Buyers, sellers and the market I Aut&émi. Best Travé Customers and clients Company Autocomp Best Travel Digby and Charles Digirco Products/services products: car components services: package holidays professional services: architecture products: cheap computers Customer / client base customer base: car companies customer base: general public ------------------Cmif'i ■ F-------- client base or clientele: companies, government organizations and the public customer base: general public People who buy 'everyday' services such as train travel or telephone services are called customers. You can also talk about the users or end-users of a product or service, who may not be the people who actually buy it. For example, when a company buys computers for its staff to use, the staff are the end-users. People who buy products or services for their own use are consumers, especially when considered as members of large groups of people buying things in advanced economies. Buyers and sellers A person or organization that buys something is a buyer or purchaser. These words also describe someone in a company who is responsible for buying goods that the company uses or sells. These people are also buying managers or purchasing managers. A person or organization that sells something is a seller. In some contexts, for example selling property. they are referred to as the1 vendor. People selling things in the street are street vendors. Street vendors The market The market, the free market and market economy describe an economic system where prices, jobs, wages, etc. are not controlled by the government, but depend on what people want to buy and how much they are willing to pay. Word com binations with 'market' market . f forces pressures the way a market economy makes sellers produce what people want, at prices they are willing to pay place producers and buyers in a particular market economy, and the way they behave prices prices that people are willing to pay, rarher than ones fixed by a government reforms changes a government makes to an economy, so that it becomes more like a market economy Note: Marketplace is wrilfen as a single word L 46 Business Vocabulary in Use Find expressions in A and B opposite with the following meanin.es. 1 Someone who buys food in a supermarket. (3 expressions) 2 All the people who buy food from a particular supermarket chain, from the poinr of view of the chain. 3 Someone who buys the services of a private detective agency. 4 All the people who buy the services or a private detective agency, seen as a group. (2 expressions) 5 Someone who sells goods or services. 6 Someone selling a house. (2 expressions) 7 Someone buying a house. (2 expressions) 8 Someone who sells hamburgers to tourists outside the Tower of London. 9 Someone whose job is buying tyres for a car company. (4 expressions) 10 Someone who uses a computer, even if they have not bought it themself, but their company has. (2 expressions) Complere the TV reporter's commentary with expressions from C and D opposite. In China, all economic activity used to be controlled by the stare. Prices were fixed by the government, not by buyers and sellers in the market (1)............................But in the last 20 years there has been a series of market (2)...........................that have allowed people to go into business and start their own companies. Marker (.5)...........................are determined by what buyers are willing to pay, rather than by the state. There are still state-owned companies that lose a lot of money. Until recently, they have been protected from market (4)..........................., but market (5)...........................will eventually mean that they close down. Of course, the market (6)...................... has its losers: those without work. and victims of crime, which used ro be verv rare. What goods or services does your company, or one you would like to work for, sell? Does it sell to the public, or to other companies? Business Vocabulary in Use Markets and competitors I Companies and markets You can talk about the people or organizations who buy particular goods or services as the market for rhem, as in the 'car market', 'the market for financial services', etc. Buyers and sellers of particular goods or services in a place, or those that might buy them, form a market. If a company: enters \ penetrates it starts selling there for the first rime. abandons gets out of leaves it stops selling there. dominates ;-----------------------~~-------------------------------------- í a market it is the most important company selling there. corners monopolizes it is the only company selling there. drives another company out of , it makes the other company leave the market, perhaps because it can no longer compete. More word combinations with 'market' 'Market' is often used in these combinations: (Teseo is the market leader) Ľ3 Safeway 1 Sainsbury's O Waitrose n Asda __ ;.' ■in- growth In the late 1990s, Internet use was doubling even' 100 days, Market growth was incredible. Women are a particularly interesting target for the Volvo V70. They are an