You are on page 1of 33

UNIT 5

MANAGEMENT AND MARKETING


SECTION A: WHAT IS MANAGEMENT ?
TASK SHEET 1:
Try to answer the following questions from your own knowledge:

What is management? Is it an art or a science? An instinct or a set of skills and techniques


that can be taught?

What do you think makes a good manager? Which 5 of the following qualities do you think
are the most important in a manager?
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.

being efficient: doing things quickly, not leaving tasks unfinished, having a tidy
desk
being friendly and sociable
being able to communicate with people
being decisive: able to make quick decisions
being able to motivate, inspire and lead people
being logical, rational and analytical
being competent: knowing every aspect of his job perfectly, as well as the work
and responsibilities of his subordinates
being authoritative: able to give orders
having good ideas
being persuasive: able to convince people to do things

Which of these qualities can be acquired? Which must you be born with?

TASK SHEET 2:
Read the dictionary definitions of management below; compare your first definition of
management with those given below underlying both the similarities and differences you
have found:
Longman Dictionary of Contemporary English:
1. the act of managing, especially a business or money
2. skills in dealing with a person
3. the people who are in charge of a firm, industry, etc., considered as one body
Websters New Collegiate Dictionary:
1.
2.
3.
4.

the act or art of managing: the conducting or supervising of something


judicious use of means to accomplish an end
capacity for managing: executive skill
the collective body of those who manage or direct an enterprise

Newnes Dictionary of Business Terms:


1. the carrying out of policies laid down by determining what results are to be
accomplished, planning how these results are to be accomplished, building up the
required organization and controlling that organization
2. the people responsible for carrying out these tasks
Websters Encyclopedic Unabridged Dictionary of the English Language
1.
2.
3.
4.

act or manner of managing, handling, direction or control


skill in managing; executive ability
the person or persons controlling and directing the affairs of an institution, business, etc.
executives collectively considered as a class (distinguished from labor)

The Oxford Dictionary for the Business World


1. managing or being managed.
2. administration of business or public undertakings, comprising both an organizational
skill, including the ability to delegate, and an entrepreneurial sense. The latter involves
recognizing and making use of opportunities, predicting market needs and trends and
achieving goals by sustained drive, skilful negotiation and articulate advocacy.
3. people engaged in management.

TASK SHEET 3:
You will be given a set of skills a good manager is supposed to have. In groups of two or
three decide whether they may be described as human or technical skills. After discussing
your results with the rest of the class, make up two columns and write them underneath.

forecasting

problem-solving

team-building
organizing

selecting

goal-setting
recruiting

interpersonal skills
controlling

HUMAN SKILLS

motivating

planning

appraisal and performance review

decision-making
rewarding

negotiating

delegating

development of self and other people

training

coordinating
seeing the whole

TECHNICAL SKILLS

TASK SHEET 4:
Which is the difference between a good and a bad manager? The following adjectives may
prove useful in describing the qualities/ non-qualities of a manager:
ruthless
nosy
enterprising
focused
interfering
firm
thorough
wish-washy
bullying

ambitious
forceful
opportunistic
indecisive
competitive
open to change
helpful
combatitive
narrow-minded

rude
tolerant
caring
polite
irresponsible
humorless
determined
generous
fair

WHAT IS MANAGEMENT?
Peter Drucker, a well-known American business professor and consultant, suggests that the work of a
manager can be divided into: planning (setting objectives), organizing, integrating (motivating and
communicating), measuring and developing people.

First of all, managers set objectives and decide how their organization can achieve them. This
involves developing strategies, plans and precise tactics, and allocating resources of people and
money.
Secondly, managers organize. They analyse and classify the activities of the organization and
the relations among them. They divide the work into manageable activities and then into
individual jobs. They select people to manage these units and perform the jobs.
Thirdly, managers practise the social skills of motivation and communication. They also have
to communicate objectives to the people responsible for performing individual jobs from teams.
They make decisions about pay and promotion. As well as organizing and supervising the work of
their subordinates, they have to work with people in other areas and functions.
Fourthly, managers have to measure the performance of their staff, to see whether the
objectives set for the organization as a whole and for each individual member of it are being
achieved.
Lastly, managers develop people both their subordinates and themselves.

Obviously, objectives occasionally have to be modified or changed. It is generally the job of a


companys top managers to consider the needs of the future and to take responsibility for innovation,
without which any organization can only expect a limited life. Top managers also have to manage a
businesss relations with customers, suppliers, distributors, bankers, investors, neighboring
communities, public authorities, as well as deal with any major crises which arise. Top managers are
appointed, supervised and advised by a companys board of directors.
Although the tasks of a manager can be analysed and classified in this fashion, management is not
entirely scientific. It is a human skill. Business professors obviously believe that intuition and
instinct are not enough; there are management skills that have to be learnt. Some people are clearly
good at management and others are not. Some people will be unable to put management techniques
into practice. Others will have lots of technique, but a few good ideas. Outstanding managers are
rather rare.

TASK SHEET 5:
Complete the following sentences with these words:
achieved
manageable

board of directors
communicate innovations
performance resources
setting supervise

1. Managers have to decide how best to allocate the human, physical and capital
.. available to them.
2. Managers logically have to make sure that the jobs and tasks given to their
subordinates are
3. There is no point in objectives if you dont them
to your staff.
4. Managers have to their subordinates, and to measure and try to improve
their .
5. Managers have to check whether objectives and targets are being
6. A top manager whose performance is unsatisfactory can be dismissed by the companys

7. Top managers are responsible for the that will allow a company to adapt
to a changing world.
TASK SHEET 6:
Match up these verbs and nouns to make common collocations.
allocate
communicate
develop
make
measure
motivate
perform
set
supervise

decisions
information
jobs
objectives
people
performance
resources
strategies
subordinates

TASK SHEET 7:
Read the following paragraph and then tick the answer you think is correct.
MANAGER vs. MANAGEE
There is a paradoxical conflict of roles, a conflict peculiar to the process by calling you, s/he is
playing the role of manager, for s/he is attempting to get something done through you.
Simultaneously, you are playing the role of managee, the one through whom s/he is attempting
to get it done. The skill required to be an effective manager is quite different from the skill
required to be an effective managee; few managers are equally effective at both. One of the
career-fatal misconceptions of the amateur is that, in order to succeed in management careerwise, it is sufficient just to excel as a manager.
1. The skills required to be an effective manager and an effective managee are quite the
same.
TRUE
FALSE
2. Managers are usually effective as managees.
TRUE

