7. Make a dialogue with your partner speaking on:

1. The controllable factors in marketing.

2. How the company charges the prices.

3. The channels of distribution.

4. Promotion which is hard to do.

5. Your understanding of the term “the product life cycle”.

8. Various problems that may occur in the marketing process are listed below. Determine to which of the four Ps each problem is closely related. Tick the appropriate category of product, price or promotion.

Product Price Promotion

1. The advertising gives false information. x

2. The product is dangerous.

3. The product is not available in a store.

4. The product is too expensive.

5. A shop assistant is not kind to customers.

6. The product is lack of quality.

7. The advertising is of poor quality.

8. The price of a product increases faster than

the rate of inflation.

Additional texts text a

9. Read the text and answer the following questions:

1. What does a chain of production show?

2. What’s the difference between the extractive and manufacturing industries?

3. Where can chains of production be used?

4. Is there any difference between consumer and producer goods?

Chains of Production

A chain of production shows the different stages of production necessary for a good to reach the final customer. This figure shows a simplified chain of production for chocolate:

	E xtractive Industry ( Aids to Trade assist at each stage of production the growing of cocoa, sugar cane, etc)

Aids To Trade

M anufacturing Industry (converts raw materials into chocolate)

Wholesales

Retailers

Final Consumer

Chains of production can be used to illustrate:

- increasing value at each stage of production;

- interdependence;

- the distinction between consumer goods and producer goods.

In this figure, for example, cocoa worth $ 2000 may be sold to manufacturing industry, which converts the cocoa into chocolate, which is sold for $5000. Manufacturing industry has therefore added value of $3000. The values added at each stage of production form the basis of value-added tax.

Interdependence means that individuals, firms and countries depend on each other. Thus, firms in manufacturing industry need extractive industry to provide them with raw materials. At the same time firms in extractive industry need manufacturing industry to provide them with machinery to extract the raw materials.

Consumption takes place at each stage of the process. For example, manufacturing industry buys or consumes raw materials from extractive industry. When the general public buys the chocolate, it is not for resale and the chain of production stops here. Goods bought by the final consumers are consumer goods and goods bought by firms to make consumer goods are producer goods.

GET TALKING