Strategic decisions
are those that determine the overall direction of an enterprise and its
ultimate viability in light of the predictable, the unpredictable, and the
unknowable changes that may occur in its most important surrounding
environments,’’ Quinn stated.
Limits on Strategic Choices

The strategic choices available to a company are limited; rather, they
depend upon the company’s capabilities and its position in the market-
place. ‘‘At the broadest level formulating competitive strategy involves
the consideration of four key factors that determine the limits of what
a company can successfully accomplish,’’ Michael E. Porter wrote in his
classic book Competitive Strategy. Two of these limiting factors are inter-
nal, and the other two are external. The internal limits are the company’s
overall strengths and weaknesses and the personal values of its leaders.
‘‘The company’s strengths and weaknesses are its profile of assets and
skills relative to competitors, including financial resources, technological
posture, brand identification, and so on,’’ Porter stated. ‘‘The personal
36
values of an organization are the motivations and needs of the key

executives and other personnel who must implement the chosen strategy.’’
The external factors limiting the range of a company’s strategic
decisions are the competitive environment and societal expectations
under which it operates. ‘‘Industry opportunities and threats define the
competitive environment, with its attendant risks and potential rewards,’’
Porter noted. ‘‘Societal expectations reflect the impact on the company
of such things as government policy, social concerns, evolving mores, and
many others. These four factors must be considered before a business can
develop a realistic and feasible set of goals and policies.’’
Once a company has analyzed the four factors, it may then begin
developing a strategy to compete under or attempt to change the situ-
ation it faces. The approach to strategy development recommended by
Porter involves:
1) identifying the company’s current strategy;
2) revealing underlying assumptions about the company’s position,
its competitors, or industry trends affecting it;
3) analyzing the threats and opportunities present in the external
environment;
4) determining the company’s own strengths and weaknesses given
the realities of its environment;
5) proposing feasible alternatives;
6) choosing the one that best relates the company’s situation to its
environment.
1) Refer closely to the article and answer the questions:

a) What is ‘a strategic triangle’ according to Kenichi Ohmae?
b) Why do you think the strategic choices available to a company
should be limited?
c) What are the key internal and external factors that, according
to Michael E. Porter, determine the limits of what a company
can successfully accomplish?
2) Comment on the three elements of an effective business strat-

egy, which are stated by James Brian Quinn.
37

a) ‘‘Strategic decisions are those that determine the overall direc-
tion of an enterprise and its ultimate viability in light of the
predictable, the unpredictable, and the unknowable changes
that may occur in its most important surrounding environ-
ments.’’
b) The strategic choices available to a company are limited; rather,
they depend upon the company’s capabilities and its position
in the marketplace.
c) ‘‘Societal expectations reflect the impact on the company of
such things as government policy, social concerns, evolving
mores, and many others. These four factors must be considered
before a business can develop a realistic and feasible set of goals
and policies.’’
1) Complete the table with derivatives:

verb noun adjective
require
competition, competitor
develop
executive
strength
satisfy
effective
consideration
refer
decisive
2) Here is the second part of the article. It is devoted to generic

strategies.
a) Read the information concentrating on advantages and
disadvantages of each strategy.
b) In pairs, discuss the given strategies and choose the one
you would use in your business. Explain your choice.
38
Generic Strategies
The number of potential business strategies are probably as great
as the number of different businesses. Each distinct organization must
develop a strategy that best matches its internal capabilities and its situa-
tion with regard to the external environment. Still, many of the numerous
strategies pursued by businesses can be loosely grouped under three main
categories — cost leadership, differentiation, and focus. Porter termed
these categories ‘‘generic strategies,’’ and claimed that most companies use
variations of them, either singly or in combination, to create a defensible
position in their industry. On the other hand, companies that fail to target
their efforts toward any of the generic strategies risk to low profitability
and a lack of competitiveness.
Cost Leadership
The first generic strategy, overall cost leadership, can enable a
company to earn above average profits despite the presence of strong
competitive pressures. But it can also be difficult to implement. In a
company pursuing a lowcost strategy, every activity of the organization
must be examined with respect to cost. For example, favorable access to
raw materials must be arranged, products must be designed for ease of
manufacturing, manufacturing facilities and equipment must continually
be upgraded, and production must take advantage of economies of scale.
In addition, a lowcost strategy requires a company to implement tight
controls across its operations, avoid marginal customer accounts, and
minimize spending on advertising and customer service. Implemented
successfully in a pricesensitive market, however, a lowcost strategy can
lead to strong market share and profit margins.
Of course, a lowcost strategy, like any other strategy, also involves
risks. For example, technological changes may make the company’s invest-
ments in facilities and equipment obsolete. There is also the possibility
that other competitors will learn to match the cost advantages offered
by the company, particularly if inflation helps narrow the gap. Finally,
low cost producers risk focusing on cost to such an extent that they are
unable to anticipate necessary product or marketing changes.
Differentiation
Companies that pursue a strategy of differentiation try to create a
product or service that is considered unique within their industry. They
39
may attempt to differentiate themselves on the basis of product design or

features, brand image, technology, customer service, distribution, or several
of these elements. The idea behind a differentiation strategy is to attract
customers with a unique offering that meets their needs better than the
competition, and for which they will be willing to pay a premium price.
This strategy is intended to create brand loyalty among customers and thus
provide solid profit margins for the company. Although the company may
not be able to achieve a high market share using a differentiation strategy
— because successful differentiation requires a perception of exclusivity,
and because not all customers will be willing or able to pay the higher
prices — the increased profit margins should compensate. Naturally, there
are risks associated with committing to a differentiation strategy. For ex-
ample, competitors may be able to imitate the unique features, customers
may lose interest in the unique features, or lowcost competitors may be
able to undercut prices in a way that erodes brand loyalty.
Focus
Companies undertaking a focus strategy direct their full attention
toward serving a particular market, whether it is a specific customer group,
product segment, or geographic region. The idea behind the focus strategy
is to serve that particular market more effectively than competitors on
the basis of product differentiation, low cost, or both. Since focusing on
a small segment of the overall market limits the market share a company
can command, it must be able to make up for the lost sales volume with
increased profitability. The focus strategy, too, entails risks. For example,
there is always a possibility that competitors will be able to exploit sub-
markets within the strategic target market, that the differences between
the target market and the overall market will narrow, or that the high costs
associated with serving the target market will eliminate any advantage
gained through differentiation.
Each of the three generic strategies identified by Porter requires a
company to accumulate a different set of skills and resources. For example,
a company pursuing a lowcost strategy would likely have a much different
organizational structure, incentive system, and corporate culture than one
pursuing a differentiation strategy. The key to successful implementation
of one of the three generic strategies is to commit to it fully, rather than
take halfmeasures that do not distinguish the company in any way.
40
3) Here is a list of some other strategies a company may use. Find

