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A) look at the charts and speak about the differences between the
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channels of distribution;
B) say in what industries different methods of distribution are
Possible.
Direct method of distribution:
Producer
Producer
Consumer
Indirect method of distribution:
Wholesaler Retailer
Grammar Exercises
Consumer
Ex.1. Change the sentences according to the model:
Model: I should go shopping today. - I should have gone shopping
yesterday.
1. The firm should apply for credit very soon.
2. They should see about the new refrigerator today.
3. I should take my wife shopping a bit later.
4. They should get groceries at the supermarket this afternoon.
5. You should order a new car.
6. He should buy a computer today.
7. He should speak with the manager today.
Ex.2. Change the sentences according to the model:
Model: If there is a shopping center nearby, we will go there
together. - If there had been a shopping center nearby, we
would have gone there.
1. If she buys too much, she won't be able to carry it herself.
2. If there is ice cream in this store, we will bring the children some.
3. If she tries the new boutique today, she will come very late.
4. If the shop offers home delivery, he will ask them to deliver.
5. If you shop downtown, you will find the shopping center.
LESSON 13
PRICING
Text
All products and all services have prices. The price depends on
different things such as credit terms, delivery, trade-in allowance, guarantee,
quality and other forms of service. A perfect price should produce the
biggest possible profit during a long period of time. It's hardly possible to
determine such a price. The price may be too high to produce a large
volume, or too low to cover costs. No other area of marketing operations has
been a subject to bad practice. Many businesses pursue unsound price
policies for long periods of time and are not aware about it.
Prices can be determined in different ways. For example, the prices of
meat, cotton and other agricultural produce can be decided in large central
market where forces of supply and demand exist. This is pure price
competition. The prices on industrial products (iron, steel, etc.) are usually
decided by large companies. As a rule the amount and price of goods sold to
large number of buyers is controlled by a few rival sellers. Prices also can be
set by the government, usually for different public services - railroads,
electricity, manufactured gas, bus services, etc.
If demand increases, prices rise, profits expand and new investments
are attracted. But other factors may be involved as well. Prices are related to
each other in different ways. Ultimately, everything is related in price, since
the consumer can buy and must pay for everything out of a particular limited
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amount of money.
Active Vocabulary
credit terms
trade-in allowance
to cover costs
to pursue
unsound
supply and demand
price competition
to set prices
кредитные условия
зачет цены сдаваемого при покупке товара,
напр. автомобиля
покрывать затраты
вести, следовать
неразумный
предложение и спрос
конкуренция в ценообразовании
устанавливать цены
Comprehension Questions
1. Why is it difficult to determine the right price?
2. Why is the seller interested in the price that produces the highest volume
of sales at the lowest unit cost?
3.
Why do many businesses follow unsound pricing policies?
4. In what way are agricultural prices decided?
5. How are industrial products usually priced?
6. Why does the government usually set the prices for public utility
services?
7. Why is it so important to know the levels of supply and demand when
dealing with pricing?
8. Why is everything related by price?
Vocabulary Practice
Ex.1. Put the necessary word in the sentence:
1.It is very difficult... without sound price policy.
2.Of course we are interested in producing the... with the
lowest unit costs.
3.I decided to buy a new car at this company because
they offered the best... on my old model.
4.The... of this store are very beneficial for a customer.
5.Their business will fail if they pursue unsound...
6.The government usually... for public utility services.
7.In pure competition the forces of... operate.
Dialogue
a. supply and
demand
b. volume of
sales
c. trade-in
allowance
d. compete
price policies
f. credit terms
g. to set prices
Dick is introducing a new line of products and is talking to his friend
Tom, a business consultant, about it.
Dick: It's the first time when I'm in business for myself.
Tom: Don't worry. The store has always been doing well. It has a great
location and as far as your new line of merchandise...
Dick: That's what I wanted to talk to you about. Can you give some ideas
how to charge the prices?
Tom: With pleasure. Generally, there are two types of pricing policies.
There is price emphasis and price de-emphasis.
Dick: What's the difference?
Tom: The price emphasis policy emphasizes low prices. This encourages
sales. But low price doesn't give extra services.
Dick: So, a really low price means no credit, home delivery, repair,
installation and other services.
Tom: That's what I mean. But many people are interested only in the low
price and not in the extra services.
Dick: Yes, and vice versa. The price which I set determines the number of
sales. I must think thoroughly about it.
