Active Vocabulary
| corporation | |
| to establish | |
| stock certificate | |
| stockholder (shareholder) | , |
| limited liability | |
| juridical personality | |
| to sue | |
| incorporator | |
| to attract financial resources | |
| to offer high salaries | |
| to attract a large amount of capital | |
| educational, religious, charitable institutions | , , |
| to issue stock | |
| nonprofit | |
| to reinvest |
Comprehension Questions
1. Who can own a corporation?
2. What are the main features of a corporation?
3. What are the advantages of the corporate form of ownership?
4. What can you say about the disadvantages of the corporate form of ownership?
5. Do the corporations issue stock to stockholder?
6. What kind of corporations usually doesnt issue the stock?
7. What world-known corporations do you know?
Vocabulary Practice
Exercise 1. Choose the necessary word and put it in the sentence.
1. What kind of... is better: buying stock or buying real estate?
2. To attract greater financial... the company issues the stock.
3. A university can be... corporation.
4. The partners didn't put the same... into business.
5. The group of people from different countries is going to... a corporation.
6. The Red Cross is an international... organization.
7. I want to buy some... in IBM and General Motors.
8. An educational... usually reinvests all its money.
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Charitable, stock, resources, institution, investment, nonprofit, amount of capital, to establish
Dialogue
Read the dialogue and discuss with your partner what sort of legal procedure you will follow to form a corporation.
Secretary: Good afternoon
Steve: Good afternoon. I'd like to see Mr. Jackson. We have an arrangement with him. My name is Mr. Watson.
Secretary: Just a minute, please. I'll let him know you are here.
Steve: Thanks.
Secretary: Mr. Jackson is waiting for you. Do you know where his office is?
Steve: Oh sure, thank you.
Jackson: Hello, Steve, it's so nice to see you. Sit down, please.
Steve: Thanks, Nick. How are you getting on?
Jackson: Quite all right, thanks. And what about you?
Steve: Everything is all right too. In fact I want to talk to you about my business.
Jackson: Oh, I'll be glad to do something for you.
Steve: Well, Nick. I need some legal advice. John and I are thinking of incorporating.
Jackson: You are going to expand, aren't you? It seems that your partnership has been doing very well.
Steve: Oh, yes. We have a success. Now some businessmen are interested in investing with us. So could you explain me what sort of legal procedure I have to follow to form a corporation?
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Jackson: At first you have to apply for a corporate charter.
Steve: Well?
Jackson: Let me get this straight. You want to issue and sell stock in exchange for investment capital, don't you?
Steve: Exactly.
Jackson: After you obtain the charter the stockholders, as owners, hold a meeting to organize the corporation.
Steve: Does that mean we elect our Board of Directors, adopt bylaws and choose the company's officers?
Jackson: That's what I mean. Though the officers of the company supervise daily management, the stock holders always have final authority. They vote at annual meetings.
Steve: Yes, I see it. By the way, does a corporation have limited liability?
Jackson: It does. It also has the right to own property, to buy and sell and right to sue and be sued.
Steve: I see. The corporation acts like a person. It has the right of an individual.
Jackson: You are right.
Steve: O.K. Why don't we get together for a game of golf one day next week?
Active Vocabulary
| bylaws | |
| I need some legal advice | |
| to incorporate | , |
| to invest | |
| to expand | ( ) |
| to follow a legal procedure | |
| to apply for a corporate charter | |
| to issue and sell stock | |
| in exchange for investment capital | |
| to hold a meeting | |
| to elect a board of directors | |
| to choose the company's officers | |
| to have a final authority | |
| to supervise daily | |
| management | |
| to vote | |
| annual meeting | |
| to own property |
Vocabulary Exercises
Exercise 1. Transform the sentences according to the model.
Model: We are the company officers.
We supervise daily management.
We, as the company officers, supervise daily management.
1. My friends are the stockholders of IBM Corporation. They hold annual meetings.
2. These businessmen arc the organizers of this corporation. To issue and sell stock in exchange for investment capital.
3. A corporation is the owner of the property. It has limited liability.
4. Dick is a manager. He wants to form a corporation.
5. A corporate charter is a certificate of incorporation. A charter is granted by a state officer.
6. The stockholders are the owner of the corporation. They have final authority in management of the company.
7. The owners of the corporation are the stockholders. The owners of the corporation must vote.
Exercise 2. Transform the sentences according to the model.