important market segment for Volvo. segment market ŕ The Softco software company divides the software market segmentation into large companies, small companies, home office users, and leisure users. This is its market segmentation. share leader Among UK supermarkets, Tesco sells more than any of the other chains. It has the highest market share. Tesco is the market leader among IľK supermarkets as it sells more than anv of the other chains. "I Competitors and competition Companies or products m the same market are competitors or rivals. Competitors compete with each other ro sell more, be more successful, etc. The most important companies in a particular market are often referred to as key players. Competition describes the activity of trying to sell more and be more successful. When competition is strong, you can say that it is intense, stiff, fierce or tough. If not, it mav be described as low-key. The competition refers to all the products, businesses, etc. competing in a particular situation, seen as a group. _ 48 Business Vocabulary in Use 20.1 Use the correct form of the words in brackets to complete the sentences. 1 European films do not export well: Furopean movies barely ......................(abandon/corner/ penetrate) rhe US marker. 2 In rhe 1970s, Kodak..........................(corner/enter/leave) rhe instant photography market, until then......................... (abandon/dominate/penetrate) by Polaroid. 3 The Hunt brothers tried to fix silver prices and to..........................(corner/enrer/leave) rhe silver market,..........................(enter/drive out/monopolize) all competitors. 4 In the 1940s, MGM..........................(abandon/get out of/monopolize) the market on film musicals. But by the late 1950s, Warner Bros had also started buying film rights to musicals. 20.2 Replace the underlined expressions with expressions from B opposite. You may need to add a verb in the correct form. ľm Kaltl and I'm marketing manager for CrazyCola in a country called Newmarket. In this market, we (I) sell more than any other cola. In fact, we (2) have 55 per cent of the market. (51 Sales are increasing ar seven to eight per cent per year. There are two main (4) groups of users: those who drink it in cafes, bars and restaurants, and those who buy it to drink at home. Of course, many users belong to both groups, but this is our (5) way of dividing our consumers. 20.3 Read rhis description of a language training marker. Answer the questions. In Paris, 500 organizations offer language Training ro companies. However, 90 per cent of sales are made by the top five language training organizations. The market is not growing in size overall. Organization A has 35 per cent of the marker, and faces stiff competition from B, which has about 25 per cent of the marker, and from C, D and F.. who each have 10 per cent, bur who are trying to grow by charging less for their courses. 1 How many comperitors are there in this market? 2 Is competition in the marker strong? 3 Who is the market leader? 4 Who are rhe two key players? 5 Who mainly makes up the competition, from the market leader's point of view? R II one competitor increases its market share, can rhe orhers keep rheir marker share at rhe same level? r Over +o tpu Answer the questions in 20.3 about a market that you know, for example the market that your company, or a company you would like to work for, is in. Business Vocabulary in Use 49 Marketing and market orientation Marketing Marketing is the process of planning, designing, pricing, promoring and distributing ideas, goods and services, in order to satisfy customer needs, so as to make a profit. Companies point out how the special characteristics or features of their products and services possess particular benefits that satisfy rhe needs of rhe people who buy them. Non-profit organizations have other, social, goals, such as persuading people not to smoke, or to give money to people in poor countries, but these organizations also use rhe techniques of marketing. In some places, even organizations such as government departments are starting to talk about, or at least think about their activities in terms of the marketing concept. The four Ps The four Ps are product: deciding what to sell price: deciding what prices to charge place: deciding how it will be distributed and where people will buy it promotion: deciding how rhe product will be supported wirh advertising, special activities, etc. A filth P which is sometimes added is packaging: all rhe materials used to protect and present a product before it is sold. The four Ps are a useful summary of the marketing mix, the activities that you have ro combine successfully m order to sell. The Promotion next four units look at these activities in detail. To market a product is to make a plan based on this combination and put it into action. A marketer or marketeer is someone who works in this area. (Marketer can also be used ro describe an organization that sells particular goods or services.) Market orientation Marketers often talk about market orientation: the fact that everything they do