‘Translation-1’ point
►Translate into Russian:
(1) Critics have charged that some producers follow a program of planned obsolescence causing their products to become obsolete before they need replacement. In many cases, producers have been accused of continually changing consumer concepts of acceptable styles in order to encourage more and earlier buying. An obvious example is constantly changing clothing fashions. Producers have also been accused of holding back attractive functional features, then introducing them later to make older models obsolete. Critics claim that this practice is frequently found in the consumer electronics and computer industry. The Japanese camera, watch and consumer electronics companies frustrate consumers because rapid and frequent model replacement has created difficulties in obtaining spare parts for old models; dealers refuse to repair outdated models and planned obsolescence rapidly erodes basic product values. Finally, producers have been accused of using materials and components that will break, wear, rust or rot sooner than they should. For example, many drapery manufacturers are using a higher percentage of rayon in their curtains. They argue that rayon reduces the price of the curtains and has better holding power. Critics claim that using more rayon causes the curtains to fall apart sooner. European consumers have also found, to their annoyance, how rapidly certain European brands of toasters rust - for an appliance that rarely gets into contact with water, this is an amazing technological feat!
(2) Marketers respond that consumers like style changes; they get tired of the old goods and want a new look in fashion or a new design in cars. No one has to buy the new look, and if too few people like it, it will simply fail. Companies frequently withhold new features when they are not fully tested, when they add more cost to the product than consumers are willing to pay, and for other good reasons. But they do so at the risk that a competitor will introduce the new feature and steal the market. Moreover, companies often put in new materials to lower their costs and prices. They do not design their products to break down earlier, because they do not want to lose their customers to other brands. Thus, much so-called planned obsolescence is the working of the competitive and technological forces in a free society - forces that lead to ever-improving goods and services.
‘THEORY-3’ POINT
Market penetration
(1) Penetration pricing is the pricing technique of setting a relatively low initial entry price, a price that is often lower than the eventual market price. The expectation is that the initial low price will secure market acceptance by breaking down existing brand loyalties. Penetration pricing is most commonly associated with a marketing objective of increasing market share or sales volume, rather than short term profit maximization.
(2) The advantages of penetration pricing to the firm are:
It can result in fast diffusion and adoption. This can achieve high market penetration rates quickly and take the competition by surprise, not giving the rivals time to react.
It can create goodwill among the all-important early adopter segment. It can also create valuable word of mouth.
It creates cost control and cost reduction pressures from the start, leading to greater efficiency.
It discourages the entry of competitors. Low prices act as a barrier to entry.
It can create high stock turnover throughout the distribution channel. This can create critically important enthusiasm and support in the channel.
(3) The main disadvantage with penetration pricing is that it establishes long term price expectations for the product, and image preconceptions for the brand and company. This makes it difficult to eventually raise prices. Some commentators claim that penetration pricing attracts only the switchers (bargain hunters), and that they will switch away from you as soon as you increase prices. There is much controversy over whether it is better to raise prices gradually over a period of years (so that consumers don’t notice), or employ a single large price increase (which is more efficient). A common solution to the price expectations problem is to set the initial price at the long-term market price, but include an initial discount coupon. In this way, the perceived price points (prices for which demand is relatively high) remain high even though the actual selling price is low. Another potential disadvantage is that the low profit margins (profit margin/net margin/mark-up = selling price – total costs (direct production costs + other costs such as rent, salaries, administration)) may not be sustainable long enough for the strategy to be effective.
(4) Price Penetration is most appropriate when:
Substantial economies of scale are available
The product is suitable for a mass market
The product will face stiff competition soon after introduction
In industries where standardization is important. The product that achieves high market penetration often becomes the industry standard (Microsoft Windows) and other products, even superior products, become marginalized.
