TEXT C The Product Life Cycle
Universal marketing functions
A common error is to assume that marketing activities consist of sales and advertising. In fact, marketing involves eight basic functions: buying, selling, transporting, storing, standardization and grading, financing, risk taking, and securing marketing information. A single organization need not perform all of these functions; more often, some are handled by manufacturers and others by resellers. For example, a supermarket performs the function of buying a variety of goods to make them available in one place. A wholesaler handles function of transporting these products to the supermarket.
The eight marketing functions serve several purposes. Buying and selling are exchange functions. These functions ensure that the right products are available to meet customers’ needs and that customers are aware the products are available.
Physical distribution functions are the activities required to get products to the customers who want them, including transporting and warehousing goods. Other related activity includes controlling inventory levels.
The facilitating functions help marketers know what to provide and help customers make purchase decisions and purchases. Within this category of functions, standardization and grading ensure that products meet quality-control standards. Financing involves providing credit to customers, so that they can meet their needs as they arise. Risk taking includes developing and offering for sale products that customers have not yet committed to buying. Information gathering involves collecting information about customers, competitors and other relevant subjects.
These functions must be performed in all macromarketing systems. How these functions are performed — and by whom — may differ among nations and economic systems. But they are needed in any macromarketing system.
The most effective way to carry out the marketing functions is for marketers to start by planning what they want to accomplish and how they will do it. Broadly speaking, they prepare a marketing plan, which consists of marketing objectives, identification of one or more target markets, and a marketing mix to serve each of the target markets.
Marketing strategy planning means finding attractive opportunities and developing profitable marketing strategies. But what is a «marketing strategy» ? A marketing strategy specifies a target market and a related marketing mix. It is a «big picture» of what a firm will do in some market. Two interrelated parts are needed: a target market — a fairly homogeneous (similar) group of customers to whom a company wishes to appeal, and a marketing mix — the controllable variables the company puts together to satisfy this target group. The customer is surrounded by the controllable variables.
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XII. Tick T (true) or F (false) sentences:
1. Marketing involves eight basic functions: buying, selling, transporting, financing, risk taking, and securing marketing information, storing, costing.
2. A single organization need not perform all of these functions; most often, some are handled by manufacturers and others by resellers.
3. A supermarket performs the function of buying a variety of goods to make them available in different places.
4. A retailer handles the function of transporting these products to the supermarket.
5. Buying and selling are exchange functions.
6. Physical distribution functions are the activities required to get products to the customers who want them, including transporting and pricing goods.
7. Standardization and grading ensure that products meet quality-control standards.
8. Financing involves providing shares to customers, so that they can meet their needs as they arise.
9. Risk taking includes developing and offering for sale products that customers have not yet committed to buying.
10.Information gathering involves collecting information about producers, competitors, and other relevant subjects.
11.The most effective way to carry out the marketing functions is for marketers to start by planning what they want to accomplish and how they will do it.
12.Marketing strategy planning means finding attractive opportunities and developing creative marketing strategies.
13.A marketing strategy specifies a competitive market and a related marketing mix.
14.A marketing mix — the controllable variables the company puts together to satisfy this target group.
XIII. Work out the table to show basic marketing functions:
| Function | Description |
XIV. Fill in the gaps with words from the list:
buyer factors, external factors, needs, price and promotional factors, supplier factors.
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Industrial marketers must understand what affects buying decisions in companies and organizations. Then they can plan a marketing strategy. We can say that buying affected by five factors.
1.______ , for example discounts, special prices and terms, as well as the influence of advertising, free samples, and trial offers.
2.______ , or what people say about the company, exhibitions and trade fairs, reviews and comments in trade journals, and also any relevant seasonal factors.
3.______ Examples are the buyer's experience, and knowledge of the product, and of the potential suppliers. The culture of the buying organization is also important, and an understanding of the company purchasing policy. The size, complexity, level of technology, and financial resources are important. A final factor of this strategy is the structure of the organization, and the role of senior executives _in buying decisions._
4._______ including level of urgency, stock levels, and the perceived value of the purchase to the buying organization.
5.______ include competitors and rivals offers, the quality and availability of the product offered, after-sales service, location and labour relations at the suppliers. Another significant factor here is the relationship with existing suppliers, including personal relationships, and the desire for continuity.
XV. Find words in the text above which go with these definitions:
a. special reduced prices
b. conditions attached to payment, such as dates and credit
c. special industry events to show off products
d. specialist magazines
e. rules about buying goods and services
f. quantity of equipment held in storage
g. support provided by a seller to a buyer
h. the relationship between a company and its employees
XVI. Fill in the gaps using words from the list:
TEXT C The Product Life Cycle
recoup, customers, attracted, flow, reaction, continues, products, provided, emerge, fade, described, develop, cyclical, product, tested, during, queue, sales, obliged, persuade, attitude, bound, reach, careful,
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trend-setters.
