Unit 8.

COMMUNICATION SYSTEMS
TEXT A: Channels of Communication
TEXT B: Virtual Markets (Part 1)
TEXT C: Virtual Markets (Part 2)
GRAMMAR: Revision

LEAD- IN
Information and Communication Technologies
In pairs discuss these questions:
1.What is an ICT system?
2.How many types of ICT system can you think of?
3.How can a PC be connected to another computer?

PRE-TEXT EXERCISES
Ex.1 Read these abbreviations:
DMB (Digital Multimedia Broadcasting)
DAB (Digital Audio Broadcasting)
PANs ( Personal Area Networks)
MANs ( Metropolitan Area Networks)
PC (Personal Computer)
GPS ( General Positioning System)
BIOS ( Basic Input/Output System)
WI-FI (Wireless Fidelity)
VoIP (Voice over Internet Protocol)
USB (Universal Serial Bus)
WAN ( Wide Area Network)
AI (Artificial Intelligence)
ADSL (Asymmetric Digital Subscriber Line)
LAN (Local Area Network)
WiMAX (Worldwide Interoperability for Microwave Access)
TCP/IP ( Transmission Control Protocol/Internet Protocol)
URL (Uniform Resource Locator)
MMS (Multimedia Messages)
PIN (Personal Identification Number)
ICQ (I Seek You)
SIM (Subscriber Identity Module)
SMS (Short Message Service)
RAM (Random Access Memory)
PDA (Personal Digital Assistant)

Ex.2 Practice reading these words:

Transmit, transmission, mobile, telemarketing, connectivity, browse, device,
decode, multimedia, widescreen, broadcast, digital, wearable, wireless,
incorporate, cyborgs, cybernetics, pay-per-view basis, devise, transfer(n),
transfer(V), via, intranet, allow, satellite , peer, cover, cellular, Ethernet.
 TEXT A: CHANNELS OF COMMUNICATION
Active Vocabulary
Key terms: telecommunications, networks, internet, intranet, teleworking,
telemarketing, multimedia, digital, mobile devices, wireless, cybernetics.
Other words and expressions: be widespread, keypad, be invented by, be
equipped with, broadcast in a format, be incorporated into, be activated by,
navigate in, audio programs, wearable computers, digital TV, perform outside a
workplace, technology users.

What are Telecommunications?

Telecommunications refers to the transmission of signals over a distance for
the purpose of communication. Information is transmitted by devices such as the
telephone, radio, television, satellite, or computer networks. Examples could be
two people speaking on their mobile phone, a sales department sending a fax to a
client, or even someone reading the teletext pages on TV. But in the modern world,
telecommunications mainly means transferring information across the Internet, via
modem, phone lines or wireless networks.
Because of telecommunications, people can now work at home and
communicate with their office by computer and telephone. This is called
teleworking. It has been predicted that about one third of all work could eventually
be performed outside the workplace. In call centres, assistance or support is given
to customers using the telephone, email or online chats. They are also used for
telemarketing, the process of selling goods and services over the phone.
Digital TV and Radio
In recent years, TV and radio broadcasting has been revolutionized by
developments in satellite and digital transmission. Digital TV is a way of
transmitting pictures by means of digital signals, in contrast to the analogue signals
used by traditional TV. Digital TV offers interactive services and pay multimedia -
that is, it can transmit movies and shows to TV sets or PCs on a pay-per-view
basis. It is also widescreen, meaning programmes are broadcast in a native 16:9
format instead of the old 4:3 format. Digital TV provides a better quality of picture
and sound and allows broadcasters to deliver more channels.
Digital Terrestrial TV is received via a set-top box, a device that decodes the
signal received through the aerial. New technologies are being devised to allow
you to watch TV on your mobile. For example, DMB (Digita Multimedia
Broadcasting) and DVB-H (Digital Video Broadcast-Handheld) can send
multimedia (radio, TV and data) to mobile devices.
Audio programs (music, news, sports, etc.) are also transmitted in a digital
radio format called DAB (Digital Audio Broadcasting).
Mobile communications
Thanks to wireless connectivity, mobile phone , I phones and Androids now
let you check your email, browse the Web and connect with home or company
intranets, all without wires.
 The use of GPS in cars and PDAs is widespread, so you can easily navigate in
a foreign city or find the nearest petrol station. In the next few years, GPS chips
will be incorporated into most mobile phones.
Another trend is wearable computers. Can you imagine wearing a PC on your
belt and getting email on your sunglasses? Some devices are equipped with a
wireless modem, a keypad and a small screen; others are activated by voice. The
users of wearable technology are sometimes even called cyborgs! The term was
invented by Manfred Clynes and Nathan Kline in 1960 to describe cybernetic
organisms — beings that are part robot, part human.