FALSE

3. To succeed in management as a career, it is not sufficient to excel as a manager.


TRUE

FALSE

SECTION B: MANAGEMENT vs. LEADERSHIP


TASK SHEET 1:
Match the situations and the alternatives; some clues have been underlined to help you.
1. The founder and chairman of your company has a new hobby-horse that you think will be a
disaster. Do you _______________________
2. You meet a person you think would be an ideal member of your team, but you have no vacancy,
head-count or budget for hiring him. Do you __________________________
3. Your market research department produces a strongly negative report on a new product you are
particularly enthusiastic about. Do you ________________________________
4. Your subordinate wants to hire someone about whom you have bad vibes.
Do you________________________________
5. You have a subordinate with a knack of being right for the wrong reasons.
Do you ________________________________
6. You have a hunch, but not a shred of evidence, that one of your area managers is dishonest. Do
you _________________________
7. The agency produces an ad that tests well and meets the brief, but you strongly dislike it.
Do you _________________________________
8. You are not a technical man, but have a hunch about the answer to a serious technical problem;
your technical people think your hunch is nonsense. Do you _______________
9. The evening before you are due to commit to a major new investment project, your horoscope
says most unsuitable time for entering into new commitments.
Do you _________________________________
10. You are due to fly to New York for an important meeting. Your wife has a vivid dream about a
plane crush. Do you ______________________________
11. You have a mental picture of the potential shape of your business in five years time that is very
appealing but radically different from where the existing strategy is taking the business.
Do you __________________________
12. A questionnaire like this produces a very different result from your own self-image.
Do you __________________________________

A
a. Dismiss it as wishful thinking?
b. Set up a task force to review the present
strategy and alternatives, including your
vision?
c. Communicate your vision to the team
and tell them to produce a strategy to make
it happen?
d. Change the strategy piece by piece over
time without revealing your vision?

D
a. Try to talk him out of it?
b. Commission an
independent consultancy
report?
c. Go ahead on the basis
hes been right most times
before?
d. Resign?

E
a. Fire the agency?
b. Veto the ad?
c. Let it go ahead?
d. Suggest some modifications to it?

H
a. Wait for his luck
to run out?
b. Promote him?
c. Send him on a
business
management course?
d. Set up a
subsidiary for him to
run?

J
a. Create a new post for him?
b. Tell him to keep in touch till an
opportunity arises?
c. Hire him and tell him to create
his own role?
d. Offer him work as a
consultant?

B
a. Go ahead regardless?
b. Postpone the decision?
c. Drop the project?
d. Order a review of the project?

C
a. Postpone the meeting to another day?
b. Change the time so you can go by train?
c. Stick to the original plan?
d. Send your deputy?

F
a. Go ahead regardless?
b. Commission a second study from an
outside agency?
c. Drop the product?
d. Seek to modify the product to meet the
objections?

G
a. Leave it to them to follow their own line?
b. Insist that they pursue yours in parallel?
c. Ask a contract research institute to examine your idea?
d. Set up some experiments yourself?
I
a. Disregard the questionnaire?
b. Check back over your answers?
c. Examine the questionnaires scoring system?
d. Revise your self-image?
K
a. Ask Internal Audit to make an investigation of the area?
b. Switch him with another area manager?
c. Pull him into a head office job where you can keep a close eye on him?
d. Engineer a redundancy/ early retirement for him?

L
a. Tell your subordinate and let him decide?
b. Veto the appointment?
c. Keep quiet about it?
d. get a psychologists report?

STYLE THE SOUL OF LEADERSHIP


Style has been defined as a preferred way of thinking and behaving. Psychologists have
distinguished 4 such styles:

Directive style (A)


Analytical style (B)
Conceptual style (C)
Behavioural style (D)

Here is a summary of the characteristic of each style:


A. Directive Style
Strengths: practical, authoritarian, impersonal, quick, need for power and status; consideration
for facts, rules, procedures; dislike for committees and group discussion; orientation toward
actions and results.
Weaknesses: rigid, impersonal, simplistic and autocratic.
B. Analytical Style
Strengths: ingenious, intellectual, desire for control; impersonal, skilled in organizing facts;
consideration for every aspect of a given problem; use of rigorous analysis and elaborate,
detailed plans.
Weaknesses: too dogmatic, overcontrolling, impersonal, sometimes too slow.
C. Conceptual Style
Strengths: very personal, concern for others view, well-liked; consideration for many options
and future possibilities, adaptive and flexible, intuitive, search for new ideas.
Weaknesses: dilettante, too idealistic, imaginative, slow and difficult to control.
D. Behavioural Style
Strengths: sociable, friendly, supportive, talent for building teams; action-oriented.
Weaknesses: too concerned about others, too sensitive, cant make hard decisions and cant say
no.

The table bellow illustrates better the patterns of the representatives of each style:

My prime
objective is to...

I enjoy jobs
that

In my job, I
look for
I communicate
best with
others
When I am not
sure about what
to do, I
I am especially
good at

When time is
important, I

I am good at
remembering
9 When under
stress, I
10 I dislike

A
have a
position with
status
are technical
and well
defined
practical
results
on a direct
one-to-one
basis
rely on
intuition

B
be the best in
my field

remembering
dates and
facts
decide and act
quickly

solving
difficult
problems
follow plans
and priorities

peoples
names
become
anxious
losing control

places we met

have considerable
variety
the best
solutions
in writing

search for facts

C
achieve
recognition for
my work
allow
independent
action
new approaches
or ideas
by having a group
discussion

D
feel secure in
my job
involve people

good working
environment
in a formal
meeting

look for a
possible
compromise
seeing many
possibilities

wait before
making a
decision
interacting
with others

refuse to be
pressured

look for
guidance or
support
peoples
personalities
am forgetful

peoples faces

concentrate on the become


problem
frustrated
boring work
following rules

being rejected

TASK SHEET 2:
Try to find the most appropriate adjectives that best describe the attitudes illustrated in the
table above. You may find the characteristics of each style useful in accomplishing your
task.
e.g. My prime objective is to:
have a position with status = managerial
be the best in my field = proficient
achieve recognition for my work = well-reputed
feel secure in my job = steadfast

