II. Answer the questions on the text

1. Who started a consulting business by the name of Keynote Marketing?

2. What kind of goods did he create?

3. Where was his business developed?

4. How did American generic products look like in 1980s?

5. Why were generics popular in the USA in 1980s?

Communication

Discuss the questions in pairs or groups using the conversational formulas

1. What are they ways of increasing brand recognition?

2. Is it worth paying a bit more for a branded product?

3. Are branded products better than generics or own brands?

Writing

Write the annotation to the text.

Project work

Surf the Internet. Make up presentations about the world famous brand products. Choose the best presentation.

Unit II. Product classification

1. Starting point

• What do you know about product classification?

• What categories of goods exist?

• Could you define the term “impulse sales”?

• What are the ways of promoting impulse sales?

Working with words

I. Study the table and think of the Russian equivalents

1.Consumer	a person who buys goods or uses services;
2. Price	an amount of money for which something may be bought or sold;
3.Terms	conditions relating to buying, selling or paying for something.
4.Image	a general impression that a product gives to the public;
5.Supermarket	a large shop selling food, drink, household goods; people choose what they want from the shelves and pay for it as they leave.

II. Make up sentences using the words from the table above

Reading

I. Before reading the text fill in the first two columns of the kwl Chart.

II. Read the text using the dictionary. Pay attention to the words in bold. After reading the text fill in the third column of the kwl Chart. Kwl Chart

Know	Want	Learnt

Product classification

A s a product has intangible as well as tangible attributes it is appropriate to consider products in identifiable groups. The first difference made is between consumer goods and industrial goods. Industrial goods are those bought by manufacturers who use them to make a product that is in turn sold to make other products. Consumer goods are finished products that are sold to the ultimate user and these are sub-categorised: convenience goods, shopping goods, specialty goods, unsought goods.

Convenience goods are relatively inexpensive items and the purchase of them requires little effort on the part of the consumer. The regular shopping list consists mainly of convenience goods. The decision process is clouded by the existence of brands that require the consumer to make comparisons and choices. A major task of competitive advertising is to attempt to predetermine the purchase decision for convenience goods, so the consumer buys, or subconsciously notes, a certain brand rather first thinking of the generic product and then making a brand-choice decision. Convenience goods can be further divided into staple items and impulse items. Staple convenience goods are items which are consumed almost every day (milk, bread, potatoes).

Product differentiation for staple items tends to be insignificant. If a sudden need arises for a product that might have been overlooked during a major shopping trip, then even less thought is put into the purchase decision. Small grocery stores owe much of their trade to the purchase of such overlooked items. As the name implies, there is no pre-planning with purchase of impulse convenience goods. The decision to make an impulse purchase is made ‘on the spot’. Supermarkets display the provision in ‘dump bins’ which are often designed to promote impulse sales.

T he classification of shopping goods includes major durable or semi-durable items. Because shopping goods are generally more expensive than convenience goods and purchase is less frequent, purchase is characterized by pre-planning, information search and price comparisons. The infrequency of such purchases usually means the consumer is not aware of product availability prior to purchase planning.

The purchase of a furniture item, for example, will involve extensive consideration of the relative merits of the products on offer. In addition to product features the consumer will consider price, place of purchase, purchase terms, delivery arrangements, after-sales service and guarantees. Shopping goods can be further classified into homogeneous items and heterogeneous items. Furniture, ‘do-it-yourself’ equipment and l awnmowers are homogeneous in nature because although they are important to the consumer, they are not really exclusive. They are goods that are basic necessities and are not too differentiated from each other in terms of price, prestige or image. Heterogeneous shopping goods are stylized and non-standard. Here, price is of less importance to the consumer than image. Behavioural factors play an important role in the purchase decision process.

The purchase of specialty goods is characterized by wide search and unwillingness to accept substitutes once the purchase choice has been made. The market for such goods is small, but prices and profits can be high. Consumers of specialty goods pay for prestige as well as the product itself.

Unsought goods often satisfy a genuine need that the consumer did not actively consider, for example, a life-insurance policy, or the need for a funeral arrangement. The consumer is often at a disadvantage when confronted with unsought goods because there might have been no opportunity for evaluation and comparison, so such goods are usually marketed sensitively. The consumer may be suspicious of any ‘special offer’, which is often the trademark of less scrupulous companies whose methods of marketing include direct mail, telephone canvassing and door-to-door calling.