VOCABULARY FOCUS
Ex.1. Find the English equivalents in the text.
Передача сигналів на відстань transmission of signals over a distance,
отримувати сигнал через антену або супутник, надавати підтримку клієнтам
через онлайн чати support is given to customers using online chats, цифрове
телебачення Digital TV, цифрові та аналогові сигнали digital and analogue
signals, бути широко поширеним, поширювати через інтернет, забезпечити
покращену якість зображення та звуку, мобільні прилади, цифрова та
супутникова передача даних, цифровий радіо формат, активувати за
допомогoю голосу або іншого звукового сигналу.

Ex. 2. Give the Ukrainian equivalents to the following words and expressions:
Refer to, wearable computers, be widespread, cybernetic organisms, interactive
services, digital signals, a pay-per-view basis, be equipped by/with, send
multimedia, cybernetic organisms, be activated by, sales department, give
assistance or support to customers, decode a signal, digital format, communicate
with, navigate in, check an e-mail, browse the WEB, wireless modem, provide a
better quality of sth, incorporate GPS chips into all mobile phones.
Обратитесь к, носимые компьютеры, быть широко распространены,
кибернетические организмы, интерактивные услуги, цифровые сигналы,
платная основа, быть оснащены/ с, отправлять мультимедийные,
кибернетические организмы, активироваться, отдел продаж, оказывать
помощь или поддержку клиентам, декодировать сигнал, цифровой формат,
общаться, ориентироваться в, проверить электронную почту, просматривать
веб, беспроводной модем, обеспечить лучшее качество sth, включить чипы
GPS во всех мобильных телефонов.
Ex. 3. Find the appropriate word or term in the text according to the
following description.
a. the device that allows PCs to communicate over phone lines.
telecommunications
b. the practice of working at home and communicating with the office by phone or
computer. teleworking
c. devices that deliver telecommunication services to users on the move. mobile
d. the term that refers to the transmission signals over a distance for the purpose of
communication. Telecommunications
e. the term that means without wires. wireless
f. two systems that let you receive multimedia on your mobile phone. Iphone
android
g. being part a robot, part a human. cyborg
h. the virtual process of selling goods and services. telemarketing
i. helps you to navigate in a foreign city or country. GPS
j. TV or PC content transmitted on a pay-per-view basis. Digital TV

Ex. 4. Match the words on the left with the definitions on the right.

1. Telecommunications a the program that lets you read the document in the
H Internet
2. Digital E b a semiconductor used to carry an electronic
circuit
3. Satellite G c a service that gives a customer assistance and
support
4. Chip (comp) B d a private computer network
5. Call center C e using a system of exchanging information as
numbers
6. Intranet D f Part a man, part a robot
7. Browser A g an electronic device that is sent into space and
moves around the earth or another planet
8. Cyborg F h using a system of exchanging information as
numbers

Ex. 5. Choose the appropriate word from the active vocabulary of the text to
complete the following sentences. Some words may be used twice.
1. I have a GPS navigation system in my car but I rarely use it.
2. Please complete this form and send it by email or normal mail.
3. I work in a call centre. I receive incoming calls with information inquiries.
4. Some people still watch Analogue TV to find out share prices, sport results ect.
5. Wearable computers are designed to be worn on the body or integrated into the
users clothing.
6. Image Transmission is the way of transmitting pictures by the means of digital
signals.
7. Internet was developed as military navigation system in the 1970s.
8. Some people believe that ……… develops such qualities as independent
decision making and problem solving.
9. The term cyborg was invented by M.Clynes and N. Kline in 1960.
10. Networks can be connected via Ethernet .