(5) An interesting variant of the price penetration strategy is the bait and hook model (also called the razor and blades business model) in which an initial product is sold at a very low price but subsequently purchased products (such as refills) are sold at a higher price. This is an almost universal tactic in the desktop printer business, with printers selling for as little as $100 and including two ink cartridges, which cost $30 each. The printer manufacturers also take measures to make sure generic cartridges are not used by making them incompatible.
►Question/Answer session:
What is penetration pricing strategy?
What are its advantages? Explain the following statement: ‘It creates cost control and cost reduction pressures from the start, leading to greater efficiency’.
What are the disadvantages of penetration strategy?
How is profit margin calculated? Be sure to use numbers to visualize your explanation.
When is penetration strategy most appropriate?
What is the bait and hook model?
►Think of real businesses in which the use of penetration strategy has been justifiable.
►Summarize the content of the text.
‘SUMMARY-2’ POINT
►Translate the phrases below into Russian and make them stick in your mind:
to set a relatively low initial entry price
the eventual market price
to secure market acceptance
to create goodwill among the all-important early adopter segment
to discourage the entry of competitors
to act as a barrier to entry
to create high stock turnover throughout the distribution channel
to attract only switchers (bargain hunters)
a discount coupon
the actual selling price
low profit margins
to face stiff competition
‘TRANSLATION-2’ POINT
►Translate into English using the expressions from ‘Summary-1’ and ‘Summary-2’ Points:
Любая компания прежде, чем представить новый товар или услугу на рынке, должна выбрать определенную стратегию установления цены. Некоторые компании предпочитают применять стратегию «снятия сливок». Что представляет собой данная стратегия? Сначала компания устанавливает максимально возможную первоначальную стоимость товара или услуги, для того чтобы быстро возместить производственные расходы. Однако такая стратегия позволяет добиться только временного увеличения продаж. Как только соперники представляют на рынке конкурирующий товар, который служит барьером для дальнейшего роста продаж, компания сталкивается с жестокой конкуренцией, начинает снижать действительную продажную стоимость своего товара и даже предлагает различные купоны с предложением скидки, для того чтобы не потерять своих клиентов и, по крайней мере, помешать проникновению других конкурентов. Существуют компании, которые применяют стратегию проникновения на рынок. Они устанавливают относительно низкую первоначальную стоимость товара или услуги с тем, чтобы привлечь как можно больше покупателей и создать таким образом свою клиентскую базу и завоевать свою рыночную долю.
‘PUZZLE-3’ POINT
►Fill in the blanks:
high prices skimming policy life cycle
penetration pricing pricing structure
low initial price adjust imitative
Pricing is a dynamic process. Companies design a (1)__________ that covers all their products. They change this structure over time and (2)__________ it to account for different customers and situations. Pricing strategies usually change as a product passes through its (3)__________. The company can decide on one of several price-quality strategies for introducing an (4)___________ product. In pricing innovative new products, it can follow a (5)__________ by initially setting (6)__________ to 'skim' the maximum amount of revenue from various segments of the market. Or it can use (7)__________ by setting a (8)__________ to win a large market share.
MAKE YOUR POINT-1
►Magic PC, a computer engineering company, has developed a new processor that is ten times more powerful than existing ones. Their product has sold very well, but is now passing from its growth stage into its maturity stage. Competitors have already entered the market.
As a member of their marketing team, suggest two promotional tools Magic PC might use. Give your reasons.
MAKE YOUR POINT-2
►Describe which strategy - market skimming or market penetration - is appropriate for the following products and why:
Colgate’s new ‘48-hour protection’ toothpaste;
Reebok’s latest, ‘new-tech’ ‘work-out’ shoes;
Burger King that has recently opened a restaurant right opposite McDonald’s in one of Moscow’s shopping centers.