some information about each strategy. With your class mates,
share and discuss what you have found out.
• a takeover
• a joint venture
• a merger
• an alliance
• a sell off
• a disposal
• acquisition
• integration
6. Skills Focus
In small groups, roleplay the following situation drawing on the
information and vocabulary of the both texts.
You and your group mates are the members of the company’s
board of directors. You all decided to reconstruct the business
and thus change the strategy.
Each student should choose one of the strategies mentioned above
and present it as the most suitable for the company. Organize
debates and finally accept the optimal one.
7. Writing
Write a short letter (150–200 words) to your friends from the
Marketing department. Inform them of the decisions made during
the recent discussion of the new business strategy. Ground the
choice of yours and describe the perspectives. Add your personal
commentary.
Unit 5. Business planning
1. Leadin
1) In pairs, discuss the following questions:

a) Why do people sometimes need to plan their life?
b) Do you often make plans? Why?
c) What do you usually plan?
d) Does planning always help you achieve your goals?
2) Do you know what a business plan is? What does it consist of?
What is the connection between a business plan and a strategy?
Exchange your ideas in class and make some conclusions.
3) In small groups, think over the role of planning in business and

marketing in particular. Enlist several main benefits of making
business plans.
2. Key Vocabulary
1) to achieve/attain/accomplish objectives/goals
2) a broad set of interrelated choices
3) to be implemented through smth
4) a loan
5) personnel
6) to enhance
7) to foster
8) personal commitment
9) morale
42
10) utilization of scarce resources

11) fiscal
12) a prerequisite
13) to assert a plan
14) to persuade

3. Reading
Read the article and point out what role and benefits of business
planning are mentioned. Compare them with those suggested by
you in Leadin.
Business Planning: General Overview

Business planning, also known as strategic planning or longrange
planning, is a managementdirected process that is intended to determine
a desired future state for a business entity and to define overall strate-
gies for accomplishing the desired state. Through planning, management
decides what objectives to pursue during a future period, and what actions
to undertake to achieve those objectives.
Successful business planning requires concentrated time and effort
in a systematic approach that involves: assessing the present situation;
anticipating future profitability and market conditions; determining ob-
jectives and goals; outlining a course of action; and analyzing the financial
implications of these actions. From an array of alternatives, management
distills a broad set of interrelated choices to form its longterm strategy.
This strategy is implemented through the annual budgeting process, in
which detailed, shortterm plans are formulated to guide daytoday
activities in order to attain the company’s longterm objectives and goals.
For entrepreneurs, the first step in successful business planning
involves creating a formal business plan, of the type commonly used to
attract investors and secure bank loans. Careful preparation of this docu-
ment forces a business owner to examine his or her own goals as well as
43
the market conditions in which the business operates. It also includes

a detailed financial analysis, a look at current staffing levels and future
needs, and information about management’s expertise. ‘‘All the elements
can be folded together to formulate a strategic plan that focuses on where
you want your company to be in the long run, and how you plan to get
there,’’ Vince Maietta wrote in The Business Journal. ‘‘That also helps
entrepreneurs focus on the strengths and weaknesses of the firm, as well
as opportunities and threats.’’
The use of formal business planning has increased significantly over
the past few decades. The increase in the use of formal longrange plans
reflects a number of significant factors:
1) Competitors engage in longrange planning.
2) Global economic expansion is a longrange effort.
3) Taxing authorities and investors require more detailed reports
about future prospects and annual performance.
4) Investors assess risk/reward according to longrange plans and
expectations.
5) Availability of computers and sophisticated mathematical models
add to the potential and precision of longrange planning.
6) Expenditures for research and development increased dramati-
cally, resulting in the need for longer planning horizons and huge
investments in capital equipment.
7) Steady economic growth has made longerterm planning more
realistic.
Benefits of Planning
Planning provides a means for actively involving personnel from all
areas of the business enterprise in the management of the organization.
Companywide participation improves the quality of the plans. Employee
involvement enhances their overall understanding of the organization’s
objectives and goals. The employees’ knowledge of the broad plan and
awareness of the expected outcomes for their responsibility centers mini-
mizes friction between departments, sections, and individuals. Involve-
ment in planning fosters a greater personal commitment to the plan and to
the organization. These positive attitudes improve overall organizational
morale and loyalty.
Managerial performance also benefits from planning. Planning focuses
44
the energies and activities of managers in the utilization of scarce resources

in a competitive and demanding marketplace. Able to clearly identify goals
and objectives, managers perform better, are more productive, and their
operations are more profitable. In addition, planning is a mental exercise
from which managers attain experience and knowledge. It prepares them
for the rigors of the marketplace by forcing them to think in a future— and
contingency oriented manner.
The Planning Horizon

Basically, there are two timetables for planning. The first is
longrange, extending beyond one year and normally less than five or ten
years. Often called the strategic plan or investment plan, it establishes the
objectives and goals from which shortrange plans are made. Longrange
plans support the organizational purpose by providing clear statements
of where the organization is going.
The second planning horizon is shortrange, covering a period of up
to one year. Shortrange plans are derived from an indepth evaluation of
the longrange plan. The annual budget is a quantified expression of the
enterprise’s plans for the fiscal year. It generally is divided into quarters,
and is used to guide and control daytoday activities. It is often called the
tactical plan because it sets priorities, in the near term, for the longrange
plans through the allocation of resources to specific activities.
Steps in the Planning Process

The planning process is directly related to organizational considera-
tions, management style, maturity of the organization, and employee pro-
fessionalism. These factors vary among industries and even among similar
companies. Yet all management, when applying a scientific method to
planning, perform similar steps. The time spent on each step will vary by
company. Completion of each step, however, is prerequisite to successful
planning. The main steps in the planning process are:
1) Conducting a selfaudit to determine capabilities and unique
qualities;
2) Evaluating the business environment for possible risks and re-
wards;
3) Setting objectives that give direction;
4) Establishing goals that quantify objectives and timeframes;
45
5) Forecasting market conditions that affect goals and objectives;

6) Stating actions and resources needed to accomplish goals;
7) Evaluating proposed actions and selecting the most appropriate
ones;
8) Asserting alternative strategic plans;
9) Instituting procedures to control the implementation and execu-
tion of the plan (mainly through the annual budget).
A company’s business plan is one of its most important documents.
It can be used by managers and executives for internal planning. It can be
used as the basis for loan applications from banks and other lenders. It can
be used to persuade investors that a company is a good investment. The
process of preparing a business plan serves as a road map to the future by
making entrepreneurs and business owners think through their strategies,
evaluate their basic business concepts, recognize their business’s limita-
tions, and avoid a variety of mistakes.