Ex.6 Read these small texts and put FAQs to them. Use pretext ex.1.
Example: What is a network protocol?
Text A
Networks are classified according to different criteria:
Geographical area : PANs, PDA, LANs, MANs, WANs.
Architecture: in a client server network, a computer acts as server and stores and
distributes info to the other nodes, or clients. In a peer-to-peer network, all the
computers have the same capabilities.
Topology, or layout. In a bus network , all computers are connected to a main
cable, or bus. In a star network, all data flow through a central hub. In a ring
network all devices are connected in a loop.
Network protocol: this is a set of rules that computers use to communicate with
each other. Networks use different protocols. The Internet uses TCP\IP.

Text B
Wired networks are linked by Ethernet cables, phone lines and high speed fibre
optic cables. Wireless networks use electromagnetic waves to transmit data. These
are the main types of wireless networks:
Satellites – long distances.
WiMax – connecting WI-Fi hotspots.
Bluetooth – short distances.
GSM – mobile phones.

Text C
A wireless adaptor, access point and a broadband connection are needed to set up a
wireless LAN. Wired LANs are more difficult to install, but they are cheaper,
faster and more reliable. However, they do not allow you to move from one access
point to another. At the same time, wireless networks are less secure and are
subject to interference.

Ex.7. In pairs do the network quiz. Use ex. 1 ,6.

1. This network typically consists of two or more local area networks, covering a
large geographical area.
a. LAN b.WAN c. Intranet
2.This type of network does not have a dedicated server; all the computers are
independent.
a. peer-to-peer b. client server c. MAN
3. On this topology, all devices are connected to the same circuit, forming a
continuous loop.
a. star b. ring c.bus
4. Which cables are used to transfer information for the Internet over long
distances at high speeds?
a. telephone lines. b. optic cables c. Ethernet cables.
5. The language used by computers to communicate with each other on the Internet
is called
a. Ethernet b. ADSL c. TCP\IP
6. Which device serves as a common connection point for devices in a wireless
network?
a. wireless access point b. wired router c. wireless adapter
7. Bluetooth is a wireless technology that uses radio waves to transmit data over
a. long distances. b. medium range distances c. short distances
8. The geographical region covered by one or several access points is called
a. wireless access point b. hotspot c. wireless network device
9. The standard protocol that allows computers to communicate over the Internet is
called
a. IP address b. TCP\IP c. HTTP
10. Which term describes any fast, high-bandwidth connection?
a. broadband b. dial-up connection c. Wi-Fi connection.

Ex.8 Translate the following into English.

1.Завдяки телекомунікаційним технологіям люди можуть працювати з дому
та підтримувати зв`язок з офісом через Інтернет..
Thanks to telecommunication technology, people can work from home and
communicate with the office via the Internet.
2. Бездротовий зв`язок дає можливість використовувати всі можливості
Інтернету в точках Wi-Fi доступу.
Wireless connection allows you to use all the features of the Internet in Wi-Fi
access points
3. Зараз розробляються такі новітні технології, які дозволяють дивитися
телебачення на вашому мобільному телефоні.
The latest technologies are being developed that allow you to watch TV on your
mobile phone.
4. Виробники мобільних телефонів планують встановлювати навігаційні чіпи
в кожний мобільний телефон.
Mobile phone manufacturers plan to install navigation chips in each mobile phone.
5. Цифрове телебачення дозволяє передавати сигнал високої якості через
необмежену кількість каналів.
Digital TV allows transmitting high quality signal through an unlimited number of
channels.
6. Мікропроцесори зазвичай виготовляють з силікону.
Microprocessors are usually made of silicone.
7. Майже всі сучасні мобільні телефони обладнані опцією, яка називається
Блакитний Зуб.
Almost every modern mobile phone is equipped with an option, which is called
Blue Tooth
8. Існує думка, що одна третина всієї роботи може бути виконана на відстані,
що дає можливість роботодавцям суттєво економити витрати на створенні та
підтриманні робочого місця.
It is believed that one third of all work can be done at a distance, which allows
employers to save significantly the cost of creating and maintaining a workplace.
9. Незахищені лінії зв’язку мають ризик бути атакованими вірусами, або ж
хакери можуть вдертися до вашого компьютеру та вкрасти конфіденційні
дані.
Unprotected lines of communication risk being attacked by viruses, or hackers can
break into your computer and steal sensitive data.
10. Багато сайтів мають вбудовані аудіо та відео файли. Якщо ви хочете
прикрасити вашу вебсторінку чимось особливим , ви можете використати,
наприклад, Adobe Flash, щоб додати інтерактивну анімацію або звуковий
контент.
Many sites have built-in audio and video files. If you want to decorate your page
with something special, you can use, for example, Adobe Flash to add interactive
animation or sound content.