is designed to meet the needs of the marker. Thev may describe themselves as market-driven, market-led or market-oriented. Business Vocabulary in Use 21.1 Look ar A and K opposite. Read rhe article and answer rhe questions. Most people and many managers do not understand the role of marketing in modem business. Marketing is two tilings. Firsl. il is a strategy and set of techniques to sell an organization's products or services. This involves choosing target customers and designing a persuasive marketing mix to get them to buy. The mix mav include a range of brands, tempting prices, convenient sales outlets and a battery of advertising and promotions. This concept of marketing as selling and persuasion is by far the most popular idea among both managers and tlie public. line second, and by far more important concept of marketing, focuses on improving tlie reality of what is on offer. It is based on understanding customers' needs and developing new solutions which are better than those currently available. Doing this is not a marketing department problem, but one which involves the whole organization. For example, for Rover to beat Mercedes for the consumer's choice involves engineering new models, developing lean manufacturing processes, and restructuring its dealer network. Creating company-wide focus on the customer requires the continual acquisition of new skills and technology. Marketing is rarelv effective as a business function. As the chief executive of Hewlett Packard put it: 'Marketing is too important to leave to the marketing department.' Such companies understand that everybody's task is marketing. This concept of marketing offering real customer value is what business is all about. 1 Which of the four Ps are mentioned here? 2 Does the author think the four Ps are a complete definition of marketing? 3 Does the author think that marketing is only for marketers? 21.2 March the sentence beginnings (1—5] with the correct endings (a expressions from C opposite. 1 Farms are now more market-oriented 2 Since the 1980s, Britain has had a much more market-led 3 Many market-led growth businesses, 4 Lack of investment and market orientation 5 American TV is a marker-driven indnsrrv. .'). The sentences all contain a such as Microsoft and Sony, are in several markets at once, b and rhe audience decides rhe direcrion it takes. c led to falling sales and profits, d and less dependent on government monev e approach ro economics. Over 4ro ipu Can a poor product be made successful by clever marketing techniques? Can you think of any examples? Business Vocabulary in Use 5 I Products and brands Word combinations with 'product' product catalogue (BrE) catalog (AmE) mix portfolio a company's products, as a group line range a company's products of a particular type lifecycle positioning placement the stages in the lite of a product, and the number of people who buy it at each stage how a company would like a product to be seen in relation to its other products, or to competing products when a company pays for its products ro be seen in films and TV programmes See Units 15 and 16 for verbs used ro talk about products. Goods Goods can refer to the materials and components used to make products, or the products that are made. Here are some examples of these different types of goods: Consumer goods that last a long time, such as cars and washing machines, are consumer durables. Consumer goods such as food products that sell quickly are fast-moving consumer goods, or FMCG. Raw m Finished goods Brands and branding A brand is a name a company gives to its products so they can be easily recognized. This may be the name of the company itself: the make of the product. For products like cars, you refer to the make and model, the particular type of car, for example, the Ford (make) Ka (model). Brand awareness or brand recognition is how much people recognize a brand. The ideas people have about a brand is its brand image. Many companies have a brand manager. Branding is creating brands and keeping them in customer's minds through advertising, packaging, etc. A brand should have a clear brand identity so rhat people think of it in a particular way in relation to other brands. A product with the retailer's own name on it is an own-brand product (BrE) or own-label product I AmE). Products that are not branded, those thar do not have a brand name, are generic products or generics. Business Vocabulary in Use H 22.1 Match the sentence beginnings (1-7) with the contain expressions from A opposite. 1 Banks are adding new types of accounts 2 Apple is going to simplify its product line 3 Consumers have mixed feelings about supermarkets 4 When BMW bought Rover, 5 The new law will ban product placement 6 Following the launch of the Series 5 laptop, consumers were slow to understand 7 With this type of equipment in the US. correct endings (a-g). The sentences all a product life cycles are so short that product launches are very frequent. b its product positioning in relation to Psion's existing hardware products, c it changed its product range towards more expensive cars, d of cigarettes in movies, e extending their product portfolio into financial services. f and deliver fewer but more competitive models, g to their product mix. 22.2 Look at the words in B opposite. Which applies to each of these products? 