a) What are the reasons for the increase in the use of formal
longterm plans over the past few decades? Give comments
and your own examples.
b) What is the difference between strategic and tactical plans?
c) Which step in the planning process you consider to be the most
important? Give reasons.
2) Read the list of the main steps in the planning process again
and develop each point. Give your own examples.

a) “The planning process is directly related to organizational
considerations, management style, maturity of the organiza-
tion, and employee professionalism.”
b) “Able to clearly identify goals and objectives, managers perform
better, are more productive, and their operations are more
profitable.”
46
new words from the text (10–12 items).
to assess to judge оценивать, to evaluate, assessed,

the worth, давать to judge, assessable,
importance, оценку to estimate assessor, as-
etc. of smth; sessment
to estimate
the value of
smth
1, 2, 3,...
2) Complete the crossword with the words from the key vocabu-
lary and the text.
Across
1. An impressive display or collection; an orderly or regular arrange-
ment.
3. A person or group responsible for the administration of a project,
activity, or business.
5. A word relating to a goal or aim.
7. To promote the growth or development of smth.
9. Relating to government finances; involving financial matters.
47
10. A ____ plan is used to guide and control daytoday activities.

12. A number of objects or people grouped or belonging together,
often forming a unit or having certain features or characteristics
in common
Down
2. Something required as a prior condition.
4. The people employed in an organization.
6. Some property lent, esp. money lent at interest for a period of
time.
8. An obligation, promise, etc. that restricts one’s freedom of action;
a future financial obligation.
11. The process of making practical or worthwhile use of smth.
3) Listed below are the major elements of a business plan. Match

them with their brief descriptions.
Elements of a Business Plan
other details market analysis financial plan description of business

contingency plans executive summary production plan description of
management and organization structure description of products and/or
services implementation schedule sales and marketing plan
1. __________
This is usually a twotofive page summary of the entire business
plan. It is an important part of the plan, in that it is designed to capture
the reader’s attention and create an interest in the company. It usually
includes the company’s mission statement and summarizes its competitive
advantages, sales and profit projections, financial requirements, plans to
repay lenders or investors, and the amount of financing requested.
2. __________
This section of a business plan includes not only a profile of the company,
but also a picture of the industry in which the company operates. Every
business operates within a specific context that affects its growth potential.
The data of the section may cover new products and developments in the
industry, trends and outlook for the industry, and overall economic trends.
48
3. __________
The goal of this section is to differentiate a company’s products or
services from those of the competition. It describes specific customer needs
that are uniquely met by the firm’s products or services. Product features
are translated into customer benefits. Product life cycles and their effects
on sales and marketing can be described. The company’s plans for a new
generation of products or services may also be included in this section.
4. __________
This section presents the strengths of the company’s management
team by highlighting relevant experience, achievements, and past per-
formance. Key areas include management’s ability to provide planning,
organizational skills, and leadership. The section also contains information
about the company’s ownership and work force. It may present an exist-
ing or planned organizational structure that will accomplish the goals set
forth in the business plan.
5. __________
It serves as the basis for a company’s sales and marketing plans and
generally covers the company’s competition, customers, products, and
market acceptance, its strengths and weaknesses, providing a basis for
discovering market opportunities. This section of the business plan pro-
vides a picture of who buys and uses the company’s products or services
and highlights how the latter satisfy previously unfulfilled market needs.
It also includes evidence of market acceptance of the company’s unique
products or services.
6. __________
This section delineates the methods and activities that will be em-
ployed to reach the company’s revenue goals. It describes the company’s
customer base, products or services, and marketing and sales programmes.
7. __________
It is usually included if the business is involved in manufacturing a
product and covers production options that are available to produce a
desired mix of products. In nonmanufacturing companies, this section
would cover new service development.
49
8. __________
This section covers the financing and cash flow requirements implicit
in other areas of the business plan. It contains projections of income, ex-
penses, and cash flow, as well as descriptions of budgeting and financial
controls. Financial projections must be supported by verifiable facts, such
as sales figures or market research. Monthly figures are generally given for
the first two years, followed by annual figures for the next three to eight
years. If the business plan is written for investors or lenders, the amount
of financing required may be included here or in a separate section.
9. __________
This section provides key dates pertaining to finance, marketing, and
production. It indicates when specific financing is needed, when specific
aspects of a particular marketing campaign will take place, and delivery
dates based on production schedules.
10. __________
This section defines problems and challenges that the company may
face and outlines plans for overcoming unforeseen obstacles that might
arise. Specific topics that may be explored are competitive responses, areas
of weakness or vulnerability, legal constraints, staffing, and continuity
of leadership.
11. other details

Most business plans include a table of contents and a cover sheet con-
taining basic information about the company. An appendix may include a
variety of documentation that supports different sections of the business
plan. Among the items that may be found in an appendix are footnotes
from the main plan, biographies, graphs and charts, copies of contracts
and agreements, and references.
6. Skills Focus
In groups, roleplay the following situation using the information

and vocabulary of the both texts.
You work in the marketing department of a company. Your team
was set a target to prepare a new strategic business plan. Each
50
member is responsible for one section of the plan. Do your part of

the work separately and then discuss the whole plan all together.
Choose a person to supervise the process and draw conclusions.
7. Writing
1) Write a summary covering the information of the both texts,
using 150–170 words. Add your personal commentary.

a) Разработке плана предшествует системное осмысление
ситуации, более четкая координация усилий фирмы, более
точная постановка задач, что должно привести к росту
сбыта и прибыли. Основными этапами планирования
являются стратегическое и тактическое.
b) Стратегическое планирование состоит из выработки
программы фирмы, формирование ее задач и целей,
анализа хозяйственного портфеля и перспективного
планирования роста организации.
c) Для обеспечения роста фирмы используются следующие
стратегии: интенсивного роста, интеграционного роста,
диверсификационного роста.
d) На основе стратегических планов фирма разрабатывает
тактические планы (планы маркетинга). Основными
разделами плана маркетинга являются: сводка контрольных
показателей, изложение текущей маркетинговой ситуации,
перечень опасностей и возможностей, перечень задач и
проблем, изложение стратегий маркетинга, программы
действий, бюджеты и порядок контроля.
e) Фирма использует три типа маркетингового контроля:
контроль за выполнением годовых планов; контроль
прибыльности; стратегический контроль.
Unit 6. Product
1. Leadin
1) Work in small groups and make a list of words and expressions

connected with a notion of Product.
2) How would you define the concept of a product.
3) Compare your definition with the one given below.
Product — An object or a service that is mass produced or manu-
factured on a large scale with a specific volume of units. A typical
example of a mass produced service is the hotel industry. A less obvi-
ous but ubiquitous mass produced service is a computer operating
system. Typical examples of a mass produced objects are the motor
car and the disposable razor.
2. Key Vocabulary
1) Before you read the text, make sure you know the following
words and phrases. Look up if necessary, give their Russian
equivalents:
1) tangible
2) intangible
3) a core product
4) to augment
5) durability
6) unsought goods
52
7) staple goods
8) impulse goods
9) processing
10) installations
2) Paraphrase the words and word expressions in English.
3. Reading
Scan the article that follows and highlight the factors according
to which a product can be classified.
Use the following introductory phrases:
I presume…; Presumingly…; As a matter of fact…; In a nutshell…
Product and Its Classifications