‘THEORY-4’ POINT
USP
(1) Commonly referred to as a USP, a unique selling proposition is a description of the qualities that are unique to a particular product or service and that differentiate it in a way which will make customers purchase it rather than its rivals. Marketing experts used to insist that every product and service had to have a USP, at least one unique feature that could be distilled into a 60-second sales spiel, the equivalent of a single written paragraph. But this idea was usurped by the view that what really matters in marketing a product or service is its positioning, where it sits on the spectrum of customer needs. Shampoos, for instance, claim to meet all sorts of different customer needs and sit in all sorts of different positions - the need to wash dry hair or greasy hair, dark hair or blond hair, or the need to wash hair frequently or not so frequently. Few of them, however, can claim to have a unique selling proposition.
(2) Uniqueness is rare, and coming up with a continuous stream of products with unique features is, in practice, extremely difficult. Philip Kotler says that the difficulty firms have in creating functional uniqueness has made them ‘focus on having a unique emotional selling proposition (an ESP) instead of a USP’. He gives the example of the Ferrari car and the Rolex watch. Neither has a distinctive functional uniqueness, but each has a unique emotional association in the consumer’s mind.
(3) Uniqueness can be achieved in various ways.
By offering the lowest price. John Lewis, a British department store, claims that it has never been knowingly undersold. Its USP establishes it as the cheapest vendor (under certain prescribed conditions) of the items that it sells. This is a rocky route to success, however, particularly at a time when there are firms prepared to sell (temporarily) at well below cost just to establish turnover. This was the case with many of the early Internet retailing experiments. Moreover, buyers who base their purchasing decisions on price alone are often disloyal. Customers continue to go to John Lewis for many reasons other than its price promise.
By offering the highest quality. This is the Rolls-Royce approach to selling.
By being exclusive. In the information age, this is an increasingly common type of USP. More and more firms offer a unique packaging of information or knowledge.
By offering the best customer service. Domino’s Pizza became the best-selling brand in the US on the basis of its USP: ‘Fresh, hot pizza delivered in 30 minutes or less, guaranteed.’ It did not promise high quality or low price, just fast delivery. A side benefit of a USP like this is that it compels the firm’s employees to try that bit harder to achieve the promise. A firm that fails to fulfill the promise of its USP, however, is condemned to a short future if it cannot quickly come up with a new one.
By offering the widest choice. This is particularly appropriate to niche markets. A specialist cheese shop, say, can claim to offer a wider selection of cheeses than anyone else.
By giving the best guarantee. This is particularly important in industries such as the travel trade and catalogue selling, where customers pay for something upfront and then have to hope that what they think they have bought is eventually delivered.
►Question/Answer session:
How can USP be interpreted? Do you agree that ‘what really matters in marketing a product or service is its positioning’? Before answering refer back to Reading Comprehension in Unit 7 to refresh your memory as to Tom Peter’s view on branding.
What is the difference between USP and ESP? How can uniqueness be achieved? Be sure to provide your own examples. Initiative is highly encouraged.
►Think of actual businesses having USP or/and ESP. In what of the six ways described above have they achieved uniqueness? Use your initiative, browse the Internet and prepare a visual talk.
‘BUDDY’ POINT
►Make up buddies:
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1- 2- 3- 4- 5- 6- 7- 8- 9- 10- |
‘WWW’ POINT
►Choose an established company and a well-known product it produces, which, you think, has already entered at least the stage of maturity. Team up with your buddy/buddies (2-3 in a group) to make a logically structured PowerPoint presentation on:
Product Life Cycle
Company’s product portfolio and the Boston Matrix Structure
Be sure to analyze each stage of the PLC of the product you have chosen from its development till its present life stage. Also analyze the company’s product portfolio by implementing the BCG analysis.
‘PREPOSITION’ POINT
►Fill in the blanks with the correct prepositions:
Dwindled sales resulting ___ low profits required ___ a new strategy to be implemented.
TQM requires that errors in production process be reduced ___ an absolute minimum.
The sales of our last version of super mini laptops started ___ a low level and then within a month grew ___ a very high level.