1 microwave ovens 2 cotton 3 cars 4 hamburgers 5 soap powder 22.3 Complete this marketer's description of his work using expressions from C opposite. My name's Tomas. I'm Portuguese, and I've been (1).................................for Woof dog food for the whole of Portugal and Spain since I left business school last summer. The Woof (2)..........................is owned by a big international group. The market for pet food in Portugal and Spain is growing very fast, as more and more people own dogs and cats, and we're trying to increase (3)....................................................of Woof through TV advertisements and hoardings in the street. Research shows that people have very positive ideas about it: it has a very positive (4) ....................................................But the supermarkets have their (5)....................................................dog food, usually sold cheaper than our product, which is a problem. There are even (6) ................................................... sold just under the name 'dog food'. We have to persuade people that it's worth paying a bit more for a (-) product like Woof, which is far berrer, of course. Over +o ipu Have you seen any examples of product placement? Do you know any products with strong brand images? What are the advantages and disadvantages of brand name products, own brands and generics? Which do you prefer to buy? Business Vocabulary in Use S3 Price Pricing Our goods are low-priced. Permanently low pricing means Vwe charge low prices all the time. You mean cheap: your goods arc poor quality. Our goods are lugh-priced, hut we give customer service. And a lot of our goods are mid-priced: not cheap and not expensive. ^ Your goods are expensive. Customers don't need service. You must be selling some goods at cost (what you pay for them) or at a loss (even less). /res. We have loss leaders - cheap items to attract customers in. But it's a below the 'official' list price or recommended retail price. We have a policy of discounting, selling at a discount ro the list price. If he goes on n. undercutting us, we , can't Stav in business, r N____________._____________..-'■' Word combinations with 'price' price < f boom a good period for sellers, when prices are rising quickly controls government efforts to limit price increases cut a reduction in price hike an increase in price war when compering companies reduce prices in response to each other leader a company that is first to reduce or increase prices tag label attached to goods, showing the price; also means 'price' Upmarket and downmarket Products, for example skis, exist in different models. Some are basic, some more sophisticated. The cheapest skis are low-end or bottom-end. The most expensive ones are high-end or top-end products, designed for experienced users (or people with a lot of money!). The cheapest entry-level skis are for beginners who have never bought skis before. Those in between are mid-range. If you buy sophisticated skis to replace basic ones, you trade up and move upmarket. It you buy cheaper skis after buying more expensive ones, you trade down and move downmarket. Downmarket can show disapproval. If a publisher takes a newspaper downmarket, rhey make it more popular, but less cultural, to increase sales. BrE: upmarket, downmarket AmE: upscale, downscale L 54 Mass markets and niches Mass market describes goods that sell in large quantities and the people who buy them. For example, family cars are a mass market product. A niche or niche market is a small group of buyers with special needs, which mav be profitable ro sell to. For example, sports cars are a niche in rhe car indnsrrv. Business Vocabulary in Use AH Oriem ní fíJM J Model List price Our price Competing product Adagio 11,541 9,999 10,500 Brio 13.349 12,999 12.896 Capricioso Delicioso 15,742 14,999 13,987 16,908 15,999 14.442 23.1 Look at the price list. Are the statements below true or False? 1 The pricing policy is to sell below list prices. 2 The Adagio is low-priced, and is cheaper than the competition. 3 The mid-priced models are the Brio and the Capricioso. 4 This retailer charges 16.908 euros tor the Delicioso. 5 The Delicioso is the highest-priced model. 6 Tlie Delicioso is cheaper than the competition. 7 All models are sold at a discount. 23.2 Complete the sentences with the appropriate form of words from B opposite. 1 A price....................by Mills may indicate the start of price increases by other producers 2 Britain's house price....................has gone beyond I ondon, with properties in Kent now worth 25 per cent more than a year ago. 3 Consumers will get price...... of eight per cent off phone bills from May. 4 When President Perez ended price . electricity, phone and transport costs went up. 5 Perron is a price....................; it's usually the first to offer lower prices. 