Ministry of Education and Science of Ukraine

Kyiv National Linguistic University

Test

For the fifth-year students

Semester IX

Speciality “Management of organizations”

Extramural Department

The English Language Department

The Faculty of Economics

Author: O. O. Litvinov

Kyiv 2014

Task I. Read the extract about vertical marketing systems. As you read it, complete the tree diagram in Chart 6.1.

In recent years, one of the biggest channel development has been the vertical marketing systems (VMS) that have emerged to challenge conventional marketing channels. Generally they provide stronger leadership and improved performance.

In contrast to the conventional distribution channel, VMS consists of producers, and wholesalers acting as a unified system. Any of these three channel members can own, have contracts with or have influence over the other two members. VMS achieve economies through size, bargaining power and elimination of duplicated services. We will now look at the three major types of VMS shown in Chart 6.1.

			Vertical marketing systems (VMS)
	a. _________		b. _________			c._________
	d._________ _________ _________		Retailer co-operatives			e. _________ _________
			Manufacturer-sponsored retailer franchise system			f._________ _________ _________ _________			g._________ _________ _________ _________

Each type uses a different means for setting up leadership and power in the channel.

In a corporate VMS the many stages of production and distribution are combined under single ownership. For example, Gallo, the world's largest wine maker, does much more than simply turn grapes into wine. The Gallo brothers own the trucking company which transports all the wine out of Modesto and many of the raw materials back in. Gallo makes the bottles and the aluminium screw tops. It participates in every aspect of selling and owns its distributors in about twelve markets and would probably buy many more if the laws in a lot of states did not prohibit it from doing so.

A contractual VMS consists of independent firms at different levels of production and distribution who join together through contracts to obtain more economies or sales than they could achieve alone. There are three types of contractual VMS: wholesaler-sponsored voluntary chains, retailer co-operatives and franchise organisations.

Wholesaler-sponsored voluntary chains are systems in which wholesalers organise voluntary chains of independent retailers to help them compete with large chain organisations. This is quite common amongst independent grocers.

Retailer cooperatives are systems in which retailers organise a new, jointly-owned business to carry out wholesaling and possibly even production.

In franchise organisations, a channel member called a franchiser might link sev­eral stages in the production-distribution process. There are three forms of franchises. The manufacturer-sponsored retailer franchise system is common in the automobile industry. The manufacturer licenses independent dealers to sell its cars. The manufacturer-sponsored wholesale franchise is found in the soft-drink industry. Coca-Cola, for example, licenses bottlers (wholesalers) in some markets. They buy the manufacturer's syrup concentrate and then carbonate, bottle and sell it to retailers in local markets. The third franchise form is the service-firm-sponsored retailer franchise system. Here a service firm organises a whole system for bringing its service to consumers. There are many examples including car rental (Hertz, Avis), fast-food (McDonalds, Burger King) and the motel business (Holiday Inn, Ramada Inn).

Finally, an administered VMS coordinates the many stages of production and distribution not through common ownership or contractual tics but through the size and power of one of the parties. Manufacturers of top brands can obtain strong trade co-operation. Thus Procter & Gamble or Campbell Soups can command a lot of cooperation from resellers regarding shelf-space, displays, promotions and price policies.

Comprehension/ interpretation

What are the advantages of VMS over conventional distribution channels?

What are the advantages of:

1. Wholesale sponsored chains?

2. Retail co-operatives?

3. Franchise organisations?

Which party in an administered VMS is most likely to be the leader?

Task II. Find 9 common words connected with marketing in the word square. You can read the words vertically (3 words), horizontally (5 words) or diagonally (1 word). (See example):

R	Q	A	I	J	K	L	M	(P	L	A	N)
C	U	S	T	O	M	E	R	N	P	O	Q
S	A	A	M	A	R	K	E	T	I	N	G
H	L	В	L	F	G	H	J	T	S	T	O
O	I	F	E	F	W	R	U	U	C	V	O
J	T	G	A	G	Y	В	В	C	E	A	D
L	Y	H	T	H	I	R	U	B	D	U	S
N	O	R	P	R	O	D	U	C	T	Q	P
O	S	I	T	T	R	V	G	H	J	W	R
O	M	S	E	R	V	I	C	E	S	X	E
D	I	K	I	R	E	S	E	A	R	C	H
D	X	X	A	P	Q	U	A	N	A	F	H

Task III. Choose the necessary word and put it in the sentences

1. Federal government and all national banks.

2. International cooperation between banks makes it possible imports and

export.