___ pursuit ___ quick high profit, we initially sold U8708 model ___ a comparatively low price.
High productivity levels do not happen ___ chance or good fortune; they stem ___ total quality approach ___ a production process.
The latest modified version of T67 cell phone came ___ high pressure from competitors; most of our customers switch ___ rival products; this made us search ___ new markets and market segments to enter.
‘TRANSLATION-3’ POINT
►Translate into Russian (in typing). Highlight in your translation all the expressions given in bold in the original text below. Exchange your translation with that of your classmate and start translating. Give one copy to your teacher so that he/she can ‘run the business’. Highlighted expressions should appear in your oral translation unchanged.
(1) Organizations must develop new products and services. Their current products face limited life spans and must be replaced by newer products. But new products can fail - the risks of innovation are as great as the rewards. The key to successful innovation lies in a total-company effort, strong planning, a marketing focus and a new-product development process.
(2) The new-product development process consists of nine stages. The process starts with determining the new product strategy, which provides direction for the new-product development effort. Next, the company must find new-product ideas. Idea generation may draw inspiration from internal sources and from external sources, such as customers, competitors, distributors, suppliers and others. Next comes idea screening, which reduces the number of ideas based on the company’s defined criteria. Ideas that pass the screening stage continue through product concept development, in which a detailed version of the new product idea is stated in meaningful consumer terms. In the next stage, concept testing, new-product concepts are tested with a group of target consumers to determine if the concepts have strong consumer appeal. Strong concepts proceed to marketing strategy development, in which an initial marketing strategy for the new product is developed from the product concept. Then, a business analysis is undertaken, which reviews sales, costs and profit projections for the new product to determine whether it is likely to satisfy the company’s objectives. With positive results here, the concept moves into product development, which now calls for a large jump in investment. As the product becomes more concrete, it is subjected to functional and consumer tests. If it passes these tests, the product moves to test marketing, at which the product and marketing program are tested in a more realistic market setting. The company goes ahead with commercialization if test market results are positive. The purpose of each stage is to decide whether the idea should be further developed or dropped. The company wants to minimize the chances of poor ideas moving forward and good ideas being rejected.
(3) Each product has a life cycle marked by a changing set of problems and opportunities. The sales of the typical product follow an S-shaped curve made up of five stages. The cycle begins with the product development stage when the company finds and develops a new-product idea. The introduction stage is marked by slow growth and low profits as the product is being pushed into distribution.
(4) If successful, the product enters the growth stage marked by rapid sales growth and increasing profits. During this stage, the company tries to improve the product, enter new market segments and distribution channels, and reduce its prices slightly. Then comes the maturity stage, in which sales growth slows down and profits stabilize. The company seeks strategies to revitalize sales growth, including market, product and marketing mix modification. Finally, the product enters the decline stage, in which sales and profits dwindle. The company’s task during this stage is to identify the declining product and decide whether it should be maintained, harvested or dropped. If dropped, the product can be sold to another firm or liquidated for salvage value.
‘TRANSLATION-4’ POINT
►Translate into English:
(1) Идея о том, что любой продукт проходит так называемый жизненный цикл, который определяет текущий уровень продаж и, что более важно, выбор будущей стратегии, достаточно давно и широко известна. И хотя в последнее время концепция жизненного цикла продуктов была предметом дискуссий, она, если ее разумно применять, представляется весьма ценной для принятия стратегических решений.
(2) Согласно этой теории, продукт в своей экономической жизни проходит несколько этапов. Вначале экспериментальная партия разрабатывается и внедряется на рынок, где продукту необходимо получить признание. Для этого требуется некоторое время, и потому продажи растут медленно. Этап внедрения на рынок является периодом высокого риска, поскольку всегда вероятен провал нового продукта.