Model: We organized our corporation a year ago (to invest much money).
We have been investing much money since we organized our company.
1. They became company officers (to supervise daily management).
2. My friend bought the stock of the company five years ago (to make money).
3. They received the corporate charter a month ago (to plan a meeting).
4. We advertised the application last week (wait for reply).
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5. He became a member of the Board of Directors (work hard).
6. We elected a new Board of Directors last month (plan change).
Exercise 3. Answer the questions.
1. In what corporation would you invest money?
2. What legal procedure do you have to follow if you want to form a corporation?
3. Who has final authority and supervises the daily management of a corporation?
4. How often do the stockholders choose the company officers?
5. The stockholders have unlimited liability, don't they?
6. In what way can a corporation act?
7. What do you think about the possibilities of forming corporations in thiscountry?
8. In what spheres of industry is a corporate form of proprietorship the most beneficial in this country?
Exercise 4. Translate into English.
1. .
2. .
3. , .
4. .
5. , , . , , .
6. , .
7. .
8. .
9. .
10. .
11. .
Exercise 5. Make up the dialogue.
1. Ask a lawyer how to form a corporation.
2. Discuss with your friend advantages and disadvantages of a corporate form of proprietorship.
3. Advertise a corporate form of proprietorship.
LESSON 2
CORPORATE FINANCE
Corporations need financing for the purchase of assets and the payment of expenses. The corporations can issue shares in exchange for money or property. Sometimes it is called as equity funding. The holders of the shares form the ownership of the company. Each share is represented by a stock certificate, which is negotiable. It means that one can buy and sell it. The value of a share is determined by the net assets divided by the total number of shares outstanding. The value of the share also depends on the success of the company. The greater the success, the more value the shares have.
A corporation can also gel capital by borrowing, it is called debt funding. If a corporation borrows money, they give notes or bonds. They are also negotiable. But the interest has to be paid out whether business is profitable or not.
When running the corporation, management must consider both the outflow and inflow of capital. The outflow is formed by the purchase of inventory and supplies, payment of salaries. The inflow is formed by the sale of goods and services, in the long run the inflow must be greater than the outflow. It results in a profit. In addition, a company must deduct its costs, expenses, losses on bad debts, interest on borrowed capital and other items. It helps to determine if the financial management has been profitable. The amount of risk involved is also an important factor. It determines the fund rising and it shows if a particular corporation is a good investment.
Active Vocabulary
| purchase - | , , |
| payment of expenses- | |
| property - | , |
| equity funding | () |
| debt funding- | |
| holders of the shares- | |
| stock certificate - | |
| negotiable | , , , |
| net assets - | |
| bond- | , |
| note- | . |
| to pay out - | |
| to run a corporation- | |
| inflow- | (. ) |
| outflow- | (. ) |
| inventory - | - , |
| supplies - | |
| debt- | |
| goods - | |
| interest- | , |
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Comprehension Questions
1. Why do all corporations need financing?
2. What does equity funding mean?
3. What does debt funding mean?
4. How is the value of a share determined?
5. What activities produce an inflow and outflow of capital?
6. What can happen if an enterprise has a greater outflow of capital than an inflow?
Vocabulary Practice
Choose the necessary word and put it in the sentence.
1.... funding is a financing formed by borrowing.
2. They have borrowed much money and they have to pay a big....
3. Financing by shares is called... funding.
4. That is a very profitable deal, for that purpose we need extra...
5. You can sell your shares and..., they are...
6. The current assets of a company usually include cash and...
7. As a result of this deal we'll have greater... than outflow.
Equity, negotiable, interest, inventory, funding, inflow, bond, debt.
Dialogue
Read the dialogue and say if it is good for Mary to invest her money.
Mary: Its so nice to see you, Frank. Sorry, I couldn't come to your office today.
Frank: Never mind. Have a seat. Let's start by having some coffee.
Mary: So Frank. I guess it might be right time for me to invest in that computer company. As my stockbroker, what can you suggest?
Frank: I am sure they are doing extremely well and they would welcome your investment.
Mary: But why do they need my investment if they are doing so well?
Frank: O.K. I think I should explain you a little about a corporate finance.
Mary: Go ahead. If it concerns my money I am always interested.
Frank: If a corporate enterprise wants to expand it needs financing.
Mary: You are right.