6 The project had many design problems, pushing up the price .............for each helicopter from $11 million to S26 million. 7 There is a price....................between Easyjet and K.LM on the London to Amsterdam rouře. 23.3 Correct the mistakes in italics, using expressions from C and D opposite. I'm Denise van Beek. from sailing boat company Nordsee Marine. We have something for everyone. If you've never sailed before, try our (1) mid-range model, the Classic. It's six metres long and very eas\ io sail. After a year or two, many customers (2) trade down or (3) take upmarket to something more (4) basic, like the (5) entry-level nine-metre Turbosail, with more equipment and a bit more luxury. Our (6) bottom end product is the Fantasy. It's 15 metres long and has everything you need for comfort on long voyages. We also produce the Retro, a traditional boat. There's a small bur profitable _t mass market for this rvpe of boat. Over +o upu S What is the range of products or services offered by your company or one you admire? How are they priced? Are there price wars or government price controls in your country? Business Vocabulary in Use 55 Place Distribution: wholesalers, retailers and customers A distribution network distribution channel PRODUCERS DISTRIBUTORS CUSTOMERS A wholesaler or shop selling a particular product, such as cars, is a dealer. A reseller sells computers. Wholesalers and retailers are distributors. Wholesalers are sometimes disapprovingly called middlemen. Shops A shop (BrF.) or store (AmE) is where people buy things. Companies may call it a retail outlet or sales outlet. Here are some types of shop: ■ chain store: part of a group of shops, all with the same name. ■ convenience store: small shop in a residenrial area and open long hours. ■ deep discounter: a supermarket with very low prices. ■ department store: very large shop with a wide variety of goods, usually in a town centre. ■ drugstore: shop in a town centre in the US which sells medicines; you can also have coffee and meals there. ■ hypermarket: very large shop with a wide variety of goods, usually outside a town. ■ supermarket: very large shop, selling mainly food. In Rritain, a shopping centre or shopping precinct is a purpose-built area or building in a town centre with a number of shops. Outside towns, there are shopping malls, where it is easy to park. Franchises are owned by the people that run them (franchisees), but they only sell the goods of one company. That company (the franchisor) provides goods, organizes advertising, and offers help and support. In remrn it takes a percentage of the profits of each franchisee. Many-restaurants are also run like this. Direct marketing Hi, I'm Beatrice and I work in a direct marketing company in Brussels. We organize mailings for many different products and services. This is direct mail but people often call it junk mail. We target our mailing lists very carefully: for example, we don't send mailshots for garden tools to people who live in apartments! We also do telemarketing, selling by telephone, including cold calls to people who have had no contact with us before. People are often rude to the workers in our call centres when rhev do this. BrE. call «rttre AmE: call center Business Vocabulary in Use 24.1 Use expressions ŕrom A opposite to complete this presentation. Hi, my name's Michael Son. 1 started out in Ehe PC business 15 years ago when I tried to buy a PC. There Was a complicated (I) d....................c....................between the manufacturer and the customer: (2) w...................., (J) r...................and (4) r....................all added to the costs, but they didn't add much value from the (5) c....................'s point of view. Here at Son Computers, we manufacture every PC ro order and deliver straight ro the buyer. That way we cut our the (6) m.................... 24.2 Took at B opposite and say where you go if you want to: 1 park easily and visit different shops without going to the town centre. 2 visit different shops grouped together in a British town centre. 3 buy a packet of sugar when all the supermarkets are closed. 4 have a snack in an American city without going to a restaurant. 5 buy food very cheaply. G buy clothes in a town centre without going ro a specialized clothes shop. 24.3 Which expression in C opposite does the "it' in each sentence refer to? 3 / really hate it, all that stuff coming through my letter box. It never stops. It's a terrible place to work. We have to make 10 calls an hour, with few breaks. ( 300,000 well-targeted letters \ to cat-lovers? We can •. organize it, no problem. /■ I have to do it. I've never spoken to them before. but I've got no choice. The two main activities that \ make it up are mailings and telemarketing. X People who come home to ten answerpbonc messages, all selling things, tend to hate ij. A rail rentrp \r I Over +o ipu Which types of shops do you use to buy different things? Why? Do you like getting direct mail? Have you ever bought anything this way? Do you receive cold calls? How do you react? business Vocabulary in Use 57