(3) Если продукт получает признание на рынке и его продажи достигают определенного критического уровня, наступает следующая фаза его жизненного цикла, в течение которой объем продаж растет обычно быстро. Спрос на любой продукт небезграничен, со временем темпы роста продаж замедляются, и устанавливается типичный для этого продукта уровень потребления. Во время фазы роста на рынок данного продукта часто проникают новые компании, которых привлекают быстрый подъем спроса и реальная возможность получить хорошую прибыль при не самом высоком риске.
(4) В конечном итоге спрос на продукт начнет сокращаться, потому что будут внедряться продукты-заменители или изменятся вкусы покупателей. Что касается некоторых товаров длительного пользования, то на их рынке может просто наступить насыщение, а потребность в замене окажется недостаточной, чтобы поддерживать спрос на прежнем уровне. Стадия упадка продукта заканчивается с его «смертью», хотя эта заключительная фаза жизненного цикла продукта и может длиться довольно долго.
‘CASE’ POINT
(1) Gear Motor Manufacturing (GMM) is the world’s largest car manufacturing plant which is located near Lunagorsk. In terms of the number of cars produced annually for every person employed, it has been the world’s most productive car plant for the past seven years. This achievement is not accidental. It was designed and planned for from the outset. GMM handles all aspects of the manufacturing/assembly of the Stallion, Mighty, Mignon ranges. By the end of 2006, GMM produced 342,145 vehicles; over 85% of this output was exported to 55 markets worldwide.
(2) One key decision with a car plant is where to locate it. For its Russian factory, GMM chose in 2004 a 300 hectare former airfield near Lunagorsk. Lunagorsk’s attractions included:
a) Skilled labour force
Manufacturing has a long tradition in the area. A decline in other local manufacturing meant that skilled labour was readily available.
b) Communications
Lunagorsk has good road and rail links to all major Russian areas. This makes it relatively easy to bring in supplies from 105 separate Russian component and sub-assembly suppliers, and also to distribute completed vehicles. A nearby deep water port gives ready access to export markets and for the import of vehicles to Russia.
c) Government support
The government provided financial and other incentives to manufacturers who set up in an area where employment opportunities had reduced sharply and new jobs were needed. Since 2004, GMM has increased the scale of its Lunagorsk operation; almost 1 million cars have already been made.
(3) Car assembly is a complex operation with many components requiring skilled assembly. That’s a crude indication of what is involved. Management is particularly keen to monitor total machine-hours and total labor-hours that each vehicle requires. So far, GMM has invested over £2.1 billion in the Lunagorsk site, taking its production capacity to 500,000 vehicles per year. Production methods must be able to produce what customers want, in the quantities customers require, at a price consumers are willing to pay, and at a cost that yields a profit to the business. That means that being efficient is vital to success.
(4) In some industries it is possible to carry out individual job production to meet a particular customer’s request, e.g. a wedding dress, a birthday cake, a fitted kitchen. However, very nearly all of the world’s car manufacturers mass produce standard models, with individual consumer choice being accommodated by offering various colors, interior designs, and optional extras within a limited flexible production process. People can still personalize their cars further e.g. by choosing a particular car registration or accessories.
(5) In pursuit of high output at low average cost, car manufacturing typically uses a continuous flow production method, where sub-assemblies are brought together in a final assembly area. This is the most cost effective and efficient method of production and the speed of the final assembly line can be adjusted to match consumer demand. If demand picks up, the production line can be accelerated, within predefined limits.
(6) At Lunagorsk site, the production flow draws on three main production shops, as well as support areas. The three main shops are:
body assembly
painting
final assembly.
Supporting manufacturing areas are:
press shop – produces panels for the vehicles
plastics shop – makes bumpers (fenders) on site
castings shop – makes engine parts, e.g. cylinder heads
engine shop – assembles engines, installs oil, coolant fuel
axle plant – produces axles that are joined to engines in final assembly.
Widely different processes generate different jobs across three main broad areas.