Virtual Markets
Before you read
Discuss these questions.
1. How have new communication technologies ,especially the Internet, expanded
the traditional marketplace?
2. What is the impact of the marketspace on business strategy, particularly on the
interaction with customers?
TEXT B
From the Athenian agora to the mall of America, the places where buyers and
sellers negotiate their transactions have for thousands of years been just that:
places. But over the past two centuries, and especially since the advent of the
Internet and the World Wide Web, technology has given rise to an alternative to
the marketplace: the virtual marketspace.
More and more transactions that once took place only in the marketplace now
occur in the marketspace, largely free from the bonds of space and time. As a
result, there are exponentially greater opportunities—and expectations—for
deeper, more frequent interactions between companies and customers. With the
growth of a service-based economy in which products are increasingly
commoditised and differentiation ever harder to achieve, successfully managing
company-to-customer interactions is not just advisable—it's critical. Indeed, there
is a dialectic between the rise of the marketspace and the growth of the service-
based economy: each feeds, and feeds off, the other and they must be considered
together.
Thus, the marketspace presents both challenges and opportunities. Companies
that either underestimate or overestimate its significance stand to suffer. Those
who have underestimated have not realised that the Internet is overhyped; nothing
much has changed. Others do not know that all the old rules of business are
obsolete. On the other hand, firms that understand that the marketspace demands
creative new strategies, yet relentlessly test those strategies against fundamental
principles of service management, are likely to prosper. Even in the technology-
enabled, marketspace, using service to manage relationships with customers will
only become a greater virtue.
 From Marketplace to Marketspace
A marketplace consists of three basic components:
• sellers, offering something of value
(goods, services or information)
• buyers, offering something of value in
return (cash or any of the above)
• a physical location (store, exchange)
where the two come together
In the marketspace, buyers, sellers, and the value they exchange remain the same,
but the time and space constraints disappear. In the marketspace, their transactions
take place virtually any time, anywhere, thanks to a variety of technology-mediated
interfaces (not just the Web) such as the telephone, wireless device, and personal
computer. If a transaction takes place and you cannot say with confidence where it
occurred, it happened in the marketspace.
One could say that the marketspace was born more than 150 years ago, the first
time that a lone Morse code operator telegraphed an order to a supplier.
Succeeding generations of communications technology - telephone, fax, pager,
mobile phone, even fast-food drive-through microphone-expanded the universe of
transactions that could take place outside of the marketplace.
The marketspace as we know it today is chiefly enabled by the kind of 'screen-to-
face' interactions offered by the Internet in general and the Web in particular. It
should be noted, however, that the first (and still one of the most successful)
screen-to-face technology predates the Web by more than a decade in the form of
the humble ATM. In ‘spitting out cash' at more and more sites around the world,
the automated teller machine performed first, on a widespread basis, what many
marketspace interfaces are doing today: it represented a substitute of capital for
labour, thus threatening to make bank tellers an endangered species.
Banks originally positioned ATMs as a service channel for their least profitable
customers, assuming that account holders with substantial means would continue
to talk with live tellers. They soon discovered, however, that customers of all
stripes enjoyed banking at the machines—and the number of machines, networks
linking them and services they provided mushroomed. The result of retail
banking's shift from marketplace to marketspace was nothing less than a
transformation of the entire industry's competitive dynamics. As the ATM became
the dominant interface between customer and company, consumer loyalty to
individual bank brands eroded. The network trumped the brand as the locus of both
customer relationships and economic value, which is why we are more interested
in spotting Link or Visa on the side of an ATM than a placard for our particular
bank.
By the early 1990s, even before the emergence of the Web, virtual channels
were beginning to transform businesses and industries and create significant new
sources of value. This is why, in 1992, Harvard Business School professor John
Sviokla convinced that the old paradigms for teaching the first-year marketing
course were increasingly outmoded and hatched a new term (and a new course) to
describe the brave new business world: marketspace.
 Since that day, bubble economies and Wall Street manias have come and gone.
But today, no doubt , the marketspace is a very real and powerful phenomenon—
one that is here to stay.

