Unit 1 new markets are vital
In this episode, the Managing Director, Hector Grant, has to make a decision about allowing his young Sales Manager, John Martin, to go on an expensive fact-finding tour of a country in Africa called Abraca.
First we hear John Martin discussing with Peter Wiles, the Production Manager, an article he has just read in The Times newspaper about the recent discovery of oil in Abraca. He thinks that the firm should find out whether it would be possible to export to Abraca, and in particular to the capital city, Djemsa, where a lot of new government offices are shortly to be built. He wants to go there at once and try to open up a new market. Hector Grant (or H.G. as his staff generally call him, using his initials) remembers a disastrous attempt a few months ago to export to a country in South America when the firm lost a lot of money. He is inclined to be cautious, a bit worried about the difficulties involved, and the expense. So we discover some of the points which have to be considered by a firm wishing to export.
(In Peter Wiles's office.)
JOHN MARTIN: Hello, Peter! Have you seen the article in The Times this morning about Abraca? It says here that income per capita is rising fast.
PETER WILES: I can't keep up with all these newly independent countries. Is Abraca the country that's just found a lot of oil?
JOHN: That's the one. Apparently they're going to build a lot of new offices in the capital, Djemsa, and I think it might be a good market for our furniture and office equipment.
PETER: Ah, the export market. Well, you know what H.G.'s views are on that!
JOHN: But we must export more, Peter. You really must try and help me to convince Mr. Grant that we're crazy not to look for more foreign business. Will you back me up?
PETER: Yes, of course I will; but you know what the boss thinks about exports. He thinks it's all a big waste of time and money for very little profit. Anyway, I'll do what I can.
(In Hector Grant’s office.)
SECRETARY (Elizabeth Corby): Mr. Martin to see you, Mr. Grant.
HECTOR GRANT: Oh yes, ask him to come in, please, Elizabeth.
JOHN: Good morning, H.G.
GRANT: Ah, John, I've been thinking about this scheme of yours to sell our products to Abraca.
JOHN: Oh, I'm glad.
GRANT: Yes, it's all very well to say we should export more, but is the expense worth it? Look what happened over our attempt to break into that South American market.
JOHN: That was because we had that labour trouble at the time and we weren't able to meet our delivery dates. But we can't let that one failure stop us from trying to break into a new market.
GRANT: You say Abracan imports are going to rise rapidly. Well, let's have some figures. What are the difficulties? Who are our likely competitors? What about tariffs?
JOHN: There are tariffs on certain products, but the Board of Trade assure me that our office equipment would not be liable for duty.
GRANT: What about shipping facilities? It seems there are few direct sailings, and a lot of goods have to be transshipped via Rotterdam. And then there's all this red tape involved in getting an import licence.
JOHN: Well, if I find an agent in Abraca to act for us we can get him to sort out the import licence.
GRANT: Have you considered what channels of distribution are needed within the country?
JOHN: I'll have to find out, but we might be able to sell direct to government departments and oil companies. Maybe we should have a field survey to find out exactly how the firms in Abraca prefer to buy their products.
GRANT: Field surveys are too expensive.
JOHN: Oh, I don't agree, Mr. Grant. As you see from my preliminary desk research, Abraca is a young, rich, expanding country. I'm convinced that we can work up a big demand for our goods there.
GRANT: I'm sorry, John. On balance, I don't think it's quite the right time for this probe. I don't want the expense of sending you out there. You've got plenty to do in the home market.
JOHN: But surely we ought to go ahead now. Why wait and let somebody else get there first? We can't live on our old markets for ever!
GRANT: Let's say we have a different way of looking at things.
JOHN: I'm sorry, Mr. Grant, but I do feel strongly about this. If this is really your policy, then I must think about leaving the firm.
GRANT: You're being very foolish, John.
JOHN: Perhaps I am. But as our opinions differ so much about the future of the firm, perhaps I'd better go somewhere a little more forward-looking. I'm sorry, H.G.
(In John Martin's office.)