The Difference Between Management And Leadership


PRE-READING TASK
What is your definition of leadership?
What makes a good leader?
What is the difference between management and leadership?
Leadership and management are two notions that are often used interchangeably. However, these words actually
describe two different concepts. In this section, we shall discuss these differences and explain why both terms are
thought to be similar.
Leadership is a facet of management
Leadership is just one of the many assets a successful manager must possess. Care must be taken in
distinguishing between the two concepts. The main aim of a manager is to maximize the output of the
organization through administrative implementation. To achieve this, managers must undertake the following
functions:

organization
planning
staffing
directing
controlling

Leadership is just one important component of the directing function. A manager cannot just be a leader, he also
needs formal authority to be effective. For any quality initiative to take hold, senior management must be
involved and act as a role model. This involvement cannot be delegated.
In some circumstances, leadership is not required. For example, self-motivated groups may not require a single
leader and may find leaders dominating. The fact that a leader is not always required proves that leadership is just
an asset and is not essential.
Differences In Perspectives
Managers think incrementally, whilst leaders think radically. Managers do things right, while leaders do the right
thing. This means that managers do things by the book and follow company policy, while leaders follow their own
intuition, which may in turn be of more benefit to the company. A leader is more emotional than a manager. Men
are governed by their emotions rather than their intelligence. This illustrates why teams choose to follow leaders.
Leaders stand out by being different. They question assumption and are suspicious of tradition. They seek out the
truth and make decisions based on fact, not prejudice. They have a preference for innovation.

Subordinate as a Leader
Often with small groups, it is not the manager who emerges as the leader. In many cases it is a subordinate
member with specific talents who leads the group in a certain direction. Leaders must let vision, strategies, goals,
and values be the guide-post for action and behavior rather than attempting to control others.
When a natural leader emerges in a group containing a manager, conflict may arise if they have different views.
When a manager sees the group looking towards someone else for leadership he may feel his authority is being
questioned.
Loyalty
Groups are often more loyal to a leader than a manager. This loyalty is created by the leader taking responsibility
in areas such as:

Taking the blame when things go wrong.


Celebrating group achievements, even minor ones.
Giving credit where it is due.

The leader must take a point of highlighting the successes within a team, using charts or graphs, with little
presentations and fun ideas.
Leaders are observant and sensitive people. They know their team and develop mutual confidence within it.
The Leader Is Followed. The Manager Rules
A leader is someone who people naturally follow through their own choice, whereas a manager must be obeyed.
A manager may only have obtained his position of authority through time and loyalty given to the company, not
as a result of his leadership qualities. A leader may have no organizational skills, but his vision unites people
behind him.
Management Knows How It Works
Management usually consists of people who are experienced in their field, and who have worked their way up the
company. A manager knows how each layer of the system works and may also possess a good technical
knowledge. A leader can be a new arrival to a company who has bold, fresh, new ideas but might not have
experience or wisdom.
Conclusion
Managing and leading are two different ways of organizing people. The manager uses a formal, rational method
whilst the leader uses passion and stirs emotions. William Wallace is one excellent example of a brilliant leader
but could never be thought of as the manager of the Scots!

TASK SHEET 3:
Are these statements true or false? Correct the false statements:
a)
b)
c)
d)
e)
f)
g)

Leadership does not make a manager successful.


Leadership is required no matter the circumstances.
Managers are demonstrative; they always show their emotions.
Leaders are more concerned with innovation rather than tradition.
Conflicts never occur between leaders and managers.
A leader may be the scapegoat of a company.
People tend to follow their leaders and obey their managers.

TASK SHEET 4:
Fill in the blanks with the following words or phrases. Choose the most appropriate form for each context:
lead off

lead out
lead up to

lead on
lead the way
lead to
leadership
leading

leader
lead

1. She him to think that she would eventually accept his proposal of marriage.
2. He managed to maintain his of the party despite heavy opposition.
3. He is a figure in industry. His results speak for him.
4. In fashion she has always . She likes to take the initiative and always be the first.
5. I could tell by her allusions that she something.
6. The incident his resignation.
7. We have decided to launch a new product. That will be the item on the agenda.
8. William Wallace is one excellent example of a brilliant military in the history of the Scots.
9. He her and they began a rumba.
10. the victorious Norman invasion of England by William I, Duke of Normandy.
TASK SHEET 5:
Fill in the blanks with the following words or phrases. Choose the most appropriate form for each context.
to manage
managed currency
manager (Mgr.)
managerial
1.
2.
3.
4.
5.

manage with
manageable

management
managing director (MD)

Such a large amount of work is not by one person.


He lives well, but I cant understand haw he it on such a small income.
The new governess the child exemplary skill.
A poor will lead our company to disaster.
is a currency whose value is established and maintained by deliberate governmental action in
contrast to the gold standard.
6. The class of society is expected to take action against the governments totalitarian policy.
7. A good should also keep pace with new technologies.
8. A PA/ secretary position to of electronics company in Tokyo was advertised yesterday in
Newsweek.

SECTION C: MARKETING
Here is a modern definition of marketing (as opposed to selling):
There will always, one can assume, be a need for some selling. But the aim of marketing is to make
selling superfluous. The aim of marketing is to know and understand the customer so well that the
product or service fits him and sells itself. Ideally, marketing should result in a customer ready to buy.
(Peter Drucker: Management: Tasks, Responsibilities, Practices)

TASK SHEET 1:
Comment upon Peter Druckers definition of marketing.
TASK SHEET 2:
Complete the following definition of marketing, by inserting these verbs in the gaps below:

design

develop

identify

influence

modify

persuade

Marketers have to: (1) or anticipate a consumer need; (2) a product or


service that meets the need better than any competing products or services; (3) target
customers to try the product or service; and, in the long term, (4).. it to satisfy changes in
consumer needs or market conditions. Marketers can (5).. particular features, attractive
packaging and effective advertising, that will (6) consumers wants. Marketing thus
combines market research, new product development, distribution, advertising, promotion, product
improvement and so on.