The first element in the marketing mix is the product. A product is
any combination of goods and services offered to satisfy the needs and
wants of consumers. Thus, a product is anything tangible or intangible
that can be offered for purchase or use by consumers. A tangible product
is one that consumers can actually touch, such as a computer. An intangi-
ble product is a service that cannot be touched, such as computer repair,
income tax preparation, or an office call. Other examples of products
include places and ideas. For example, the state tourism department in
New Hampshire might promote New Hampshire as a great place to visit
and by doing so stimulate the economy. Cities also promote themselves
as great places to live and work. For example, the slogan touted by the
Chamber of Commerce in San Bernardino, California, is “It’s a great day
in San Bernardino.” The idea of wearing seat belts has been promoted as a
way of saving lives, as has the idea of recycling to help reduce the amount
of garbage placed in landfills.
Typically, a product is divided into three basic levels. The first level is
often called the core product, what the consumer actually buys in terms of
benefits. For example, consumers don’t just buy trucks. Rather, consum-
ers buy the benefit that trucks offer, like being able to get around in deep
snow in the winter. Next is the second level, or actual product, that is built
around the core product. The actual product consists of the brand name,
53
features, packaging, parts, and styling. These components provided the

benefits to consumers that they seek at the first level. The final, or third,
level of the product is the augmented component. The augmented com-
ponent includes additional services and benefits that surround the first
two levels of the product. Examples of augmented product components
are technical assistance in operating the product and service agreements.
Products are classified by how long they can be used — durability —
and their tangibility. Products that can be used repeatedly over a long
period of time are called durable goods. Examples of durable goods include
automobiles, furniture, and houses. By contrast, goods that are normally
used or consumed quickly are called nondurable goods. Some examples
of nondurable goods are food, soap, and soft drinks. In addition, services
are activities and benefits that are also involved in the exchange process
but are intangible because they cannot be held or touched. Examples of
intangible services included eye exams and automobile repair.
Another way to categorize products is by their users. Products are
classified as either consumer or industrial goods. Consumer goods are
purchased by final consumers for their personal consumption. Final
consumers are sometimes called end users. The shopping patterns of
consumers are also used to classify products. Products sold to the final
consumer are arranged as follows: convenience, shopping, specialty, and
unsought goods. Convenience goods are products and services that con-
sumers buy frequently and with little effort. Most convenience goods are
easily obtainable and lowpriced, items such as bread, candy, milk, and
shampoo. Convenience goods can be further divided into staple, impulse,
and emergency goods. Staple goods are products, such as bread and milk
that consumers buy on a consistent basis. Impulse goods like candy and
magazines are products that require little planning or search effort because
they are normally available in many places. Emergency goods are bought
when consumers have a pressing need. An example of an emergency good
would be a shovel during the first snowstorm of the winter.
Shopping goods are those products that consumers compare during
the selection and purchase process. Typically, factors such as price, qual-
ity, style, and suitability are used as bases of comparison. With shopping
goods, consumers usually take considerable time and effort in gathering
information and making comparisons among products. Major appliances
such as refrigerators and televisions are typical shopping goods. Shop-
54
ping goods are further divided into uniform and nonuniform categories.
Uniform shopping goods are those goods that are similar in quality but
differ in price. Consumers will try to justify price differences by focusing
on product features. Nonuniform goods are those goods that differ in
both quality and price.
Specialty goods are products with distinctive characteristics or brand
identification for which consumers expend exceptional buying effort.
Specialty goods include specific brands and types of products. Typically,
buyers do not compare specialty goods with other similar products because
the products are unique. Unsought goods are those products or services
that consumers are not readily aware of or do not normally consider
buying. Life insurance policies and burial plots are examples of unsought
goods. Often, unsought goods require considerable promotional efforts on
the part of the seller in order to attract the interest of consumers.
Industrial goods are those products used in the production of other
goods. Examples of industrial goods include accessory equipment, com-
ponent parts, installations, operating supplies, raw materials, and services.
Accessory equipment refers to movable items and small office equipment
items that never become part of a final product. Office furniture and
fax machines are examples of accessory equipment. Component parts
are products that are turned into a component of the final product that
does not require further processing. Component parts are frequently
custommade for the final product of which they will become a part. For
example, a computer chip could be produced by one manufacturer for use
in computers of other manufacturers. Installations are capital goods that
are usually very expensive but have a long useful life. Trucks, power gen-
erators, and mainframe computers are examples of installations. Operating
supplies are similar to accessory equipment in that they do not become
part of the finished product. Operating supplies include items necessary
to maintain and operate the overall firm, such as cleaners, file folders,
paper, and pens. Raw materials are goods sold in their original form before
being processed for use in other products. Crops, crude oil, iron ore, and
logs are examples of raw materials in need of further processing before
being used in products. The last category of industrial goods is services.
Organizations sometimes require the use of services, just as individuals
do. Examples of services sought by organizations include maintenance
and repair and legal counsel.
55
1) What ways of introducing...

a. an example
b. classification
c. addition
d. contrast
e. chronological order
... can you find in the text?

a) How do tangible and intangible products differ?
b) Which levels does a product pass on its way to the final stage?
c) How are products classified by their durability?
d) Which categories do products fall into by their users?
e) How can shopping goods be categorized?
f) What do industrial goods include?
1) Find words or phrases in the text which mean the following:
1. A product that can be touched is called….