Reading Tasks
A. Understanding main points.
Read text A and answer these questions.
1.Which of these statements gives the best summary of the ideas in text A?
a) The marketspace is exerting a profound impact on business strategy.
b) Today, the traditional marketplace has a virtual counterpart : a marketspace.
d) With the advent of new communication technologies, most notably the Internet,
the traditional marketplace has expanded into a new, virtual sphere of management
and commerce : the marketspace.
2. What exactly is meant by the term “marketspace”?
a) telephone , wireless device and personal computer ;
b) the WEB ;
c) a variety of technology-mediated interfaces.

B. Understanding details.
Mark these statements T (true) or F (false) according to the information in the text.
Find the part of the text that gives the correct information.
1. The rise and growth of the marketspace was fed off by the growth of
industries.
2. Successful company-to-customer interactions is the requirement of a service-
based economy because of the product commoditisation.
3. The basic components of the marketspace are goods and services , cash or any
other form of return and a physical location.
4. Another name for a marketspace is a technological interface.
5. Screen-to-face technology is regarded as a predecessor of the WEB.
6. In many cases, marketspace interfaces represent a substitute of capital for
labour.
7. According to the text , ATMs were positioned and have become the service tool
for the least profitable customers.
8. Marketspace is taught as the introduction to marketing in HBS.

C .Understanding expressions in the context.

1. ‘bonds of space and time’
a) limitations set by a marketplace ;
b) on- line transactions ;
2.’each feeds and feeds off the other’
a) augment each other;
b) correspond to each other ;
3. ‘the Internet is overhyped’
a) the role of the Internet is underestimated;
b) the role of the Internet is exaggerated;
4. ‘the old rules of business are obsolete’
a) the rules are still feasible;
b) the rules are no longer working;
5. ‘threatening to make bank tellers an endangered species’
a) to make bank tellers of little use;
b) to make bank tellers more legally responsible;
6. ‘consumer loyalty to individual bank brand eroded’
a) consumer loyalty was gradually destroyed;
b) consumer loyalty was sharply destroyed;
7. ‘bubble economies and Wall Street manias ‘
a) high volumes trade in equities with intrinsic value;
b) trade in products or assets with inflated value;
8. ‘to hatch a new term’
a) to introduce a new term;
b) to deny a new term;

D. How the text is organized.

These sentences summarise the main idea of each paragraph. Match each sentence
to the correct paragraph.
a) The marketspace eliminates time and space limitations .
b) A new era in the sources of value.
c) The first marketspace was telegraph.
d) Three basic components of the marketplace.
e) The appearance of the virtual marketspace.
f) The growth of the service-based economy gives the rise of the marketspace.
g) The ATM becomes the dominant interface between a customer and a company.
h) The challengies and opportunities of the marketspace.
i) Marketspace interfaces substitute capital for labour.
j) Financial markets will not be dominating in future.

Vocabulary Tasks
Word Search
Find a word or phrase in the text that has a similar meaning.
1. an alternative to the marketplace
v……. m……….
2. where buyers and sellers negotiate their transactions;
m……………..
3. the Internet or the WEB interactions;
s……… t…. ….f
4. goods and services that are hard to differentiate;
c…………. p……………
5. to exaggerate;
o…………

Multiple choice task

Choose the correct item to complete the sentences.
1.Since the advent of the Internet and the WWW , technology …. …… …… to an
alternative to the marketplace : marketspace.
a) has given support; b) has given rise ; c)has given a hand;
2.The marketspace presents both challengies and ……. .
a)risks; b)opportunities; c)threats;
3 . In the marketspace, buyers, sellers and the value they exchange remain the
same, but the time and space ….. disappear .
a).borders; b) constraints; c)obstacles;
4.The first screen-to- face technology ….. the Web by more than a decade in the
form of a humble ATM.
a) predates; b) anticipates; c) forcasts;
5. On a widespread basis , many marketspace interfaces represent a…………. of
capital for labour.
a) means; b) choice; c) substitute;
6. ATMs make bank tellers an endangered …….. .
a) sort; b) kind; c) species;