TASK SHEET 3:
Match up the words or expressions on the left with the definitions on the right:

1. distribution channel

A. all the companies or individuals involved in moving a particular


good or service from the producer to the consumer

2. to launch a product

B. an idea for a new product, which is tested with target consumers


before the actual product is developed

3. market
opportunities

C. attributes or characteristics of a product: quality, price,


reliability

4. market research

D. dividing a market into distinct groups of buyers who have different


requirements or buying habits

5. market segmentation E. places where goods are sold to the public shops, stores, kiosks,
market stalls, etc
6. packaging

F. possibilities of filling unsatisfied needs in sectors in which a


company can profitably produce goods or services

7. points of sale

G. someone who contacts existing and potential customers and tries


to persuade them to buy goods or services

8. product concept

H. collecting, analyzing and reporting data relevant to a specific


marketing situation (such as proposed new product)

9. product features

I. to introduce a new product onto the market

10. sales representative

J. wrappers and containers in which products are sold

THE CENTRALITY OF MARKETING


1.

The selling and marketing concepts


Most management and marketing writers now distinguish between selling and marketing. The selling concept
assumes that resisting consumers have to be persuaded by vigorous hard-selling techniques to buy non-essential
goods or services. Products are sold rather than bought. The marketing concept, on the contrary, assumes that
the producers task is to find wants and fill them. In other words, you dont sell what you make, you make what
will be bought. As well as satisfying existing needs, marketers can also anticipate and create new ones.

2.

Identifying market opportunities


Marketers are consequently always looking for market opportunities profitable possibilities of filling unsatisfied
needs or creating new ones in areas in which the company is likely to enjoy a differential advantage, due to its
distinctive competencies (the things it does particularly well). Market opportunities are generally isolated by
market segmentation. Once a target market has been identified, a company has to decide what goods or services to
offer. This means that much of the work of marketing has been done before the final product or service comes into
existence. It also means that the marketing concept has to be understood throughout the company, e.g. in the
production department of a manufacturing company as much as in the marketing department itself. The company
must also take account of the existence of competitors, who always have to be identified, monitored and defeated
in the search for loyal customers.

3.

The importance of market research


Rather than risk launching a product or service solely on the basis of intuition or guesswork, most companies
undertake market research (GB) or marketing research (US). They collect and analyze information about the size
of a potential market, about customers reactions to particular product or service features and so on. Sales
representatives, who also talk to customers, are another important source of information.

4.

The marketing mix


Once the basic offer, e.g. a product concept, has been established, the company has to think about the marketing
mix, i.e. all the various elements of a marketing programme, their integration and the amount of effort that a
company can expend on them in order to influence the target market. The best-known classification of these
elements is the 4Ps: product, place, promotion, and price. Aspects to be considered in marketing products
include quality, features (standard and optional), style, brand name, size, packaging, services and guarantee. Place
in a marketing mix include such factors as distribution channels, locations of points of sale, transport, inventory
size and so on. Promotion groups together advertising, publicity, sales promotion and personal selling, while price
includes the basic list price, discounts, the length of the payment period, possible credit terms, and so on. It is the
job of a product manager or a brand manager to look for ways to increase sales by changing the marketing mix.

5.

Company-to-company marketing
It must be remembered that quite apart from customer markets (in which people buy products for direct
consumption) there exists an enormous producer or industrial or business market, consisting of all the individuals
and organizations that acquire good and services that are used in the production of other goods, or in the supply of
services to others. Few consumers realize that the producer market is actually larger than the consumer market,
since it contains all the raw materials, manufactured parts and components that go into consumer goods, plus
capital equipment such as buildings and machines, supplies such as energy, pens and paper and services ranging
from cleaning to management consulting, all of which have to be marketed. There is consequently more industrial
than consumer marketing, even though ordinary consumers are seldom exposed to it.

MARKET STRUCTURE AND COMPETITION


MARKET LEADERS, CHALLENGERS AND FOLLOWERS
1.
Market leaders
In most markets there is a definite market leader: the firm with the largest market share. This often the first
company to have entered the field, or at least the first to have succeeded in it. The market leader is frequently able
to lead other firms in the introduction of new products, in price changes, in the level or intensity of promotions,
and so on.
2.
Expanding markets
Market leaders usually want to increase their market share even further, or at least to protect their current market
share. One way to do this is to try to find ways to increase the size of the entire market. Contrary to a common
belief, wholly dominating a market, or having a monopoly, is seldom an advantage: competitors expand markets
and find new uses and users for products, which enriches everyone in the field, but the market leader more than its
competitors. A market can also be expanded by stimulating more usage: for example, many households no longer
have only one radio or cassette player, but perhaps one in each room, one in the car, plus a Walkman or two.
3.
Market challengers
In many markets, there is often also a distinct market challenger, with the second-largest market share. In the car
hire business, the challenger actually advertises this fact: for many years Avis used the slogan: Were number
two. We try harder. Market challengers can either attempt to attack the leader, or to increase their market share
by attacking various market followers.
4.
Market followers
The majority of companies in any industry are merely market followers which present no threat to the leader.
Many market followers concentrate on market segmentation; finding a profitable niche in the market that is not
satisfied by other goods or services and that offers growth potential or gives the company a differential advantage
because of its specific competencies.
5.
Establishing a niche Dangers faced by market followers
A market follower which doesnt establish its own niche is in a vulnerable position: if its product doesnt have a
unique selling proposition there is no reason for anyone to buy it. In fact, in most established industries, there is
only room for two or three major companies: think of soft drinks, soap and washing powders, jeans, sport shoes
and so on. Although small companies are generally flexible and can quickly respond to market conditions, their
narrow range of customers causes problematic fluctuations in turnover and profit. Furthermore, they are
vulnerable in a recession when, largely for psychological reasons, distributors, retailers and customers all prefer to
buy from big, well-known suppliers.
SUMMARY
In most markets there is a leader that strongly influences other firms in the introduction of new
products, price changes, promotions and so on. There is frequently also a market challenger, with
the second-largest market share, which can attempt to increase its market share by attacking either
the leader or some market followers. Market followers often concentrate on profitable niche
products that are in some way differentiated from the products of larger companies.