2. A product that can’t be touched is called….
3. The first level of a product is called …
4. The second level of a product is called ….
5. The third level of a product is called …
6. Products that can be used repeatedly over a long period of time
are called …
7. Goods that are normally used or consumed quickly are called
….
8. Final consumers are sometimes called …
9. Products and services that consumers buy frequently and with
little effort are called …
10. Products that consumers buy on a consistent basis are called …
11. Products that require little planning or search effort are called
…
56
12. Products that are bought when consumers have a pressing

need are called …
13. Products that consumers compare during the selection and
purchase process are called …
14. Products with distinctive characteristics or brand identifica-
tion for which consumers expend exceptional buying effort are
called …
15. Products used in the production of other goods are called …
16. Movable items and small office equipment items that never
become part of a final product are called …
17. Capital goods that are usually very expensive but have a long
useful life are called …
18. Products that are turned into a component of the final product
that does not require further processing are called …
19. Goods that are sold in their original form before being proc-
essed are called …
6. Skills Focus
Use the prompts and charts below in Russian and write a paragraph
in English about a Product, give examples to each item. Exploit
introductory expressions and link words.
• Все, что может быть предложено рынку на продажу, для

потребления, что привлекает внимание
• Все, что удовлетворяет определенные потребности. Это могут
быть в любой комбинации:
Физические продукты;
Услуги. Консультации, обучение;
Место: удобный офис, WEBсайт;
Организации: клуб клиентов компании;
Идеи: дополнительные услуги — прямая телефонная линия;
Люди: обслуживающий персонал;
• Идея как продукт. Продукт не обязательно должен быть
физическим объектом.
Например, «продукт» — идея защиты животных.
57
Уровни товара или услуги
Свойства продукта
Экспл. характеристики и удовлетво-

Качество ренность. Характеризуется уровнем
и стабильностью.
Дизайн Внешний вид и образ продукта.
Отличают продукт от других.

Функции Придают дополнительную ценность
продукту.
58
Суть и характеристики услуг
Неосязаемость Неотдели-
Для покупателя мость
нельзя увидеть, Невозмож-
услышать, по- ность отделить
чувствовать услугу от ее
вкус, запахи т.д. провайдера
Услуга
Изменчивость Несохраняе-
Качество услуги мость
зависит от того, Услугу нель-
кто оказывает, зя сохранить,
когда, где и как чтобы «потом»
использовать
или продать
Unit 7. Pricing
1. Leadin
1) In pairs, discuss the following questions:

a) What is necessary to know for setting a price?
b) How can a seller find out that the established price suits the
customers?
c) What may help a seller advance the price without losing some
potential consumers?
2) In pairs, discuss which pricing strategy would you choose for
your business: high, medium, low prices? Why? What advan-
tages and disadvantages does each approach have?
Use the following introductory phrases:
It’s a well known fact that…; Though I can’t say for sure I think…;
I have no doubts that…
2. Key Vocabulary
1) an entrepreneur
2) to eliminate
3) fringe benefits
4) overhead costs
5) depreciation
60
6) rental or leasing costs

7) membership dues
8) fixed and variable expenses
9) an attorney
10) utilities
11) delivery and freight charges
12) gross profit margin
13) equation
14) to gauge

3. Reading
Read the article and say which of the cost factors given you con-
sider the most important one. Discuss your ideas in pairs.
Use the following introductory phrases or alike:
I assume that…; As I see it,…; In my humble opinion, ….
Intelligent Pricing
Intelligent pricing is one of the most important elements of any
successful business venture. Yet many entrepreneurs fail to educate
themselves adequately about various pricing components and strategies
before launching a new business. Smart business owners will weigh many
marketplace factors before setting prices for their goods and services.
Cost Factors and Pricing

There are four primary cost factors that need to be considered by
businesses when determining the prices that they charge for their goods
or services. After all, price alone means little if it is not figured within the
context of operating costs. A company may be able to command a hefty
price for an item, only to find that the various costs of producing and
delivering that item eliminate most or all of the profit that it realizes on
61
the sale. It should also be noted that service businesses often find it more
difficult to accurately gauge their costs. A freelance copyeditor may find
that one 2,500word article takes twice as long to complete as another
article of the same size because of differences in quality that are often
difficult to anticipate ahead of time.
Labour Costs. Labour costs consist of the cost of the work that goes
into the manufacturing of a product or the execution of a service. Direct
labour costs can be figured by multiplying the cost of labour per hour
by the number of employeehours required to complete the job. Busi-
ness owners, however, need to keep in mind that the ‘‘cost of labour per
hour’’ includes not only hourly wage or salary of the relevant employees,
but also the costs of the fringe benefits that those workers receive. These
fringe benefits can include social security, retirement benefits, insurance,
unemployment compensation, workers compensation, and other benefits.
Material Costs. Material costs are the costs of all materials that are
part of the final product offered by the business. As with labour, this ex-
pense can apply to both goods and services. In the case of goods, material
costs refer to the costs of the various components that make up a product,
while material costs associated with services rendered typically include
replacement parts, building parts, etc. A deck builder, for example, would
include such items as lumber, nails, and sealer as material costs.
Overhead Costs. Overhead costs are costs that cannot be directly

attributed to one particular product or service. Some business consult-
ants simply refer to overhead costs as those business expenses that do
not qualify as labour costs or material costs. These costs include indirect
expenses such as general supplies, heating and lighting expenditures,
depreciation, taxes, advertising, rental or leasing costs, transportation,
employee discounts, damaged merchandise, business memberships, and
insurance. A certain percentage of employees usually fit in this category
as well. While the wages and benefits received by an assembly line worker
involved in the production of a specific product might well qualify as a
labour cost, the wages and benefits accrued by general support person-
nel — janitors, attorneys, accountants, clerks, human resource personnel,
receptionists — are included as overhead.
62
Overhead expenses are typically divided into two categories — fixed

expenses and variable expenses. Fixed expenses are regular (usually
monthly) expenses that will not change much, regardless of a company’s
business fortunes. Examples of fixed expenses include rent, utilities, insur-
ance, membership dues, subscriptions, accounting costs, and depreciation
on fixed assets. Variable expenses are those expenses that undergo greater
fluctuation, depending on variables such as time of year (for seasonal busi-
nesses), competitor advertising, and sales. Expenses that are more heavily
predicated on company revenues and business owner strategies include
office supplies, mailing and advertising, communications (telephone and
Fax bills), and employee bonuses.
Cost of Goods Sold. This figure is in essence the business’s total cost
of manufacturing the products it sells or — in the case of retail firms — its
total expenditures to purchase products for resale. Delivery and freight
charges are typically included within this equation. Cost of goods sold
provides business owners with a rough measurement of their gross profit
margin. The figure usually bears a close relationship to sales, but it may
vary significantly if increases in the prices paid for merchandise cannot
be offset by increases in sales prices, or if profit margins swell because of
special purchase deals or sudden surges in product popularity.