Transformations
Finish each sentence in such a way that it means exactly the same as the
sentence printed before it.
1. The restoration of communications and essential services was of prime
importance for the IT department.
The first
………………………………………………………………………………………
………..
2. The marketspace as we know it today is chiefly enabled by the kind of ‘screen-
to-face’ interactions offered by the Internet.
It’s the Internet
that…………………………………………………………………………..
3. A market space consists of three basic components : sellers , buyers and a
physical location.
The component structure
……………………………………………………………………..
4. With the growth of the service- based economy product differentiation is
becoming even harder.
Because………………………………………………………………………………
…………………..
5. It is the Internet that is the key technology enabling and propelling the explosive
growth of the marketspace.
The thing
that…………………………………………………………………………………
……….
6. E-commerce is difficult to do right.
It……………………………………………………………………
7. Yahoo was built around the simple but powerful idea that people want limited
rather than unlimited choice.
The idea
………………………………………………………………………………………
……………
8. Not many bankers believed that ATMs would replace bank tellers.
Hardly………………………………………………………………………………
………

Prepositions
Complete these sentences with the appropriate prepositions.
1.A consumer who has stayed only ……. the Ritz in San Francisco , for example,
can walk …… its Washington DC property to find that credit card and frequent-
flier numbers ,preference ……… non- smoking rooms ,and desire ……. an extra
chocolate ……. her pillow have preceded her.
2. Successful managers will seek ……. new and creative ways to integrate
technologies ……. their firm’s overall strategy to build strong customer
relationships ……. a high impact manner.
3. Technology can help marketers defy commoditization ….. enabling deeper and
richer relationships ……… customers.
4. …….. the early 1990s , even ……… the emergence …….the Web , virtual
channels were beginning to transform businesses and industries and create
significant new sources ……. value.
5. The Internet is increasing interactivity …….. people ,customers , companies and
industries.
6. Every day customers are leaving websites , turned …… …….. out-of-date,
poor quality content.
7. I am not one …. those advocating that we completely do ……. …….
management.
8. ……… 30% and 50% of the project’s lifecycle is devoted ….. investigative
stages ……… any final deliverable is physically built.
9. Large multinationals still exercise considerable power ……… many people
around the world.
10. It will take time to work …….. the best way to solve it.

Writing Tasks
Write a short essay ( 50-100 words) on one of the following topics.
1. The Internet is now shifting the balance of power to customers. What
challengies does it create for businesses?
2. Modern marketspaces are now open 24/7. Are all businesses prepared for it?
3. The Internet offers customers richness and reach at the same time. Support your
ideas with specific details.