TASK SHEET 4:
Match the following words or expressions with their definitions, on the right:
1. recession

A. a companys sales expressed as a percentage of the total market

2. promotions

B. short-term tactics designed to stimulate stronger sales of a product

3. slogan

C. the situation in which there is only one seller of a product

4. monopoly

D. companies offering similar goods or services to the same set of


customers

5. market share

E. a short and easily memorized phrase used in advertising

6. competitors

F. the division of a market into submarkets according to the needs or


buying habits of different groups of potential customers

7. turnover

G. a small and specific market segment

8. niche

H. a factor which makes you superior to competitors in a certain respect

9. differential factor

I. a businesss total sales revenue

10. market segmentation

J. a period during which an economy is working below its potential

TASK SHEET 5:
Match up the words in the box with the definitions below
barriers to entry cartel
monopolistic competition
1.
2.
3.
4.
5.
6.
7.
8.

dominant-firm oligopoly economies of scale


monopsony natural monopoly
oligopoly

monopoly
perfect competition

exists when products are homogenous and there are a great many firms to small to
have any influence on the market price and firms can easily enter and exit the industry.
A is a market in a particular product in which a single producer can fix an artificial
price.
is the situation in which there is only one buyer.
A is an industry in which the efficient existence of more than one producer is
impossible; examples include public utilities such as water, gas and electricity, where it would be inefficient
to have several competing companies laying their own networks of pipes or cables.
exists when many producers of slightly differentiated products are able to sell them at
well above their marginal cost.
An is a concentrated market dominated by a few large suppliers. This is very frequent
in manufacturing because of economies of scale and the cost barriers of entering an industry.
are factors which cause the average cost of producing something to fall as output
increases.
are economical or technical factors that make it difficult or impossible for firms to
enter a market or compete with existing suppliers.

9.

A. is one in which a market leader can indicate its preferred price to smaller
competitors.
10. A is a group of producers or sellers who fix prices and quantities in order to avoid competition and
increase profits. This is illegal in many countries, most notably the USA.

TASK SHEET 6:
Classify the following markets according to whether you think they are examples of the following:

a dominant-firm oligopoly

arms and weapons system

monopolistic competition

cars (automobiles)

monopoly

wheat

monopsony

confectionery (chocolate bars)

oligopoly

mainframe computers

perfect competition

rail transport

MARKET CONCENTRATION
The arguments against market concentration, or at least against monopoly, are obvious: monopolists are
always able to make excessive profits and businesses facing no competition have no incentive to find
ways to reduce costs. The only common argument in favor of monopoly concerns patents: it is right that
inventors should be granted a temporary monopoly as a reward for innovation or discovery.
Although some people argue that any barrier to competition will inevitably lead to inefficiency, a
counter argument is that erecting barriers for example, by process innovation, product differentiation,
persuasive advertising, or pricing policy in order to be successful and to make competitors less
successful, is a normal part of rivalry and competition. According to this view, market concentration
arises naturally from a few successful firms growing larger as a result of increased efficiency ,
innovation and economies of scale in production, distribution, R&D, capital financing and so on.
Some people even argue that monopolies are always temporary and consequently not a problem. For
example, although entrepreneurs introduce new products and techniques and open up new markets, their
products are soon competed away by rivals. Even profits made by a natural monopoly will be temporary,
because they are an incentive for entrepreneurs to discover and implement new low-cost technologies.
An example here would be telecommunications. According to this position, the government only needs
to ensure that there is no monopoly over important inputs, because there will never be a monopoly of
scientific or artistic genius or business ideas.

GRAMMAR SECTION
ADJECTIVES AND PARTICIPLE CONSTRUCTIONS

Position of Adjectives

An adjective can go in two positions in a sentence:


(a) before the noun Most top executives have expense accounts.
(b)
after the following verbs: appear, be, feel, look seem, smell, sound, taste

The report seemed very boring.


(c)
after the noun: this position is possible for longer adjectival phrases or adjectives
ending in able or ible Its the only flight available.
Hes the man wearing dark glasses.
(d) before and after the noun, with the following adjectives different, similar, next, last,
first, second, easy, difficult, impossible and comparatives and superlatives. This is
common in longer adjectival phrases. You are the most useless secretary in the firm!
If there are a number of adjectives to be placed before the noun, they go in the order shown below:
1
What qualities
the noun has:
size, shape,
weight, age,
growth, abilities,
etc.

2
3
What
Where the noun
color the comes from:
noun is. town, country,
class, category,
etc.

4
What
the noun
is made
of.

5
What the
nouns
function is.

Longer
adjectival
NOUN phrases.

Remember that: you would normally only put two or three adjectives before the noun. The adjectives
following the noun can go in any order.

Comparatives and Superlatives


Shakespeares later plays were more serious than his earlier ones.
What is the longest river in the world?
Form
1. One-syllable adjectives add er and est
:
cheap/ cheaper/ cheapest
tall/ taller/ tallest
In adjectives of one vowel and one consonant, the consonant is doubled.
big/ bigger/ biggest
hot/ hotter/ hottest
thin/ thinner/ thinnest
2. Adjectives of three or more syllables add more and most.
beautiful/ more beautiful/ most beautiful
interesting/ more interesting/ most interesting
3. Adjectives of two syllables. Those that end in er y le are like (1).
clever/ cleverer/ cleverest
funny/ funnier/ funniest
simple/ simpler/ simplest
Those that end in ful or ing and most other two-syllabled adjectives are like (2).
careful/ more careful/ most careful
boring/ more boring/ most boring
depressed/ more depressed/ most depressed
Some two-syllabled adjectives take both forms.
polite/ politer/ politest
polite/ more polite/ most polite
If you are not sure which one is correct, use more and most. You will make fewer mistakes!
4. There are some irregular adjectives.
good/ better/ best
bad/ worse/ worst
Look at the following examples to see how comparatives and superlatives are used in sentences.
Its the biggest in the world.
Hes the best in the class.
This is the best book Ive ever read.
Actions can also be compared.
Riding a bike is easier than riding a horse.

Its nicer to go with someone than to go alone.