Frank: So there are two basic types of financing: equity and debt.
Mary: What's the difference between them?
Frank: If the money is supplied by the owners of a business it is called equity funding. And the use of money supplied by loans is called debt funding.
Mary: So as investor, what am I?
Frank: Well, as an investor you become a partial owner of a business and receive equity. You get shares or certificates of common stock which represent your portion of ownership
Mary: You did right buying the stock for me. By the way, are there any documents which show the financial state of the company?
Frank: Oh yes. You've just reminded me. I've brought a copy of the company's Annual Report for you to look over. You should read it very carefully. And if you have something to ask do it, please.
Mary: Thanks a lot, Frank. I will. Does this company pay dividends on its stock?
Frank: Yes. In fact, I studied their Annual Report and I can tell that they have good management. Their business is doing very well, the value of their stock has been rising. It can be an excellent long-term investment, I am sure.
Mary: But if I want to sell my shares very soon?
Frank: No problem. Undoubtedly you can make a profit on the sale. But it seems to me you'll want to keep this company in your portfolio.
Mary: Thank you for your advice. You are wise as usual.
Frank: Well, my advice now is to study the company's Annual Report. You need several days for that. Then we'll meet and talk again.
Active Vocabulary
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| stockbroker | |
| loan | , |
| partial owner | |
| Annual Report | |
| to pay dividends | |
| long-term investment | |
| to make a profit on the sale |
Vocabulary Exercises
Exercise 1. Make up a sentence according to the model.
Model: How should the company pay the expenses?
(borrow from the government)
The company should pay the expenses by borrowing from the government.
1. How can we form an equity funding? /issue shares/
2. How can a business self more shares of stock? /offer a dividend/.
3. How should we know about the financial state of the company? /look over the Annual Report/.
4. How should he invest his savings? /buy common stock/.
5. How should they make people buy their bonds? /increase the interest/.
6. How can this company make a profit? /raise investment capital/.
Exercise 2. Notice the sentence from the dialogue. You need several days for that. Use this structure to respond the following sentences.
Model: It takes a month to sell the bonds. You need a month to sell the bonds.
1. It will take a half of the year to pay off the debts.
2. It takes her several days to count up net assets.
3. It won't take the company much time to repay the loan.
4. It will take him the rest of his life to learn how to run the corporation.
5. It takes them two days to sell the goods.
6. It will take them much time to decrease the outflow.
7. It will take him a month to raise the capital.
Exercise 3. Answer the questions.
1. What kind of funding is preferable: equity or debt?
2. What shares of what enterprises of your town would you buy? Explain why.
3. Imagine that your business is going to get capital funds by borrowing. What bond interest would you charge? Explain why.
4. What should you do to produce more inflow of capital?
5. How can you calculate the net assets of your enterprise?
6. What traits of character does a stockbroker need?
Exercise 4. Translate from Russian into English.
1. .
2. . .
3. , , .
4. .
5. .
6. .
7. SONY.
8. .
9. , .
Exercise5. Analise the financial state of the biggest companies in your country and speak about the advantages and disadvantages of investing in them.
LESSON 3
BANKS AND BUSINESS
The principal types of banking in the modern industrial world are commercial bank and central bank. A commercial bank deals in money and in substitutes for money, such as checks or bills of exchange. The bank also provides a variety of other financial services. The basis of the banking business is borrowing from individuals, firms, and occasionally governments i.e., receiving deposits from them. With these resources and also with the banks own capital, the banker makes loans or extends credit and also invests in securities. The banker makes profit by borrowing at one rate of interest and lending at a higher rate and by charging commissions for services rendered.
As for central bank, they are charted and supervised by the state. They are often responsible for formulating and implementing monetary and credit policies, usually in cooperation with the government. Major commercial banks in such cities as Tokyo, Paris, Rio cooperate with each other. In this way they finance imports and exports between countries. An importer buys merchandise from another country using the currency of that country. For that purpose he buys this currency from the foreign exchange department of his bank. And in the same way if an exporter receives foreign money from sales to other countries, he sells this currency to his bank. By this method the currency of any country can usually be exchanged.
A bank must always have cash balances on hand in order to pay its depositors upon demand or when the amounts credited to them become due. It must also keep a proportion of its assets in forms that can readily be converted into cash. Only in this way can confidence in the banking system be maintained.