TEXT C
Virtual Markets Are Transforming Business
Just as the ATM changed the competitive dynamics of the banking industry, the
emergence of the (so far) ultimate screen-to-face interactive medium—the Internet-
represented an opportunity for radical reengineering and productivity gains across
the full breadth of the economy. Today, it is the Internet that is the key technology
enabling and propelling the explosive growth of the marketspace.
The Internet allows millions of customers to interact with a firm at any hour, from
any place, via millions of distributed digital interfaces, on devices such as the PC.
At any given moment, for example, thousands of people from around the world are
simultaneously logged in to Amazon.com, buying CDs , selling food processors,
browsing books, comparing prices, applying for credit cards, downloading music,
registering for wedding gifts, sending electronic greeting cards. Much like the
back-office reengineering revolution of the 1980s, the Internet represents a front-
office reengineering revolution. It allows—in fact, it mandates— a ground-up
rethinking of how companies interact with and create experiences for their
customers. What drives this rethinking is clear from the success of automated-
interface businesses, from banking with ATMs to bidding on auctions at eBay. It's
no longer frontline service workers who have a monopoly on management of
customer relationships in the service sector—it's machines that are increasingly
doing the managing.
The widespread deployment of technology makes deep insight into customer ex-
perience possible, and necessary. Literally and figuratively, screen-to-face
interactions augment the value of service, making it possible for companies to
deliver service at lower cost and at higher quality. In a sector that has long been
characterised by dis-economies of scale, machine-mediated interactions make scale
economies possible. Given the importance of the service sector in the world's
economies—it represents more than 80% of gross domestic product output in the
United States, for example— this is a revolution of real magnitude and scope.
Moreover, customer relationship management via machine gives businesses
around the world a competitive weapon at a time in economic history when service
is more crucial than ever.
With the accelerating commoditisation of products and brands, it is not supply, but
customer demand, that is the scarcest and most valuable resource. As we continue
to move toward a service-centеred economy, firms are increasingly dependent on
the quality of their customer relationships. Even for product-based businesses,
service, more and more, is the key differentiator. Such iconic brands as IBM and
Xerox that once made their money selling boxes (mainframe computers and
copying machines) now sell those boxes at a loss; they rely almost exclusively on
follow-on service, maintenance plans, financing, and even consulting services for
their margins (indeed, the lion's share of IBM revenue is derived from services).
Even Microsoft, famous for its ruthless pursuit of profit, has launched its game
console, the Xbox, with a business plan for our times. Analysts estimate that every
Xbox sold will cost Microsoft nearly $200 in negative margin, but that Microsoft
will make up the difference— and ultimately reach profitability on the platform—
by selling games, upgrades, and networking services.
That's why personalisation has become such a hot concept; it's the ultimate frontier
in the delivery of human-mediated or technology-mediated services. And, once
again, technology can help marketers defy commoditisation by enabling deeper
and richer relationships with customers than ever before. For example, technology
known as collaborative filtering allows online retailers to predict the products and
services their customers may want to buy, based on their previous choices and on
the preferences of other like-minded consumers. Or take Ritz-Carlton: the upscale
hotelier can elevate its renowned personal service to new heights through its online
customer database. A consumer who has stayed only at the Ritz in San Francisco,
for example, can walk into its Washington DC property to find that her credit-card
and frequent-flier numbers, preference for non-smoking rooms, and desire for an
extra chocolate on her pillow have preceded her. Can other high-end hotel chains
afford not to follow suit? Clearly, companies that fail to exploit the power of
marketspace technology to make them more customer-centric are forfeiting a key
competitive advantage.
The advent of the marketspace has already had a significant impact on business—
particularly on the way that companies interact with their customers. However, that
does not mean (as was famously proclaimed about the Web not long ago) ttiat the
marketspace exists independently of the fundamental laws of economics. In the
end, the marketspace is not about new rules for a new economy, nor even about the
Internet or the Web; it is about using the tools of digital technology to achieve a
fundamental goal that is as old as the marketplace itself: the creation and nurturing
of profitable customer relationships.
In the marketspace, just like the marketplace, the name of the game is providing
value to customers; if anything, the market-space makes the age-old business
axiom 'serve the customer' even more paramount. Technology must be used to
create customer interfaces that deliver higher levels of customer-perceived value
(relative to competitive offerings), thus driving rising levels of satisfaction and
loyalty. The challenge for managers is to understand the full spectrum of interfaces
available to them— both screen-to-face (online) and face-to-face (offline)—as well
as how to manipulate those interfaces to optimise the customer's experience.
Technology, in other words, is simply another, albeit immensely powerful, busi-
ness tool. Successful managers will seek out new and creative ways to integrate it
into their firm's overall strategy to build and manage strong, loyal customer
relationships in a high impact yet cost-effective manner.

Before you read

Discuss these questions
1. Based on your experience , agree or disagree with the statement from the text B
that a monopoly on management of customer relationships in the service sector is
being lost and passed to machines?
2. According to text B customer relationships are becoming more important than
products themselves which means that customer demand has become the scarcest
resource in a service centered economy. What economic risks may it create in
future?
3. Do you think that in future marketspace will be able to exist independently of
the fundamental laws of economics? Give your reasons.

Reading Tasks
A Understanding main points
Read text B and answer these questions.
1. What is the new rethinking of how companies interact with and create
experiences for their customers?
2. Why do companies mentioned in the next have to sell their core products in
negative margins and why? What do they rely on?
3. What is the main challenge for managers in a customer centered economy?
4. Which economic sector has long been characterized by dis-economies of scale?
5. What is the name of the game both in the marketspace and marketplace now?
6. In your opinion, what is the back- office reengineering revolution of the 1980s ?

B Understanding details
Choose the correct answer or completion to these questions or statements . More
than one option may be correct.
1. Which of the following businesses are now selling their products at a loss?
a. Amazon; b. Microsoft; c. IBM d. Ritz-Carlton;
2. Modern economy makes businesses more and more dependent on:
a. technologies; b. core products; c. customer relationships; d. innovations.
3. According to the text collaborative filtering technology is :
a. screen-to-face interactions; b. commoditisation; c. personalisation;d. logistics
technology.
4. Nowadays, even product-based businesses are becoming almost totally
dependent on:
a. economies of scale; b. follow-on services and maintenance; c. competitive
technologies; d. commoditisation.
5. What makes service the key business differentiator ?
a. supply; d. demand; c. customer centric shift ; d. advent of screen-to-face
technologies.

