Vocabulary Focus

4. Fill in the table with the missing derivatives from the text.

Noun	Verb	Adjective
consumer
		durable
	purchase
	shop
specialization
		different

4. Paraphrase the following expressions in italics using the phrases from the text.

1. Specialty goods differ from shopping goods primarily because price is not the main point.

2. Producers of specialty goods prefer to place their goods only in particular stores.

3. Convenience goods are items that buyers want to buy with a feeble attempt.

4. Within stores, convenience goods are placed at checkout stands and other places of full view.

5. The main principles for marketing shopping goods include the heavy use of advertising in local media, including newspapers, radio and TV.

4. Match the words and phrases in the left column with their synonyms in the right one.

durability	a. well-considered
wear	b. favour
staple	c. rag
impulsive	d. basic
tabloid newspaper	e. conformity
deliberate	f. differentiation
preference	g. therefore
consistency	h. damage
distinction	i. longevity
consequently	j. spontaneous

A springboard for discussion

a. Think over your own classification of consumer goods. Is it possible to create exact classification with clear distinctions? Give some examples.

b. Think over the most effective ways of product advertising.

4. Pricing And Sales

Starting up

Discuss the following questions:

1. Do you know how the prices are formed?

2. What factors influence the prices? In what way?

3. Who, do you think, is in charge of quoting the price?

Reading

1. Go through the following vocabulary notes to avoid difficulties in understanding

quote a price(v.) – set a price	invoice (n.) - proof of purchase
overall cost (n.) - total cost	statement (n.) - financial report
profit margin (n.) - the size of profit	shipping (n.) - delivery
costing sheet (n.) – calculation (expenses list)	overall costs (n.) - total cost
unit cost (n.) - the actual cost of producing one article

2. Read and decide whether these statements are true (T) or false (F).

1. When the price is quoted, only profit margin is taken into consideration.

2. After the model has been produced or exported, the company starts to calculate their overall costs.

3. An average profit margin for the companies, which they build in the price, accounts for 10%.

4. There are many factors, which influence the price quotation, but the main role is taken by the law of supply and demand.

5. The Sales Department deals with all the forms involved in selling goods.

6. The invoice is the bill for the goods, which have been delivered to the Buyer and have to be paid by him, and is sent by the Sales Department.

7. One can find all the information about the transactions in the statement.

8. The order is a request for the goods and is sent to the Sales Department by the Buyer.

9. Making goods in large quantities requires more expenditure and as a result the company quotes a higher unit price.

10. According to the law of supply and demand, if the demand is high and the competition on the market is low, the company can charge a higher unit price.

3. Now read the text and check your answers to the statements from ex. II.

Before a company can quote a price (or give a quotation) for goods, they must take into consideration all their costs: the production costs, shipping, insurance, etc. The total of all these costs is called the overall cost. The costing is usually done before a model is produced or exported, so the company must calculate (or work out) their overall costs in advance. From these figures they can work out the cost of each model (the unit cost). All the calculations are written on the costing sheet. The company also takes into consideration their profit. They will usually allow a profit margin of at least 10%. So when a company gives a quotation for a model, they have built into the price their overall costs and profit margin.

There are other factors which affect the price of goods, for example, the law of supply and demand. If a product is in demand (many people want to buy it) and not many firms can supply the product, then the company can charge a higher unit price. On the other hand, making goods in large quantities is comparatively cheaper than producing goods in small quantities. If there is a big demand for a model, a company can produce it in large quantities they should bе able to quote a lower unit price.

Two of the departments in a company which deal with pricing and selling goods are the Sales Department and the Accounts Department. The Sales staff handle the basic forms involved in selling goods (the order and the delivery or advice note) and the Accounts staff handle the forms involved in charging for goods (the invoice and the statement). The form sent by the buyer requesting goods is the order. The form which accompanies the goods or which is sent to the buyer to tell him to expect the goods is the delivery note (or advice note). The buyer signs the delivery note which is then a receipt for the seller to prove the buyer received the good. The Sales Department then gives the signed delivery note to the Accounts Department which sends the buyer a bill for the goods. The bill is called an invoice. Usually the Accounts Department will send the buyer and account each month which shows details of all the transactions that month. The account is called a statement. The transactions are all the invoices the seller has sent and the money received.

Text Comprehension

4. Answer these questions using the active vocabulary of the text.

1. What must a company take into consideration before it can quote a price for goods?

2. What is the overall cost?

3. Why must the overall costs be calculated in advance?

4. Where are all the calculations written?

5. What other factors affect the price of goods?

6. What is the essence of the law of supply and demand?

7. What departments deal with pricing and selling goods in a company?

8. What does the term "transactions" mean?

5. Find the definitions of these words and phrases in the text.

a) the difference between the price and the production costs

b) the document, which accompanies the goods and is sent to the Buyer to prove the goods have been sent

c) the bill for the goods, which has to be paid by the Buyer

d) the document, which shows the calculations when price is quoted

e) the complex of all the costs, which occur during the production process and the process of delivering goods to the customer

f) all the invoices the Seller has sent and the money received