(7) The machinery is scheduled to work at a given level although when demand requires it; there is flexibility in regard to both the machinery and the workforce of 4,300. At the moment, with a two-shift pattern, GMM has a total production capacity of around 360,000 units/year – a third shift can be introduced which would take production up to 500,000 units/year if and when required.
(8) GMM’s Lunagorsk plant is technically highly advanced. It uses sophisticated robotics and computer integrated manufacturing techniques to create a carefully monitored production process that reduces errors to an absolute minimum. Automated machines can only do so much; however, the human element remains vital. Organizing an effective flow of production at GMM has involved developing a way of doing things and an attitude towards work based on giving responsibility to employees at every step. This approach raises employees’ morale, and reduces absenteeism, which could severely impact on continuous flow production.
(9) GMM expects and requires its employees to become multi-skilled decision makers. Most employees also want that for themselves. Reaching that goal involves:
training employees to develop their skills
encouraging them to make decisions
organizing employees into participative teams
developing open-channel, multi-directional communication systems
placing quality at the heart of flow production
flexible working practices
(10) The open communication policy includes daily face-to-face meetings between management and employees, a company council, employee surveys, and employees having ready access to the company’s intranet system. The emphasis placed on ‘going for quality’ means that each employee is responsible both for their own work and the standards of their coworkers. By ensuring management recognizes that individuals have this control results in everyone taking the culture on board. ‘Going for quality’ emphasizes ‘building good quality in’ rather than ‘inspecting poor quality out’. Each employee controls quality by checking that the previous job has been done properly.
(11) Total Quality Management (TQM) is a key feature of GMM’s way of working. TQM involves making customer satisfaction top priority. Given this goal, everything the organization and its people do is focused on creating high quality. To achieve this, GMM has to:
understand customer requirements
consider the processes involved in providing quality, not just the end result
prioritize and standardize tasks to deliver quality
educate all employees to work in this way.
In practical terms TQM involves:
identifying customers and their requirements
establishing and using objectives (targets) for all areas of activity
basing decisions on researched hard facts rather than on hunches
identifying and eliminating the root causes of problems
educating and training employees.
(12) TQM is an ongoing process; a way of thinking and doing that requires an ‘improvement culture’ in which everyone looks for ways of doing better. Building this culture involves making everyone feel their contributions are valued and helping them to develop their capabilities. A cycle of Plan, Do, Check, Action becomes part of every employee’s thinking, because it represents GMM’s way of working.
(13) With a just-in-time approach, specific vehicles and their components are produced just-in-time to meet the demand for them. Sub-assemblies move into the final assembly plant just as final assemblers are ready to work on them, components arrive just in time to be installed, and so on. In this way, the amount of cash tied up in stocks and in work-in-progress is kept to a minimum, as is the amount of space devoted to costly warehousing rather than to revenue-generating production. GMM’s just-in-time process depends not on human frailty but on machine precision.
(14) Every vehicle is monitored automatically throughout each stage of production. A transponder attached to the chassis leg contains all of a vehicle’s production data, e.g. its required color, specification and trim. This triggers sensors at various points along the production line, thus, updating the records. When, for example, the transponder sends a message to the production system at a supplying company to produce a seat in a particular color and trim, this triggers the relevant response and a seat to the required specification is produced. Further along the production line the specifically produced seat arrives to meet the vehicle to which it belongs - just in time.
(15) It is vital to train people to work in such a hi-tech industry with such sophisticated quality systems. GMM’s training department conducts a training needs analysis to assess individual employees’ needs and to organize training programs. The department concentrates on five main areas:
technical development – e.g. teaching skills relating to robotics and electrics, plus the required knowledge, e.g. wiring rules/regulations.
people development – identifying employee needs and ambitions; providing courses to help personal development, e.g. in team building and communication skills.
understanding processes – workshops covering safety, production operations etc.
computer skills and graduate training - from basic to highly technical
trainee development – courses for graduate trainees ranging from accountancy to team building.