a) What is “intelligent pricing”? Why is it crucial for businesses?
b) How many primary cost factors should businesses consider
when determining the prices to charge for their goods or serv-
ices?
c) What examples of fixed and variable expenses can you give?
d) Why do service businesses often find it more difficult to ac-
curately gauge their costs?
2) In small groups, discuss what other cost factors can be added

to the list above. Support your suggestions by explanations
and examples.
63
1) Complete the table with derivatives:

verb noun adjective
associate
retirement
deliver
rental
communication
fixed
include
regular
2) Give all possible synonyms and antonyms to the following

words:
a) expenses
b) to employ
c) fixed
d) a buyer
e) to keep in mind
f) to increase
3) Here are some main types of market research. Match them with
the descriptions below.
costplus pricing odd pricing pricing below competition price bundling
price lining competitive pricing manufacturer’s suggested retail price
pricing above competition multiple pricing
Pricing Strategies
Businesses have many different pricing strategies from which they

can choose, but they need to select carefully. An illconsidered decision
can place a heavy burden on the business.
64
1) _________ Many businesses prefer to simply price their goods

in accordance with the manufacturer’s suggestion. They thus eliminate
costs associated with making their own pricing decisions or pursuing more
proactive pricing strategies. Critics note, however, that this strategy is
utterly heedless of the competition, which may be able to offer a lower
price for any number of reasons.
2) _________ This is the practice of giving the customers the op-

tion of buying several items or services for one price. A furniture retailer,
for example, might offer customers a sofa and love seat combination at
a price that is somewhat lower than what the two goods would cost if
bought separately. The cost structure of most service companies is such
that providing an additional service costs less than providing the second
service alone. The second benefit of this strategy that appeals to custom-
ers is purchasing related services from one service provider. They can
save time and money by interacting with and paying one provider rather
than multiple providers. Thirdly, such approach effectively increases the
number of connections a service company has with its customers.
3) _________ Similar to price bundling, it is the practice of selling

multiple units of an item for a single price. A grocery store that offers two
boxes of macaroni and cheese at a single price, for instance, is engaged in
multiple pricing. Whereas price bundling is more commonly employed for
bigticket items, this approach is usually used to sell inexpensive consum-
able items such as razor blades, shampoo, household cleaning products,
and food and beverages.
4) _________ This methodology, popular with manufacturers, in-

volves adding together all labour, material, and overhead costs and then
adding the desired profit.
5) _________ Some business owners choose to base their own

prices on the prices of their principal competitors. Business owners who
choose to follow this course, however, should make sure that they look
at competing businesses of similar size and strength. It is very chancy to
compete with a large store’s prices, because they can buy in larger volume
and their cost per unit will be less. This strategy among serviceoriented
businesses, meanwhile, is a hazier proposition, since the nature and quality
65
of services offered can vary so widely from business to business. Still, it

is often employed, if only as a general pricing guideline.
6) _________ In settings in which price is not the customer’s most

important consideration some businesses can do quite well employing
this strategy. The key to making it work, say experts, is to provide cus-
tomers with added benefits that justify paying the higher price. These
benefits can take the form of: (1) convenient or exclusive location; (2)
social status; (3) exclusive merchandise; and (4) high level of service.
The latter can take the form of home or office delivery of goods, service
and/or product knowledge, speed of service, attractive return policies,
and friendly atmosphere.
Some business owners also boost prices in markets that have few
competitors, reasoning that the community has little choice but to buy
from their businesses. Such prices rarely reach outrageous levels, but they
can become sufficiently high that enterprising entrepreneurs will recog-
nize an opportunity to undercut the business with more inexpensively
priced goods or services.
7) _________ This is the practice of setting one’s prices below those

of its competitors. Commonly employed by major discount chains such as
WalMart — which can do so because its purchasing power enables it to
save on its costs per unit — this strategy can also be effectively used by
smaller businesses in some instances, provided they keep their operating
costs down and do not spark a price war. Indeed, the smaller profit mar-
gins associated with this pricing strategy make it a practical necessity for
participating companies to: exercise tight control over inventory; keep
labour costs down; keep major operational expenses such as facility leases
and equipment rental under control; obtain good prices from suppliers;
and make effective use of its pricing strategy in all advertising.
8) _________ Companies that engage in this practice are basically

hoping to attract a specific segment of the community by only carrying
products within a specified price range. This strategy is often employed
by businesses whose goods/services or location are likely to attract
upscale buyers, though others use it as well. Advantages sometimes ac-
crued through such practices include: reduced inventory and storage
costs, ease of merchandise selection, and enhanced status. Analysts note,
66
however, that this strategy frequently limits the company’s freedom to

react to competitors’ pricing strategies, and that it can leave businesses
particularly vulnerable to economic trends.
9) _________ Another possible name for this strategy is “off even

pricing”. It is used in nearly all segments of the business world today. It is
the practice of pricing goods and services at prices such as $9.95 (rather
than $10) or $79.99 (rather than $80) because of the conviction that
consumers will often round the price down rather than up when weighing
whether to make a purchase. This little morsel of pricing psychology has
become so universally employed that many observers question its value.
Other commonly used pricing policies include penetration pricing

and skimming pricing (for manufacturers) and loss leader pricing (for
retailers).
6. Skills Focus
In groups, roleplay the following situation using the information
and vocabulary of the both texts.
You are members of The Board of Directors. The time to reconsider
your pricing strategy has come. The negative fact is that the previous
month your company lost 20 per cent of profit and registered a 15 per
cent decrease of patrons (permanent consumers). Let some student
supervise the process and make conclusions. Choose one more student
to be responsible for the background data (only they will know the
real causes of the recession) Your task is to find out the possible rea-
sons for these losses (by asking the responsible student some proper
textbased questions) and argue a new pricing policy. Each student
should select one or two possible strategies and prove their efficiency.
Discuss all the given suggestions together.
7. Writing
Write a summary covering the information of the both texts, using
150–170 words. Add your personal commentary.
67
Unit 8. Distribution
1. Leadin
1) How would you explain the word “distribution”? What do you

think it means in economy and marketing in particular? Suggest
your own definitions.
2) Work in small groups and discuss:
a) the role of distribution in marketing;
b) who distributes and what;
c) how can distribution contribute to successful business;
d) what can inefficient distribution cause.
Employ such introductory expressions as:
In fact…; It’s an open secret that…; It ran through my mind that ….
2. Key Vocabulary
1) a wholesaler
2) a retailer
3) distribution networks
4) an outlet
5) logistics
6) failure
7) an intermediary
8) negotiation
9) a jobber
10) to fulfill orders
11) to forge better relationships with smb
68

sian equivalents of these words. Then practise reading them.