PETER: Good morning, John. Where were you yesterday afternoon? I tried to contact you ail over the place.
JOHN: I went out for a long drive to cool my temper a bit.
PETER: Oh? What happened?
JOHN: You know H.G. decided not to let me go to Abraca,
PETER: Oh no! I thought he'd be bound to agree. I'd have said that particular market was wide open.
JOHN: That's what I think. Anyway, I just suddenly got fed up with H.G.'s old-fashioned outlook and I resigned.
PETER: Did he accept your resignation?
JOHN: I didn't give him much chance. I was so angry I just walked out of his office.
SECRETARY: Excuse me, Mr. Martin, this letter has just come for you from Mr. Grant's office.
PETER: What is it, John?
JOHN: Good Lord! It's a reservation for a first-class return flight to Abraca!
TERMS IN THE INTRODUCTION
|
1. Managing Director |
the executive director in charge of the day-to-day running of a company |
|
2. Sales Manager |
executive in charge of promoting sales of the firm's goods (see unit 15) |
|
3. Production Manager |
executive in charge of production of goods in the factory |
|
4. open up a new market |
market: an area where goods can be sold. |
|
|
open up a new market: develop a new market, start one up |
TERMS IN THE EPISOD
|
1. income per capita |
average income, money earned, per head of the population. |
|
2. delivery dates |
dates on which a firm promises to deliver goods. If the goods do not arrive on time the firm has failed to meet the delivery dates. |
|
3. tariff |
an import tax charged or levied by the importing country. |
|
4. Board of Trade |
a British government department which deals with trade and commerce. |
|
5. duty |
a government tax levied, put, on goods entering a country (see tariff). |
|
6. trans-shipped |
goods moved, transferred, from one ship to another because there is no direct sailing from the home port to the port of destination.
|
|
7. red tape |
unnecessary formalities. So called from the tape used by lawyers to tie up legal documents.
|
|
8. import licence |
permission given by a government to bring goods into a country.
|
|
9. agent |
one who acts for a person or business. In this case it means a resident in a foreign country who acts for, or represents, several companies abroad. He works for a commission that is a payment of a percentage on the value of goods coming into a country.
|
|
different ways of getting the goods to the buyers. This may be direct to government departments, to retailers or through wholesalers.
|
|
11. field survey |
(market research) an investigation during which information is collected in the field by means of interviews. A report is then prepared on possible demand; type of consumer, buyer; methods of selling; number of rivals; what sort of packaging is preferred, etc., In any country or area where a company wishes to begin trading. A desk survey would be done in the office by using all statistical information available.
|
|
12. probe |
here means a preliminary survey of a possible new market. |
VOCABULARY EXERCISES
I. Give the English equivalents to the following words and expressions:
ежедневное руководство компанией; быть ответственным за...; импортирующая страна; успокоиться; быть вынужденным; старомодные взгляды; нести потери; доход на душу населения; угнаться за...; мебель и офисное оборудование; внешний рынок; убедить кого-л. в чём-л.; выполнить условия по срокам поставки; вероятные конкуренты; подлежать обложению налогом; получить лицензию на импорт; спрос на что-л.; принять чью-л. отставку; жизненно важный
II. Give one word for each definition:
1) to remain in contact with somebody/something
2) to support one's life, subsist
3) to give up (a job)
4) a group of people employed by a company
5) income for each person
6) to be fed up with something
III. Give synonyms and synonymous expressions to the following words and phrases:
1) to open up a new market
2) to convince
3) disaster
4) competitor
5) staff
IV. Paraphrase the underlined parts of the sentences:
1) The Managing Director toоk a decision to send the Sales Manager abroad to find out whether it is possible to export to that country.
2) The Sales Manager was all for entering a new export market.
3) I can't tell for sure, but it seems that the boss tends to accept your resignation.
4) At the next Board Meeting I'm going to suggest we should enter a new market. I hope you will support me.
5) Before you start a new project you should think what the probable result might be.
6) Don't make any decisions now that you are so furious. You'd better take a walk, calm down and then make up your mind.