(16) GMM is famously associated with ‘Kaizen’ or continuous quality improvement. GMM states: ‘We will not be restricted by the existing way of doing things. We will continuously seek improvements in all our actions.’ Kaizen can be applied everywhere, any time, any place. It can involve the smallest change in everyday working practice as well as a major change in production technology. Typically these improvements are initiated by teams of employees sitting down together and sharing ideas for improvements. Small steady changes are maintained to make sure that they actually work. No improvement is too small. Everyone at GMM is responsible for thinking about the current way of doing a job and finding a better way of doing things.
(17) Kaizen improvements can save money, time, materials, labor effort, as well as improving quality, safety, job satisfaction, and productivity. Kaizen permeates the GMM suggestion scheme, which offers not financial or individual rewards but items that benefits the whole team e.g. a microwave for the staff kitchen, a pool table for the canteen.
Conclusion
Productivity levels at GMM’s plant in Lunagorsk, and the quality of final production there, have not happened by chance or good fortune. They stem from an all-embracing approach to a production process, designed to bring out the best in both people and machines. It continues to be conspicuously successful.
►Case questions:
What were the key reasons for locating in Lunagorsk?
What type of production method is used at GMM’s Lunagorsk plant? Such production methods can lead to boredom and monotony in the workforce - how does GMM attempt to avoid this problem?
What are the key requirements of the Total Quality Management (TQM) system in place at GMM?
GMM uses a Just-In-Time (JIT) stock control system. What are the advantages and disadvantages of such a system to a company like GMM? With regard to the JIT system, how far did the location decisions help GMM to be able to adopt such a system?
Why is investment in staff development so important to productivity levels at GMM?
What are the main principles of Kaizen?
What key elements have contributed to GMM’s success? (This question covers the whole case)
►Case task:
While GMM is a very successful and productive plant, it does face a number of challenges now and in the nearest future. Read the information below and prepare a 300-350-word report outlining your views on the key strategies that GMM could implement to meet the challenges.
‘European car makers Volkswagen, Peugeot Citroen and Fiat are defying gloomy forecasts, coming up with better than expected results thanks to cost cuts. And despite the economic slowdown and slumping sales all three maintained their targets for this year which caused their shares to rise.
Sales in Europe were down 7.9% in June, but sales have soared in emerging markets such as Brazil, Russia, India and China. The car makers have seen better sales of smaller vehicles in response to record fuel costs.
VW’s second-quarter operating profit rose 22% to 2.1 billion euros. PSA Peugeot Citroen reported a 32% surge in net profit for the first half of the year and Fiat posted a 19.6% rise in quarterly profit to 1.1 billion euros.
Truck sales are also proving resilient. Volvo announced a bigger-than-expected second-quarter rise in pre-tax profit. It also left unchanged its forecast of 10% growth in the European truck market this year.
Meanwhile, looking to the future, major manufacturers such as GM, Toyota and Ford have been showing off vehicles powered not by petrol or diesel but by electricity at an event called the Plug-In Convention in California. The vehicles being displayed should be on the roads in about two years time.’
‘SHOW’ POINT
►Team up with your buddy to make a logically structured PowerPoint presentation on Manufacturing Processes keeping to the following steps:
Lean Production
The main features of lean production
JIT
JIT: a philosophy and an integrated system for production management
Kaizen
The meaning of Kaizen
The use of real examples is mandatory and highly praised. Surf the Internet for additional information.
‘CHECK’ POINT
►Question/Answer session:
Do you think that the product life cycle concept is a useful marketing-planning tool? Why or why not?
What marketing strategies are appropriate at the introduction stage of the product life cycle?
What marketing strategies are appropriate at the growth stage of the product life cycle?
What marketing strategies are appropriate at the maturity stage of the product life cycle?
What marketing strategies are appropriate at the decline stage of the product life cycle?
How can planned obsolescence be justified?
What are the points in favor of USP and ESP?
What are the differences between market-skimming and market penetration strategies?