3. Reading
Read the first part of the text about distribution channels and find
the answers to the following questions:
a) What is a distribution channel? What does it consist of?
b) How many distribution channels does a business need? What
does it depend on?
c) What is distributed through the channels?
Make use of the following expressions:

As far as … is concerned; At all hazards…; Frankly speaking, ... ;
As a matter of fact,...
Distribution Channels
Distribution channels move products and services from businesses

to consumers and to other businesses. Also known as marketing channels,
channels of distribution consist of a set of interdependent organizations
— such as wholesalers, retailers, and sales agents — involved in making a
product or service available for use or consumption. Distribution channels
are just one component of the overall concept of distribution networks,
which are the real, tangible systems of interconnected sources and desti-
nations through which products pass on their way to final consumers. As
Howard J. Weiss and Mark E. Gershon noted in “Production and Opera-
tions Management,” a basic distribution network consists of two parts: (1)
a set of locations that store, ship, or receive materials (such as factories,
warehouses, retail outlets); and (2) a set of routes (land, sea, air, satellite,
cable, Internet) that connect these locations.
Distribution networks may be classified as either simple or complex. A
simple distribution network is one that consists of only a single source of
supply, a single source of demand, or both, along with fixed transportation
69
routes connecting that source with other parts of the network. In a simple
distribution network, the major decisions for managers to make include
when and how much to order and ship, based on internal purchasing and
inventory considerations.
In short, distribution describes all the logistics involved in delivering
a company’s products or services to the right place, at the right time, for
the lowest cost. In the unending efforts to realize these goals, the chan-
nels of distribution selected by a business play a vital role in this process.
Wellchosen channels constitute a significant competitive advantage, while
poorly conceived or chosen channels can doom even a superior product
or service to failure in the market.
Multiple Channels of Distribution

For many products and services, their manufacturers or providers
use multiple channels of distribution. A personal computer, for example,
might be bought directly from the manufacturer, either over the telephone,
direct mail, or the Internet, or through several kinds of retailers, including
independent computer stores, franchised computer stores, and department
stores. In addition, large and small businesses may make their purchases
through other outlets.
Channel structures range from two to five levels. The simplest is a
twolevel structure in which goods and services move directly from the
manufacturer or provider to the consumer. Twolevel structures occur
in some industries where consumers are able to order products directly
from the manufacturer and the manufacturer fulfills those orders through
its own physical distribution system. In a threelevel channel structure
retailers serve as intermediaries between consumers and manufacturers.
Retailers order products directly from the manufacturer, then sell those
products directly to the consumer. A fourth level is added when manu-
facturers sell to wholesalers rather than to retailers. In a fourlevel struc-
ture, retailers order goods from wholesalers rather than manufacturers.
Finally, a manufacturer’s agent can serve as an intermediary between the
manufacturer and its wholesalers, creating a fivelevel channel structure
consisting of the manufacturer, agent, wholesale, retail, and consumer lev-
els. A fivelevel channel structure might also consist of the manufacturer,
wholesale, jobber, retail, and consumer levels, whereby jobbers service
smaller retailers not covered by the large wholesalers in the industry.
70
What Flows Through the Channels

Members of channels of distribution typically buy, sell, and transfer
title to goods. There are, however, many other flows between channel
members in addition to physical possession and ownership of goods.
These include promotion flows, negotiation flows, financing, assuming
risk, ordering, and payment. In some cases the flow is in one direction,
from the manufacturer to the consumer. Physical possession, ownership,
and promotion flow in one direction through the channels of distribution
from the manufacturer to the consumer. In other cases there is a twoway
flow. Negotiation, financing, and the assumption of risk flow in both
directions between the manufacturer and the consumer. Ordering and
payment are channel flows that go in one direction from the consumer
to the manufacturer.
There are also a number of support functions that help channel mem-
bers perform their distribution tasks. Transportation, storage, insurance,
financing, and advertising are tasks that can be performed by facilitating
agencies that may or may not be considered part of the marketing chan-
nel. From a channel management point of view, it may be more effective
to consider only those institutions and agencies that are involved in the
transfer of title as channel members. The other agencies involved in sup-
porting tasks can then be described as an ancillary or support structure.
The rationale for separating these two types of organizations is that they
each require different types of management decisions and have different
levels of involvement in channel membership.
Effective management of the channels of distribution involves forging
better relationships among channel members. With respect to the task of
distribution, all of the channel members are interdependent. Relation-
ships between channel members can be influenced by how the channels
are structured. Improved performance of the overall distribution system
is achieved through managing such variables as channel structure and
channel flows.
4. Сomprehension Check
1) Find in the text the words which mean the following:

a) the management of materials flow through an organization,
ranging from raw materials to finished goods;
71
b) a market for a product or service;

c) a person who acts on behalf of another person, group, business,
etc.; representative;
d) the members of the executive group or administration of an
organization or business;
e) a person who acquires goods and services for their own personal
needs;
f) a discussion set up or intended to produce a settlement or
agreement;
g) an act, system, or business providing financial protection for
property, life, health, etc., against specified contingencies,
such as death, loss, or damage, and involving payment of
regular premiums in return for a policy to guarantee protec-
tion.
2) Discuss the following statements, illustrating your arguments

with examples:
a) Effective management of the channels of distribution involves
forging better relationships among channel members.
b) Channel structures range from two to five levels.
c) Wellchosen channels constitute a significant competitive
advantage, while poorly conceived or chosen channels can
doom even a superior product or service to failure in the
market.
3) Say whether these statements are true or false. Correct the

false statements.
a) Distribution networks are just one component of the overall
concept of distribution channels, which are the real, tangible
systems of interconnected sources and destinations through
which products pass on their way to final consumers.
b) Channel structures range from one to four levels.
c) Ordering and payment are channel flows that go in one direc-
tion from the consumer to the manufacturer.
d) Distribution networks may be classified as either simple or
complex.
72
1) Fill in the table. Use the words of the key vocabulary and some
to you.
distribu- the division распро- arrange- distribute,

tion of the total странение, ment, alloca- distribu-
income of a продажа tion tor, dis-
community через канал tributable,
among its сбыта, distributary,
members; поставка, distributed,
arrangement внедрение; distributing,
or location распределе- distribution-
ние al, distribu-
tive
1, 2, 3,...
2) Read the second part of the text about distribution channels

and think of 4–5 questions (for each paragraph) on its contents,
then let your partner answer them.
Selecting Channels for a Business

