V. Find out to what stages of the product life style these statements refer:

1. «Sales increase rapidly as the product becomes well known. Profits reach the peak and begin to decline during this period.»

2. «Sales are still increasing during this stage but the rate of increase has slowed. Later in this stage the sales curve peaks and begins to decline. Profits decline during this stage.»

3. «Customer awareness and acceptance of the product are low. Sales rise gradually, initially high costs result in low profit, or even in a loss. Purchasers are primarily the people who want to be «the first».

4. During this stage «sales volume decreases sharply. Profits continue to fall. The company may eliminate less profitable versions of the product from the product line and may decide to drop the product entirely».

V. Questions and assignments:

1. What is a product life cycle?

2. Name the four stages of life cycle.

3. Are there many competitors in the introduction stage of a product?

4. Who are the purchasers at this stage?

5. What is the marketing challenge at this stage?

6. What can you say about sales in the growth stage?

7. What is the management's goal at this stage?

8. Is it necessary to built brand loyalty during this stage?

9. What can you say about the sales at the beginning of the maturity stage?

10. What happens (происходит) with the sales curve later in this stage?

11. How many the market share be strengthened during a product's maturity stage?

12. Explain (объясните) how pricing strategies change during this stage.

13. What can you say about the sales volume during the decline stage?

14. Outline (кратко изложите) the factors which cause the decline of a product.

15. May the company eliminate less profitable from the product line or decide to drop the product entirely?

VI. Agree or disagree with the statements. Use the following phrases:

That's wrong. Это неверно.

That's (quite) right. (Совершенно) верно.

That'a not quite true Это не совсем соответству-

to the fact. ет факту.

According to the text ... Согласно тексту...

1. In the growth stage, sales rise gradually as the product becomes well known.

2. At the beginning of maturity stage sales are still increasing, but the rate of increase has slowed.

3. In the introduction stage, customer awareness and acceptance of the product are high. Sales rise gradual.

4. During the decline stage, sales volume decreases sharply, profits continue to fall.

VII. Make up a written abstract of the above text.

VIII. Retell the prepared abstract on «The Product Life Cycle».

UNIT 4

DISTRIBUTION CHANNELS

(for consumer products)

1. Producer------------------------------------Consumer

2. Producer------------------------Retailer--Consumer

3. Producer-----------Wholesaler--Retailer--Consumer

4. Producer--Agent--Wholesaler--Retailer--Consumer

(For Industrial Products)

1. Producer-----------------------------Industrial user

2. Producer-------Agent middleman-----Industrial user

I. CHANNELS FOR CONSUMER PRODUCTS

1. PRODUCER TO CONSUMER

This channel, which is often called the direct channel, includes no marketing intermediaries. Practically all services, but very few consumer goods, are distributed through the direct channel.

Producers sell directly to consumers for several reasons. They can better control the quality and price of their products. They don’t have to pay for the services of intermediaries. And they can maintain closer ties with consumers.

2. PRODUCER — RETAILER — CONSUMER CHANNEL

A retailer is a middleman that buys from producers or other middlemen and sells to consumers. Producers

sell directly to retailers can buy in large quantities. This channel is most often used for products that are bulky, such as furniture and automobiles, for which additional handling would increase selling costs. It is also the usual channel for perishable products, such as fruits and vegetables, and for high-fashion products that must reach the consumer in the shortest possible time.

3. PRODUCER — WHOLESALER — RETAILER — CONSUMER CHANNEL

This channel is known as the traditional channel, because most consumer goods (especially convenience goods) pass through wholesalers to retailers. A wholesaler is a middleman that sells products to other firms. These firms may be retailers, industrial users, or other wholesalers. A producer uses wholesalers when its products are carried by so many retailers that the producer cannot deal with all of them.

4. PRODUCER — AGENT — WHOLESALER — RETAILER — CONSUMER

Producers may use agents to reach wholesalers. Agents are functional middlemen that are compensated by commissions paid by producers. This channel is used for products that are sold through thousands of outlets to millions of consumers. Often, these products are inexpensive, frequently purchased items. For example, millions of consumers buy candies, which are sold through numerous outlets. Some candies are sold through agents to wholesalers who, in turn, supply them to retail stores and vending machines. This channel is also used for, highly seasonal products (such as Christmas tree decorations) and by producers that do not have their own sales forces.