5. Constructions with comparisons: adjectives and adverbs


Positive: As as (equal comparison)
She is as tall as me. (adjective)
She speaks French as fluently as a Frenchman. (adverb)
Negative: Not as/so as (unequal comparison)
He isnt as/so lucky as me. (adjective)
Your mistake is not as/so bad as his. (adjective)
She doesnt snore as loudly as her husband. ( adverb)
Modifiers
1. It is important to distinguish between two kinds of adjective, limit and gradable adjectives.
Limit adjectives already have strong meanings.
Exhausted means very tired.
Delicious means very tasty.
For this reason, it sounds odd to say very exhausted or very delicious.
Gradable adjectives express qualities that can exist in different strengths.
A person can be more or less tall, or more or less attractive.
A thing can be more or less big, or more or less dirty.
So we can use modifiers like fairly, quite, very, extremely with gradable adjectives like tall, attractive,
big, dirty, tired.
Examples:
gradable
big
dirty
good
angry
frightened
difficult

limit
vast, huge, enormous
filthy, revolting
perfect, marvelous, wonderful
furious
terrified
impossible

2. To modify limit adjectives, we need an extreme modifier.


absolutely huge
completely terrified
quite perfect
utterly ridiculous
totally blind
Some modifiers and adjectives go together and some do not. It takes time and practice to learn which are
used together. We can say absolutely furious but not completely furious for example.
The best advice is to start by recognizing the different modifiers when you are listening and reading, and
if you are in doubt, use absolutely, which can go with all limit adjectives.
3. Quite
Quite can be used with limit adjectives to mean absolutely.
quite right
sure
extraordinary
Quite can also be used with gradable adjectives and its meaning changes according to stress and
intonation.
Again, practice is needed in hearing and reading these expressions in context to know when to use them.
Participle constructions
You can use a participle construction in written English where, in spoken English, it is more common to
use a subordinate clause or two main clauses.
You can use a present participle and a past participle:
(a) as an adjective: a growing demand, the agreed amount, an interesting proposal, damaged
stock
Remember that: the present participle is active in meaning and the past participle is passive.
(b) in place of who/which + clause
The two crates containing the goods were taken to the docks this morning. (= The two crates
which contain the goods )
The risks covered are stated in the insurance policy.(= The risks which are covered )

Participles are often used to describe two actions that happen:


a.

at the same time


She sat by the fire reading a book.
He walked down the road singing a song.
He went to the party dressed as a monster.

b.

one after the other


Loosening his tie, he set down in the chair.
Opening his suitcase, he took out a thousand pounds in five-pound notes.

If it is important to show that one action has finished before the other begins, the perfect
participle is used.
Having finished lunch, we set off.
Having had a shower, she got dressed.
c.

two actions that happen one because of another


Being a mean person, he never bought anything for anybody. (i.e. Because he was a mean
person )
Not knowing what else to do, I waited patiently.
Weakened by years of bed health, she could hardly sit up in bed.

Notice that in these three uses, the subject of the main verb must be the same as the subject of the
participle.

EXERCISE 1:
Put the adjectives in a suitable position in the sentences below them.
(a) English, tweed, long, with wide lapels
He was wearing a coat.
(b) antique, waterproof, wooden, china, strengthened with metal bands
The goods were packed in a crate.
(c) marketing, manufacturing, expanding, with proven ability, European, dynamic, young
This company requires a manager.
(d) metal, filing, tall, five-drawered, thick, yellow, cardboard, correspondence
He put the file in the cabinet.
(e) latest, marketing, middle class, consumer, potential, leisure
The techniques have accurately predicted behavior in the market.
(f) managing, English, fat, middle-aged, boring, sales
A meeting was held by the director.
EXERCISE 2:
Read the following adjectives and try to figure out which have a positive or a negative meaning.
Make up sentences to illustrate your choice.
cheerful
optimistic
light-hearted
carefree

sociable
talkative
inquisitive
nosy

cautious
fussy
sensitive
insecure

vain
self-centered
aggressive
determined

e.g.: sensitive can have a positive or a negative meaning:


- Hes a very sensitive person who appreciates beauty. (=with fine feelings)
- Dont be so sensitive I was only joking. (=easily hurt)
In the negative sense, we can also say over-sensitive:
- Now he wont speak to me I think hes being a bit over-sensitive.
EXERCISE 3:
Each of these sentences contains a mistake. Can you correct them?
a)
b)
c)
d)
e)

Shes much more taller than her brother.


Goats arent as stupid than sheep.
He writes far tidier than I do.
Im heavier than him ten kilos.
Hes most boring person Ive ever met.

f) Everest is the most high mountain in the world.


g) The United States isnt nearly bigger than Canada.
h) It wasnt as interesting as I expected it.

EXERCISE 4:
Which group (limit or gradable) do these adjectives belong to? Can you think of their equivalent
in the other group?
angry
cold
deafening

enormous
filthy
hilarious

pleased
spotless
surprised

exhausted
brilliant
upset

EXERCISE 5:
Replace the words in italics with an adjective, making any necessary changes in word order.
a) All men are liable to make mistakes.
b) Many people are easily influenced by flattery.
c) The police admitted to having made a mistake that was very much to be regretted in accusing an
innocent man.
d) In Wales, there is a village whose name is, for English people, impossible to pronounce.
e) Television exerts an influence that has a widespread effect on the lives of our children.
f) Most teachers prefer a class that is fairly consistent in having pupils of the same level.
g) The machine that didnt work properly had to be returned to the makers.
h) The quality that makes a picture a masterpiece is often impossible to define or explain.
i) After he had followed a course in elocution, his speech was quite without faults.
j) Although the two ships collided with a sharp impact, the damage was found, on inspection, to be of
little or no significance.

EXERCISE 6:
Complete the sentences with participial clauses introduced by the verbs in italics, using the form suggested:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)

Jones put up a good fight in the first few rounds of the contest, ( punch, present participle)
. I think my advice could help. ( have, perfect participle)
They fount the treasure ( hide, past participle)
, we put up at the nearest hotel. ( decide, present participle)
I last saw him ( go, present participle)
, you cannot go back on your word. ( promise, perfect participle)
, I thought it best to remain hidden until after midnight.( overhear, perfect participle)
Motorists should take extra care when ( drive, present participle)
, the climbers decided to put off their attempt until the following week. ( tell, passive perfect
participle)
, the speaker suggested that Government was mistaken in its policy. ( choose, present participle)