Vocabulary tasks
A Synonyms
1. The word Internet is used several times in the text. What other phrase is used
that has a similar meaning?
2. The phrase `to elevate something to new heights` is used in the text. What other
phrase with the similar meaning is used in the text? What other similar phrases or
verbs do you know?

B Definitions
Match these terms with their definitions.
1. virtually a. perform actions using a computer
2. maintenance b. to order sb to do sth in a particular way
3. nurture c. almost all
4. augment d. checking or repairing regularly
5. mandate e. lose
6. hot concept f. well known ,established
7. commoditisation g. increase
8. log in h. care for and protect
9 . forfeit i. making more products or raw materials available
10. renowned j. very important topic

C Understanding expressions
Choose the best explanation for each of these phrases.
1. ruthless pursuit of profit
a) profit is beyond everything ;
b) profit is secondary ;
2. face-to-face services ;
a) online services:
b) offline services:
3. high-end hotel chains
a) inexpensive hotel chains ;
b) luxurious hotels ;
4. to follow suit
a) to act according your previously designed plans;
b) to do something because others do this ;
5. propelling the explosive growth
a) grow rapidly and collapse;
b) give impact for rapid growth;
6. paying attention to the fundamentals;
a) rely on the laws of economics;
b) rely on the main economic trends;

D Word families
Complete the chart.
VERB ADJECTIVE NOUN
……… explosive ………
creation
nurture …………… …………….
predict …………… ……………
……………. successful ……………
…………… …………. value
compete …………. ………….
interact …………. …………….
………….. ………….. preference
……………. dependent ……………
…………… deep ……………
optimise …………. ………….
E Prepositions
Match the verbs and prepositions as they occur together in the text.
1.interact a). out
2.log b).into ( use twice)
3.seek c).with
4.rely d).at
5.stay e).on
6.integrate f).in
7.walk

F Complete the sentence

Use an appropriate phrase from exercise C to complete each sentence.
1. Even some iconic brands have to ……… . …. follow-on services and
maintenance plans.
2. Now both big and small retailers ….. …….. ….. new and creative strategies
to build and manage strong customer relationships.
3. Screen-to-face interactive media allow millions of customers ……………. any
business at any hour from any place.
4. At any given moment millions of users all over the world ……………… to
eBay or Amazon.com buying and selling goods and services.
5. You will always have to ………… new ways ……. your overall strategy to
stay competitive in the market.
6.You can ………….. any Alfa bank office in Kyiv and apply for our best buy this
year – Visa Gold- only at 1000 UAH .
7. Save your time and money! Make a booking with Booking.com. and ……….
….......... any of 4000 hotels in Barcelona.

G Translate into English

Based on the vocabulary from the texts A and B translate the following sentences
into English.
1.Все більше та більше транзакцій , які раніше мали місце на фізичних
ринках , тепер відбуваються на ринках віртуальних.
2. Віртуальний ринок має дві базові складові – покупці та продавці, однак
обмеження, обумовлені часом та місцем дедалі унеможливлюються.
3.Комунікаційні технології розширили територію транзакцій , зробивши їх
віртуальними.
4.Координація технологій індустріальної ери – потяг та телеграф , автомобіль
та телефон , комп’ютер та факс – зробили транзакції всередині компанії не
тільки можливими,але й переважними.
5.З приходом координаційних технологій 21 століття, а саме, персональних
комп’ютерів та електронних мереж , обмін інформацією стає миттєвим та
недорогим для багатьох людей в багатьох місцях світу.
6.Швидкість, з якою ви можете отримати інформацію з Інтернету іноді
залежить від часу доби.
7.Інтернет підвищує взаємодію між людьми , клієнтами ,компаніями та
галузями промисловості.
8. До початку 90-х віртуальні канали починали змінювати бізнес та
створювати принципово нові джерела цінностей.
9. Віртуальний ринок це використання нових правил для нової економіки , а
саме це використання цифрових технологій заради створення та підтримки
вигідних стосунків з клієнтами.
10. Аукціон-вебсторінка eBay є найбільш відомим та успішним віртуальним
ринком в світі.