Tom: A good example of price emphasis is ‘loss leader’ pricing. It means
that you choose one item - let's say an electric razor - at a price just
above the cost. The customers will come to your shop to buy this loss
leader item. But since they are inside they can decide to buy a few
other things they need.
Dick: It sounds interesting. What other things can you tell?
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Tom: There is also off-even pricing. Let's say you sell a tape recorder for
$69.95 instead of $70.00. Though it is in fact about the same, the low
price can produce a favorable psychological effect.
Dick: What are the other ways to attract the customers?
Tom: First of all, remember that you are going to compete with well-known
products, so you should start with especially low prices. It's important
to advertise this. You should use newspaper ads, maybe a radio spot,
maybe do a big window and floor display.
Dick: It makes sense.
Tom: And you can raise the price after your customers try a new brand, get
to know it and like it. They will continue to buy it.
Dick: I see. And what is the price de-emphasis you mentioned before?
Tom: It concerns high quality expensive items. Price de-emphasis means
that you don't call attention to the price at all.
Dick: I know. It concerns our fine jewelry department or designer fashions.
Tom: Yes. I see you are going to do very well.
Dick: Your suggestions seem to be very useful. Don't forget you have a
discount on any shopping you do in my shop.
Tom: In such a case I'll be back tomorrow with my wife.
Active Vocabulary
location
extra services
installation services
to charge prices
price emphasis
price de-emphasis
loss-leader item
место расположения
дополнительные услуги
услуги по установке
устанавливать, назначать цены
продажа товара за счет низкой цены
продажа товара за счет дополнительных
факторов (уникальность, доставка,
обслуживание и т.п.)
«лидер убытков», товар, продаваемый по очень
off-even pricing
favorable psychological
effect
new brand
item
низкой цене для привлечения покупателей
цена, не доходящая до круглой цифры
благоприятный психологический эффект
новая марка (товара)
зд. товар, продукт
Vocabulary Practice
Ex.1. Change the sentences according to the model:
Model: The tape recorder is inexpensive. Your store sells the tape
recorder. - The tape recorder that your store sells is
inexpensive.
1. The dresses are fashionable. The store introduced the new dresses last
week.
2.
The store has many refrigerators. Dick owns the store.
3. The stereo is high-priced. My daughter wants the stereo.
4. The price determines the number of sales. A retailer sets the price.
5. Very often the people don't want extra services. Many supermarkets
offer extra services.
6.
7.
Your shop should have a loss-leader item. The loss-leader item will
attract the customers.
Price de-emphasis works with high quality expensive items. Price-de-
emphasis means that you don't call attention to the price at all.
Ex.2. Change the sentences according to the model:
Mоde1: We won't introduce a new line of merchandise unless you suggest it.
- We will introduce a new line of merchandise if you don't suggest
it.
1. Tape recorders are popular unless the price is too high.
2. The consumers will continue to buy unless they don't like the item.
3. The buyer can get installation services unless he wants to pay for it.
4. The salesman will help you unless he is too busy.
5. People won't try a new product unless there is advertising.
6. Customers won't buy the new brand unless the price is low.
7. They won't raise the price unless it is necessary.
Ex.3. Answer the questions:
1. In what way were the prices charged in this country?
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2. What is your idea of the term ‘market price’?
3. What type of pricing policy works with the majority of consumer goods?
(price-emphasis, price de-emphasis)
4. What is more preferable for you in pricing: low prices with no extra
services or high prices with home delivery, repair and other services?
5. Why is it so important to have a loss leader item in a shop?
6. What is off-even pricing made for?
7. How can your pricing policy help to compete with well known products?
Ex.4. Translate into English:
1. Этот магазин предоставляет покупателю выгодные кредитные
условия.
2. Товар имеет низкую цену. Она едва покрывает затраты.
3. Эта фирма ведет неразумную ценообразовательную политику.
4. Прежде чем выпускать товар, необходимо тщательно
изучить спрос и предложение.
5. Государство устанавливает цены на ряд продуктов.
6. Магазин имеет превосходное место расположения.
7. Супермаркет предоставляет покупателю много дополнительных
услуг: доставку товаров на дом, кредит, установку и т.д.
8. Новая марка, несомненно, привлечет покупателей.
9. Начинайте с низкой цены.
10. Продажа за счет низкой цены действует при продаже товаров
народного потребления.
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