7) I think the Director will certainly agree with your idea.
V. Explain the meaning of the following expressions:
1) to back somebody up
2) to have labour trouble
3) to feel strongly about something
4) to be fed up with something
5) to give somebody a chance
VI. Complete the sentences:
1. John thinks "Harper & Grant" should find out whether it would
be possible to export to Abraca because ………………………….
2. The failure of "Harper & Grant" in entering South American market happened due to ……………………………………………………………………
3. The shipping difficulties of exporting to Abraca would be …………..
4. Hector Grant's arguments against John's carrying out field
survey are ………………………………………………………………………..
5. John was so fed up with HG's old-fashioned outlook that he ……………………………………………………………………………………………..
6. HG changed his point of view because ……………………………..
VII. Translate into English:
1. Джон считает, что их фирма должна навести справки о возможности экспорта их продукции в Абраку, особенно в Джемсу, столицу этого государства, где в ближайшее время будет построено множество правительственных учреждении.
2. Грант вспоминает неудачную попытку продать свои изделия в одной южноамериканской стране, предпринятую фирмой несколько месяцев назад и принесшую им большие убытки. Он более склонен к осторожным действиям и волнуется по поводу возможных затруднений и связанных с ними расходов.
3. Нам необходимо расширять экспорт. Ты должен постараться помочь мне убедить м-ра Гранта, что это просто безумие отказываться от расширения нашего бизнеса за рубежом.
4. На южноамериканском рынке нас постигла неудача потому, что у нас были трудности с рабочей силой, и мы не сумели уложиться в сроки поставок. Но нельзя же допустить, чтобы из-за одной неудачи мы перестали бы пытаться выходить на новые рынки!
5. По здравом размышлении, я думаю, сейчас не время заниматься этими исследованиями. Я не хочу тратить деньги на твою командировку в эту страну. У нас и на собственном рынке дел достаточно.
COMPREHENSION QUESTIONS
1. What made John think about exporting to Abraca?
2. What were his arguments for his project?
3. What made HG reject John's idea?
4. What do you think made HG change his mind and agree to John's visit to Abraca?
ADDITIONAL VOCABULARY
Customers, consumers and clients
There are a number of ways to talk about people who buy things.
Customers are individuals or organisations who buy things from shops or other organisations. Consumers are individuals who buy things, especially when considered as members of large groups of such people. Clients are individuals or organisations who pay for services provided by a professional person or organisation such as a lawyer or advertising agency.
A business may refer to its customers as its customer base or client base.
Translate the following sentences into Russian:
● The customer is king. There is increased emphasis on the importance of customer and meeting customer's needs.
● Analysts suggest that while Digital has a strong customer base for mini-computers, many of these users went to other companies when shopping for personal computers.
Consumer combinations
Find combinations that refer to:
1. Things that people buy that last a long time, like refrigerators or televisions.
2. A period when consumers are spending a lot.
3. Refusal by consumers to buy things from a country or company that they disapprove of.
4. The feeling that people have about economic prospects.
5. The amount consumers spend, often referred to when discussing the economy as a whole.
6. The study of how, why, where, and when people buy things.
7. The resistance of consumers to things or organisations that they disapprove of.
|
|
Competition and key players
Competitors are organisations selling products or services in the same market, and they can also be the products or services themselves. Competitors compete with each other. The related adjective is competitive: commentators talk about the things that give one company or product its competitive advantage or competitive edge over others. Competitors in a market are players, and the most important ones are key players. Companies without competitors are monopolies.
Translate the following sentences into Russian:
● Despite the inevitable comparison with Compaq, however, Texas Instruments' new notebook won't be a direct competitor.
● In the words of one exporter, "If you want the competitive edge, you've got to get over there frequently and let your foreign partners know you care about them".
● Fisons has suffered a setback in its ambitions to become a key player in the pharmaceuticals industry.
● Telecoms is still widely associated with “natural" monopolies that competitive businessmen have to be kept away from in order to prevent chaos.