EXERCISE 7:
Rewrite the following sentences using who/ which + clause. Make sure you put the verb in the
correct tense.
(a) Candidates possessing the qualification and experience specified in the advertisement
published in todays newspaper should request an application form by sending us a letter
containing a stamped addressed envelope.
(b) Your responsibilities, involving a great deal of traveling are to monitor the movements of
representatives working all over the region shown on this map.
(c) Franco domicile is a term favoured by small importers wishing to know what the goods
delivered to their warehouse will cost.
(d) All visitors arriving in this building must complete a registration card stating their name,
business and the person they wish to see.
(e) The supplier sends a copy of the advice note to the person buying the goods before the goods
ordered have been dispatched. The supplier then sends the goods accompanied by a delivery
note duplicating the advice note.
(f) Thank you for your instructions arranging insurance for your consignment being sent to New
York. We confirm that the policy issued on the 24th of this month and covering all risks will
be sent to you as soon as we receive settlement of the amount stated below.
EXERCISE 8:
Rewrite the following sentences using either because + clause, while + clause, after + clause or
when + clause:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)

The goods being entirely suitable, we would like to place another order.
Examining the consignment, our agent found that two cases were damaged.
Taking the consignment to the port, our driver met with a serious accident.
Having received no communication from you since dispatch, we must ask you to explain
why our sight draft has not been honored.
Not knowing how the consignment is to be packed, we must ask you for further details.
Having confirmed your credit, we found our client had cancelled the order.
Having given you all the necessary information, we hope to hear from you shortly.
Visiting the Munich trade Fair, we had the pleasure of meeting your representative.
Learning of your present financial difficulties, we are prepared to allow you sixty days credit.
Having had the opportunity of seeing the full range of your products, we would like to place
an order with you.

EXERCISE 9:
Join the pairs or groups of sentences, using participles and making any necessary changes in word
order.
e.g.: The employers issued an ultimatum. They threatened all workers with dismissal if they didnt return
to work by the following Monday.
The employers issued an ultimatum, threatening all workers with dismissal if they didnt return to
work by the following Monday.
1. I was interested to see what would happen. I therefore stayed till the end of the meeting.
2. I found I had wasted my time going to the sale. The best bargains had already been snapped up earlier
in the day.
3. The rescue party decided that it would be hopeless to carry out a search while the fog persisted. They
put off their rescue bid until the next day.
4. He was brought up in the belief that pleasures were sinful. As a result, he now leads an ascetic life.
5. The children had a weeks holiday. The school had been closed because of an influenza epidemic.
6. One can allow for the fact that the orchestra was under-rehearsed. Even so, last nights concert was
extremely disappointing.
7. He was very angry when his car broke down. He had had it serviced only a week before.
8. No one was surprised at the change in Bank Rate. It had already been confidently expected by
investors.
9. The man lost interest in his work. He had been passed over in favor of an outsider when a senior
position became vacant.
10. We decided not to visit Oxford. It was then the time of the summer vacation. There were few students
in residence.
11. He had to put off buying a house. The bank was unable to lend him any money at that time.
12. The police found the small boy. He was wandering about the docks. He was, apparently, looking for
somewhere to spend the night.

BASIC VOCABULARY:
a quota o cot parte
an auction vnzare prin licitaie
barter troc
bull market - pia financiar ale crei cursuri sunt n cretere
canvasser prospector de pia
consumer goods bunuri de consum
display stand stand de prezentare
follow-up urmrire
foreign/overseas trade comer exterior
free trade liber schimb
hard-sell - vnzare agresiv
hike price o mrire a preurilor
home trade comer intern
market - pia
market maker - cumprtor/revnztor de titluri la Bursa din Londra
market research - studiu de pia
niche o pia
on display expus
outlet debueu
patron un client fidel
price-fixing nelegere ilicit (n privina preurilor)
punter un cumprtor, un client
sample mostr
target int
the retail price index indicele preurilor cu amnuntul
the standard of living nivelul de trai
to buy wholesale a cumpra angros
to comission a survey a comanda un studiu
to hike price (US) a mri, crete preuri
to jack up a mri (preuri)
to kickstart the economy a impulsiona economia
to pick up the tab a achita nota de plat
to put out to tender a lansa o cerere de ofert
to sell retail a vinde endetail
to shop around a compara preurile
to undercut, undersell a vinde mai ieftin
trade fair trg comercial
trade gap deficit comercial
trial offer ncercare gratuit

FURTHER READINGS
THE ESSENCE OF MARKETING
Marketing - activities involved in getting goods from the producer to the consumer. The producer is
responsible for the design and manufacture of goods. Early marketing techniques followed production
and were responsible only for moving goods from the manufacturer to the point of final sale. Now,
however, marketing is much more pervasive. In large corporations the marketing functions precede the
manufacture of a product. They involve market research and product development, design, and testing.
Marketing concentrates primarily on the buyers, or consumers, determining their needs and desires,
educating them with regard to the availability of products and to important product features, developing
strategies to persuade them to buy, and, finally, enhancing their satisfaction with a purchase. Marketing
management includes planning, organizing, directing, and controlling decision making regarding
product lines, pricing, promotion, and servicing. In most of these areas marketing has complete control;
in others, as in product-line development, its function is primarily advisory. In addition, the marketing
department of a business firm is responsible for the physical distribution of the products, determining
the channels of distribution that will be used and supervising the profitable flow of goods from the
factory or warehouse.
Tailoring the Product
Merchandise generally similar in appearance, that is, in style or design, but varying in such elements
as size, price, and quality is collectively known as a product line. Product lines must be intimately
correlated with consumer needs and wants.
In order to develop a line effectively, marketing research is conducted to study consumer behaviour.
Changing attitudes and modes of living directly affect the saleability of products. For example,
the trend to informal dress has changed clothing styles dramatically. Also, a high-income economy
triggers a demand for products very different from those selected in a declining business cycle. The
availability or lack of disposable income, meaning income over and above that spent for basic
necessities such as food, shelter, and clothing, affects the buying pattern for so-called luxury products.
Similarly, the purchase of durable or long-lived goods, such as refrigerators, automobiles, and houses,
may be deferred when the economy is declining and may increase rapidly in periods of prosperity.
Staple products, such as food and clothing, tend not to be seriously affected by the business cycle.
The life cycles of products require careful study. Virtually all product ideas lose in time the novelty
that initially attracted purchasers of the merchandise. Manufacturers may also accelerate the
obsolescence of a product by introducing new, more desirable features. Consumers today are
conditioned to expect product innovations and tend to react favourably to new features. This has an
important bearing on the usable life deliberately designed into a product, which in turn has a significant
effect on the costs to the manufacturer and ultimately on the price to the consumer. Competition
between manufacturers of similar products naturally accelerates the speed of changes made in those
products.