Given the importance of distribution channels — along with the
limited resources generally available to businesses — it is particularly
important for entrepreneurs to make a careful assessment of their chan-
nel alternatives. In evaluating possible channels, it may be helpful first
to analyze the distribution channels used by competitors. This analysis
may reveal that using the same channels would provide the best option,
or it may show that choosing an alternative channel structure would give
the business a competitive advantage. Other factors to consider include
the company’s pricing strategy and internal resources. As a general rule,
as the number of intermediaries included in a channel increase, producers
lose a greater percentage of their control over the product and pay more to
compensate each participating channel level. At the same time, however,
more intermediaries can also provide greater market coverage.
Among the many channels a business owner can choose from are:
direct sales (which provides the advantage of direct contact with the
73
consumer); original equipment manufacturer (OEM) sales (in which a

business’s product is sold to another company that incorporates it into a
finished product); manufacturer’s representatives (salespeople operating
out of agencies that handle an assortment of complimentary products);
wholesalers (which generally buy goods in large quantities, warehouse
them, then break them down into smaller shipments for their customers
— usually retailers); brokers (who act as intermediaries between produc-
ers and wholesalers or retailers); retailers (which include independent
stores as well as regional and national chains); and direct mail. Ideally, the
distribution channels selected by a business owner should be close to the
desired market, able to provide necessary services to buyers, able to handle
local advertising and promotion, experienced in selling compatible product
lines, solid financially, cooperative, and reputable.
Since many businesses, especially new ones, lack the resources to
hire, train, and supervise their own sales forces, sales agents and brokers
are a common distribution channel. Many businesses consign their output
to an agent, who might sell it to various wholesalers, one large distribu-
tor, or a number of retail outlets. In this way, an agent might provide a
new business with access to channels it would not otherwise have had.
Moreover, since most agents work on a commission basis, the cost of sales
drops when the level of sales drops, which provides businesses with some
measure of protection against economic downturns. When selecting an
agent, an entrepreneur should look for one who has experience with desired
channels as well as with closely related — but not competitive — products.
Other channel alternatives can also offer benefits to businesses. For
example, by warehousing goods, wholesalers can reduce the amount of
storage space needed by manufacturers. They can also provide national
distribution that might otherwise be out of reach for an entrepreneur.
Selling directly to retailers can be a challenge for business owners. In-
dependent retailers tend to be the easiest market for entrepreneurs to
penetrate. The merchandise buyers for independent retailers are most
likely to get their supplies from local distributors, can order new items
on the spot, and can make adjustments to inventory themselves.
Mediumsized retail chains often do their buying through a central
office. In order to convince the chain to carry a new product, an entrepre-
neur must usually make a formal sales presentation with brochures and
samples. Once an item makes it onto the shelf, it is required to produce
a certain amount of revenue to justify the space it occupies, or else it will
74
be dropped in favour of a more profitable item. National retail chains,

too, handle their merchandise buying out of centralized offices and are
unlikely to see entrepreneurs making cold sales calls. Instead, they usu-
ally request a complete marketing programme, with anticipated returns,
before they will consider carrying a new product. Once an item becomes
successful, however, these larger chains often establish direct computer
links with producers for replenishment.
3) Complete the sentences below with a word or word combina-

tion from the box.
copyright franchise agreement independent distributors commission agents
patent sales force shelf space sole distribution agreement
a) Agents who receive a percentage of the sales are ___________.

b) An agreement to sell only one manufacturer’s goods is cal-
led ______________.
c) All the people involved in selling a company’s goods or services
are ___________.
d) People who buy from companies and sell to retailers are
called __________.
e) A licence registering an invention and protecting ownership is
called _________.
f) The amount of space given over in a shop for displaying a particular
product is _______.
g) An agreement to pay a licence fee to use a wellknown name
is __________.

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Copyright ОАО «ЦКБ «БИБКОМ» & ООО «Aгентство Kнига-Cервис»

И.И. Воронцова, Л.И. Газарян, В.И. Уваров

INSIGHTS INTO MARKETING

2-е издание, стереотипное

© И.И. Воронцова, Л.И.Газарян,

Учебное пособие “Insights into Marketing” предназначено студен-

В пособии используются аутентичные тексты разнообразных

1. Leadin. Введение в тематику модуля. Презентационный ма-

Раздел Appendiсes включает:

В пособии делается акцент на выполнение практических за-

Формы учебной деятельности:

Unit 1. About Marketing in General

1) Consult a dictionary and write out the transcription and Rus-

2) Make 3–5 sentences of your own with the words (groups of

use a product or service because they have a need, or because it provides

Two Levels of Marketing

Operational Marketing executes marketing functions to attract and

1 E. Jerome McCarthy is a professor at Michigan State University, USA, and an

internationally known marketing consultant. He is one of the authors of the influential

retail), which geographic region or industry, to which segment

2) Refer closely to the article and answer the following questions:

d) What is ‘marketing mix’?

3) Say whether these statements are true or false. Correct the

benefit something выгода; advantage, disadvan- beneficiate,

2) Explain the difference between the words ‘economy’ and ‘eco-

3) Find 10 words from the key vocabulary in the word square.

4) Here are some additional words to use. Match up the words on

MacroMarketing and MicroMarketing

Macromarketing refers to the overall social process that directs the

5) There is a logical connection among three of the four words in each

6) Study the Useful Language phrases. Then discuss the second

1) Write a summary covering the information of the both texts,

Организация, которая ориентирована на рынок или потребителя,

Unit 2. Market Research

1) Consult a dictionary and write out the transcription and Rus-

2) Make 3–5 sentences of your own with the words (groups of

company, secondary information generally tracks trends within a market,

1) Refer closely to the article and answer the following questions:

tion. Which of them are more accurate and useful?

2) Discuss the following statements from the text, illustrating

Word Definition Equivalent Synonyms Antonyms Derivatives

costly of great price дорогой, expensive, cheap, cost, costs

2) Find definitions to the following words and word combinations.

closedend audience scanner openend ques- postsales or cus-

focus groups brand re- product psychological database

Types of Market Research

1) _________ is a research on who is listening, watching, and reading

2) ___________ includes simple, inperson research such as taste

3) ____________ helps advertisers to find out whether consumers have

4) ___________ tries to determine why people buy certain products

5) ___________ records what was actually purchased. This is valuable

6) ___________ shows up on thousands of lists and databases that are

8) ___________ includes such common activities as filling out a com-

9) Over time, market researchers have grown increasingly aware that

10) Inperson, sitdown discussions around a table with groups of con-

5) Study the Useful Language phrases. Then render the second

Starting your position

In small groups, roleplay the following situation using the

1) Write a short letter (100–150 words) to your friend from related

Методы маркетинговых исследований

Методологически все маркетинговые исследования используют

качественного маркетингового исследования) чтобы исследовать

Unit 3. Market Segmentation

1) How would you explain the words “segment” and “segmenta-

1) Consult a dictionary and write out the transcription and Russian

buying decisions, such as personality, lifestyle, and social class. Behavioral

1. Leadin. Введение в тематику модуля. Презентационный ма-

Macromarketing refers to the overall social process that directs the

closedend audience scanner openend ques- postsales or cus-

2) ___________ includes simple, inperson research such as taste

10) Inperson, sitdown discussions around a table with groups of con-

In small groups, roleplay the following situation using the

10. A ____ plan is used to guide and control daytoday activities.

In groups, roleplay the following situation using the information