Competitive expressions
Complete these adjectives used to describe competition. They all mean "strong" or "very strong".
|
|
24
Market and market orientation
A market for a product is the people or organisations who buy it or may buy it, or an area where it is sold.
Companies quick to respond to the needs of a market are market-driven, market-led or market-oriented.
These terms show approval, especially when used by organisations about themselves.
Translate the following sentences into Russian:
● Japan has tried to block imports of various uncomfortably cheap foreign products, claiming unique conditions in the Japanese market. French skis, for example, were not allowed in because it was said that Japanese snow was different from Alpine snow and therefore they could not function.
● The argument is that organisations that are market-oriented, i.e. those that track and respond to customer needs and preferences, can better satisfy customers and hence perform at higher levels.
Market partners
Read the examples and complete the commentary.
● ...the long and difficult task of building a market economy from the wreckage of central planning.
● From now on, factories that work without getting paid will go bust. Making that happen is the single most important step the government can take to push Ukraine into a real market economy.
● It is sometimes argued that corruption oils the wheels of a hugely over-regulated economy such as India's, which would otherwise grind to a halt. There is something in this. A black market price, is, after all a market price.
● The newspaper made much of the fact that the Asterix Park did not sell hamburgers. Mr. de Schonen said market research showed that customers preferred not to sit down for meals.
A … is one where things are bought and sold freely and not under government control. In a market economy, prices are decided by …. , the factors that influence the demand for things, their availability, and consequently their price. … is used to indicate that a price has been "decided" by the market, and not in some other way, for example by the government. ... means the same as market. … is the gathering of information on markets, products and consumers: what people need, want, and buy; how and when they buy; and why, they buy one thing rather than another.
Doing some desk research
You work for Tortuga, in Madrid. Tortuga makes toys, and you are looking at the possibility of expanding into South-East Asia. You find some press cuttings. Read them through and find the words or phrases in these articles to tell you the following:
1. Prices will soon rise more quickly.
2. Share prices are expected to fall.
3. Highly-trained workers are difficult to find.
4. People with money to invest in new business tend to invest it abroad.
5. This company intends to go on growing.
6. The countries around the edge of the ocean will soon be the most productive in the world.
BANGKOK CATCHES COLD, TOKYO SNEEZES
Dealers on the Tokyo Stock Exchange yesterday were cautious in the face of rumours that Thai share prices might be threatened by inflation, now running at over 8% and expected to top 9% by the end of this year.
The Nikkei continued its slow upward trend, closing at 35,289 (up 37 on the day), but the market was bearish and expects a downturn. The growing strength of the Thai economy is shown by the fact that its short-term problems can affect the market in Tokyo. This may not, however, be much comfort to Thai finance managers, who struggle to cope with high interest rates, the shortage of skilled labour, and the migration of venture capital to neighbouring countries.
26
TUMBLEHOME ROLL ON TO THAILAND
Thailand may soon become Toyland if leading Tumblehome follow their announcement that they will set up their first South-East Asian subsidiary in Bangkok.
"Continued expansion is built into our company policy," a spokesperson for the company said at a press conference in San Francisco yesterday. "The Pacific Rim is the flywheel of tomorrow’s world economy, and South-East Asia is going to be the motor that turns it."
QUESTION MARK OVER SPANISH TOY FIRM
Rumours that Spanish toymakers Tortuga of Madrid may be going into liquidation were dismissed as "utter nonsense" by the firm's founder and chairman, Juan Figueras, last week.
"We struck a bad patch a year ago," he admitted, "when we failed to keep up with changes in taste and lagged behind on design and marketing. Since then we've invested heavily in new equipment, and
we've got new blood in the design and management teams. Repayments on the new loans aren't due to start for another nine months — by that time I'm confident we'll be paying our way and back in profit."
Look through these articles once again and make a list of "Good news" and "Bad news" for your firm and answer the questions:
Would you try to enter this new market? What else would you like to know about the market? What would you do to get the information you need?
TEXT
Read the following text and summarise the information.