3. It is possible to convert American dollars to Swiss franks in department.

4. The of Germany in the euro.

5. All the banks make loans to borrowers.

6. If the importer buys from another country he will pay for it in the currency

of this country.

a) merchandise, b) currency, c) commercial, d) foreign exchange, e) to finance, f) to supervise,

g) to charter

Task IV. Use the proper tenses

1. We already (buy) 3000 computers when the government (impose) an import quota on them.

2. We (not, raise) enough money yet when the government (introduce) new taxes on revenues.

3. He (write) a letter when I (see) him.

4. We (expert) MR. Baker yesterday but he (not come).

5. I (to have breakfast) when the porter (enter) the room.

6. I wish our company (export) this machine to France.

7. They said they (work) from 8 a.m. to 5 p.m.

8. He didn't know that the boss (sign) the contract.

9. We (sign) a contract in Argentina last week but we (not to speak) with the boss about it yet.

10.The commercial bank already (stop) to exist when the war (start).

Task V. Explain the terms

4. demand deposit

5. time deposit

6. checking account

7. savings account

8. exchange rate

9. liquidity

10. NOW- account

11. Overdraft

12. VAT

Task VI. Answer the questions

1. What are services offered by a commercial bank?

2. What is the mission of Federal Reserve Bank?

3. What are the reasons for foreign trade?

4. What similarities and differences exist between banking in the early 1930s and banking in the early 1990s?

5. Compare the different types of financial institutions.

Task VII. Your employer has informed you that you have been promoted and will be assigned to the head office in London at the end of the month. You have found a flat but will need to pay a three month deposit of$ 2 000. In addition to this, you will have to pay for the move and other expenses. Your new job will mean a salary rise of about 25%.

Write a letter to your bank manager explaining your situation and requesting authorisation

for an overdraft. The current balance of your account is in credit. You should also request

information about the procedure involved in transferring your account to a branch in Garden

in London.

Address:

The Manager Greenwich Bank

45 High Street

DoncasterD046GJ

The letter should be written in Block Style and contain approximately 70-80 words.

Task VIII. Match the terms in A with their definitions in B. A.

B.

A. pay off

market testing

saturation point

survey research

supplementary costs of distribution

prime costs of distribution

industrial marketing

production orientation

market targeting

market segmentation

psychographic segmentation

benefit segmentation

situation segmentation

volume segmentation

focus group studies

primary data

secondary data

panel

consumerism

speculating

B. 1. divides market by volume, attitudes, and interest;

2. the process by which an organization decides which market to serve;

3. partial collection of facts, figures, or opinions and analysis of the data;

4. the final choice, solution or result;

5. a research technique in which the product is sold at selected locations while the reception of it by consumer is still observed;

6. buying and selling with the expectation of profiting from anticipated price charges;

7. a social movement which seeks to protect the rights and powers of consumers by promoting honest advertising and improved safety standards;

8. costs or expenses that arise because of the process of buying and selling or conversion of the form of the product;

9. costs or expenses which add to the value of a product as being the continuation of the production process;

10. a statistically selected sampling of people representing a specific population who agree to provide information and answer questionnaires;

11. the amount beyond which no more can be absorbed;

12. focusing on producing goods rather than marketing them;

13. unstructured interviews with 6 to 15 people who represent a target market to obtain their beliefs and feelings about company and products;

14. process of dividing the total market into several sub-markets that have similar characteristics;

15. separates out those situations in which the product may be used;

16. results of one's own research;

17. the market is divided into user categories: heave, medium, light, non users;

18. already published research data from journals, trade associations, informational services, libraries etc;

19. marketing of goods and services to manufacturers, institutions, commercials, the government;

20. the market is divided by benefits desired.