Much of the world about us is (1)……………. in nature. The moon circles the earth every 24 hours. The earth takes 365 1/4 days to circle the sun.
The flowers in the garden bloom in the summer, (2) ……………in the autumn, die in the winter only to (3)……. again the following spring. In much the same way, industrial (4) …………… have a life cycle.
The original ideas may come from either the marketing or the production side. Interaction (5) ……………as the market is (6) …………… and designs are modified. Eventually the (7) …………… is ready for the
market.
The first stage entails introducing the product to the market. No one will know about our wonderful new creation unless we tell them about it. So this is when we are (8) ……………to spend money on advertising. One way or another we must (9) ……………potential customers to «taste our wares». At this stage the people who buy the product are often aptly (10) …………… as (11) …………… or innovators. Their (12) …………… is often, «I'll be one of the first ones to have this.»
At the second stage the sales grow and our organization begins to(13) …………… some of the expenditure incurred (14) …………… the development stage. We also begin to benefit as many of the people who buy the product at this stage will be saying, «I mustn't get left behind.»
A problem may (15) …………… as sales outstrip the supplies coming from the factory, but the (16) …………… will be keener than ever to buy because it is obvious there is a growing demand for our product. It
is the same (17) …………… as when you go to the cinema. If there was a long (18) …………… outside the cinema you would think it was going to be a good film. Conversely, if there was hardly anyone in the cinema you would think it was going to be boring.
In the third stage the product is said to (19) …………… maturity. At this time sales reach a peak. People will have got used to buying the product. There will be repeat purchases. Some will say, «We always buy these.»
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However, the time will come when (20) ……………begin to decline. Customers will be (21) ……………to other products, perhaps (22) …………… by competitors. By then we should have (23) ……………a new product which we can now introduce. By(24) ……………timing of new products we can hope to maintain a steady (25) ……………of revenue and profits. So, products have a finite life cycle consisting of four stages: introduction, growth, maturity and decline.
XVII. Below are listed statements that describe different aspects of the four stages in the product life cycle (introduction, growth, maturity, decline ). Decide which stage is being described in each statement below .
1. To discourage competitive entry a company can price low, referred to as penetration. ……………
2. Promotional expenses at this stage are often directed towards contests or games to keep people using the product. ……………
3. Sales increase because of new users and a growing proportion of repeat purchasers. ……………
4. Sales and profits drop steadily. ……………
5. Often this stage is entered because of environmental or technological factors. ……………
6. Sales grow slowly and there is little profit, often a result of large investment cost. ……………
7. Emphasis of advertising shifts to selective demand. ……………
8. Profit declines since the cost of gaining each new buyer at this tage is greater than the incremental revenue. ……………
XVIII. Complete the sentences with terms from the list:
appeal, consumers, decision-making, development, extend, markets, penetration, portfolio, positioning, potential, quality, research, return.
1. Managers have to understand the……………of their products.
2. Most companies produce many different products and services. Together this is called the product …….
3. Companies market products at particular groups of consumers, the product is matched to the consumer. This is called product …………………
4. Product management is about getting the maximum…………….. from each product.
5. A key objective is to get to maximum market ………… which means reaching the most …………..
6. Another important objective is to__________ the life of the product. The typical life cycle diagram then shows a wave effect.
7. This is possible if the product_________ is good. This means changing or improving the product, to add to its ……………. and ……………….
8. Managers also try to find new……………for their products.
9. In all cases, product management needs good……………to help.
GRAMMAR
I. Translate into Ukrainian stating the functions of the Gerund:
1. Advertising is only one part of the marketing mix.
2. Our aim is attracting more customers.
3. We try selling a small consignment of goods.
4. The producer is always in the process of trying to analyze his/ her competitors.
5. One advertiser succeeded admirably in this by labeling his extremely expensive product.
II. Place the following verbs into the correct column:
admit, agree, aim, avoid, appear, arrange, ask, can't face, attempt, beg, can't help, can't afford, can't wait, can't resist, can't stand, choose, claim, decide, demand, carry on, desire, consider, delay, expect, deny, detest, dislike, fail, guarantee, happen, help, enjoy, excuse, hope, manage, offer, finish, give up, plan, pretend, promise, imagine, prove, refuse, seem, tend, involve, justify, keep (on), turn out, threaten, undertake, mind, postpone, practise, want, put off, risk, save, suggest, wish, tolerate.
A. Verbs are followed by B. Verbs are followed by
the Infinitive the Gerund
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