Pricing the Product


The two basic components that affect product pricing are costs of manufacture and competition in
selling. It is unprofitable to sell a product below the manufacturer's production costs and unfeasible to
sell it at a price higher than that at which comparable merchandise is being offered. Other variables also
affect pricing. Company policy may require a minimum profit on new product lines or a specified
return on investments, or discounts may be offered on purchases in quantity.
Attempts to maintain resale prices were facilitated for many years under federal and state fair-trade
laws. These have now been nullified, thereby prohibiting manufacturers from controlling the prices set
by wholesalers and retailers. Such control can still be maintained if the manufacturers wish to market
directly through their own outlets, but this is seldom feasible except for the largest manufacturers.
Attempts have also been made, generally at government insistence, to maintain product-price
competition in order to minimize the danger of injuring small businesses. Therefore, pricing decisions
are reviewed by the legal department of the marketing organization.
Promoting the Product
Advertising, personal (face-to-face) selling, and sales promotion are the methods for inducing people
to buy.
The primary objective of advertising is to presell the product, that is, to convince consumers to
purchase an item before they actually see and inspect it. Most companies consider this function so
important that they have allotted extensive budgets and engaged special advertising agencies to develop
their program of advertising. By repeatedly exposing the consumer to a brand name or trademark, to the
appearance or package of a product, and to special features of an item, advertisers hope to incline
consumers toward a particular product. Advertising is most frequently done on television, radio, and
billboards; in newspapers, magazines, and catalogs; and through direct mail to the consumers. In recent
years, advertising agencies have been joining forces to become giant agencies, making it possible for
them to offer their clients a comprehensive range of worldwide promotion services.
As the costs of personal selling have risen, the utilization of salespeople has changed. Simple
transactions are completed by clerks. Salespeople are now used primarily where the products are
complex and require careful explanation or customized application. For example, in the typical
automobile sale, the salesperson's activities generally centre on negotiating price and arranging terms of
payment; the actual product has usually already been presold through advertising..
The purpose of sales promotion is to supplement and coordinate advertising and personal selling; this
has become increasingly important in marketing. Often it is necessary to work closely with the dealers
who handle a manufacturer's products if the products are to move satisfactorily. Displays must be
supplied and set up, and cooperative advertising programs may be worked out. Store clerks should be
trained in knowledge of the manufacturer's products. Often the manufacturer must provide services
such as installation and maintenance for a specified time period. On the consumer level, sales
promotion may involve special inducements such as discount coupons, contests, a premium with the
purchase of a product, or a lower price on the purchase of a second item

Distributing the Product


Some products are marketed most effectively by direct sale from manufacturer to consumer. Among
these are durable equipmentfor example, computers, office equipment, industrial machinery and
supplies, and consumer specialties such as vacuum cleaners and life insurance. The direct marketing of
products such as cosmetics and household needs is very important. Formerly common door to door
products, these are now usually sold by the more sophisticated house party technique.
Direct marketing by mail has been expanded to virtually all types of products and services. Working
people find it easy to shop in their leisure hours by catalog, and comparison shopping is made easier
because catalogs generally contain extensive product information. For retailers, the use of catalogs
makes it possible to do business considerably beyond their usual trading area and with a minimum of
overhead. Also important are credit cards, which have made it relatively easy to purchase by mail or
telephone even such high-priced items as appliances, electronic equipment, and cameras. At least half
the nation's 50 leading corporations have mail-order divisions.
Television is a potent tool in direct marketing because it facilitates the demonstration of products in
use. Direct sale of all kinds of goods to the public via home-shopping clubs broadcasting on cable
television channels is gaining in popularity. Also carving its own niche is telephone marketing, called
telemarketing, a technique used in selling to businesses as well as to consumers. Most consumer
products, however, move from the manufacturer through agents to wholesalers and then to retailers,
ultimately reaching the consumer. Determining how products should move through wholesale and retail
organizations is another major marketing decision.
Wholesalers distribute goods in large quantities, usually to retailers, for resale. Some retail businesses
have grown so large, however, that they have found it more profitable to bypass the wholesaler and deal
directly with the manufacturers or their agents. Wholesalers first responded to this trend by adapting
their operations so that they moved faster and called for a lower margin of profit. Small retailers fought
back through cooperative wholesaling, the voluntary banding together of independent retailers to
market a product. The result has been a trend toward a much closer, interlocking relationship between
wholesaler and independent retailer.
Retailing has undergone even more change. Intensive preselling by manufacturers and the
development of minimum-service operations, for example, self-service in department stores, have
drastically changed the retailer's way of doing business. Supermarkets and discount stores have become
commonplace not only for groceries but for products as diversified as medicines and gardening
equipment. More recently, warehouse retailing has become a major means of retailing higher-priced
consumer goods such as furniture, appliances, and electronic equipment. The emphasis is on generating
store traffic, speeding up the transaction, and rapidly expanding the sales volume. Chain storesgroups
of stores with one ownershipand cooperative groups have also proliferated. Special types of retailing,
for example, vending machines and convenience stores, have also developed to fill multiple needs.
Transporting and warehousing merchandise are also technically within the purview of marketing.
Products are often moved several times as they go from producer to consumer. Products are carried by
rail, truck, ship, airplane, and pipeline. Efficient traffic management determines the best method and
timetable of shipment for any particular product.

The Marketing Profession


Perhaps nothing is more conducive to the success of a firm than the image that it conveys of itself to
the public. The marketing activities of a company, because they act directly on the consumer, do most
to shape this image and thus must be developed with great care. As marketing has become increasingly
more complex, a need has arisen for executives trained in the social sciences who also possess
statistical, mathematical, and computer backgrounds. Many colleges and universities now have
programs designed to train marketing executives. Courses are offered at the undergraduate and the
graduate level in such specialized fields as advertising, administrative practices, financial management,
production, human relations, retailing, and personnel administration.
In recent years, as many U.S. manufacturing industries such as steel and automobiles have been
weakened because of foreign competition, marketing departments have become increasingly
responsible for generating profitable sales volume. Thus, their stature in top-level business decision
making has been enhanced. This trend gives every indication of continuing in the foreseeable future. As
competition continues to increase and businesses become even more diversified, the marketing
profession is likely to provide more personnel in the ranks of top management.

You might also like