Active Vocabulary
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| commercial bank | |
| central bank | () |
| to deal in | - |
| bill of exchange | |
| securities (always pl.) | |
| rate of interest (interest rate) | |
| to lend | |
| to charter | , |
| to supervise | , |
| merchandise | |
| currency | , |
| foreign exchange department | |
| to exchange currency |
Comprehension Questions
1. What are the functions of commercial banks?
2. Who supervises the operations of central bank?
3. What do you know about the International exchange?
4. What is the exchange rate between your currency and the currency of the USA and Germany? How can you find it out if you don't know it?
Vocabulary Practice
Exercise 1. Choose the necessary word and put it in the sentence.
1. Federal government..... and..... all national banks.
2. International cooperation between banks makes it possible..... imports and exports.
3. It is possible to convert American dollars to Swiss francs in..... department.
4. The..... of Germany is the euro.
5. All..... banks make loans to borrowers.
6. If the importer buys..... from another country he will pay for it in the currency of this country.
Merchandise, currency, commercial, foreign, exchange, to finance, to supervise, to charter
Dialogue
Read the dialogue and discuss with your partner the services which bank offer to business.
(A banker's office in New York City. Mr. Smith, a Vice President, is speaking to Bill Wilson).
Smith: O.K. Bill. As a secretary you ought to know certain things about banking.
Bill: That's what I want. I hope to make my career in banking.
Smith: And what bank services are you familiar with?
Bill: Oh, let me see. I am familiar with checking and savings accounts, safety deposit boxes, insurance and things like that.
Smith: It is something.
Bill: But I don't have a clear idea of the services which banks offer to business.
Smith: O.K. Let's discuss it then. In fact it is more directly concerned with what passes over my desk.
Bill: I think businesses come to the banks for loans.
Smith: You are right. Banks make loans to corporations, to organizations, individuals and to small companies. For this service, we always charge interest.
Bill: But how can a bank decide whether a business should receive a loan.
Smith: First of all we request a financial statement. It shows what the company has in inventory, accounts receivable and other assets and liabilities. Profit and loss statement shows the company's income and expenses.
Bill: In other words you look over the financial situation of a business.
Smith: Exactly. If the company is eligible for a loan, it may choose a long-term loan or a short-term loan.
Bill: I see. And how much interest does the bank charge on these loans?
Smith: It can be different. We have so-called prime-rate that is the lowest interest rate available at the particular time. Only preferred customers can have it.
Bill: Who decides on prime-rate then?
Smith: Major lending banks do.
Bill: Oh, I must know that. And very often I hear the term a line of credit. I have a vague idea what it is.
Smith: A line of credit is the maximum amount of money that a company can borrow from a bank. This top amount of customer's credit is based on the profits and earnings of a business.
Bill: Well. Then it is very important to have a good line of credit, isn't it?
Smith: Sure. A bank also issues letters of credit. Such letter says that its holder can borrow up a certain sum of money. Or a bank can also issue a letter of credit for a person who goes to the other country where another bank is involved. Then there is also the credit reference letter which recommends a company to its suppliers.
Bill: Thank you. Its very useful information.
Smith: O.K. We can pass on to a more complicated subject. That is tax service.
Active Vocabulary
| banking | |
| to make a career in smth. | - |
| bank services | |
| checking account | |
| savings account | |
| safety deposit box | , |
| insurance | |
| to make a loan to smb. | - |
| to be eligible for a loan | (.. ) |
| long-term loan | |
| short-term loan | |
| prime-rate | , |
| preferred customer | |
| to be available | , |
| line of credit | |
| to borrow | |
| letter of credit | |
| credit reference letter |
Vocabulary Exercises
Exercise 1. Answer the questions.
1. Is there a difference between banking systems in Russia and western countries? What is the difference?
2. What bank services are you familiar with?
3. Do the banks in this country have safety deposit boxes?
4. Whom do the banks make loans to in your country?
5. What kind of loan would you prefer, long-term loan or short-term loan?
6. What prime-rates are available in this country?
7. What does the line of credit of the enterprise depend on?
8. What is a credit letter written for?
9. What can one do with credit reference letter?
Exercise 2.
1. Speak about banking system in your country.
2. Make up a dialogue between a bank man and a customer, who wants to take a long-term (short-term) loan.
Exercise 3. Translate into English.
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- , .
- .
- .
- .
- .
- .
- .
- , .
LESSON 4
MARKETING
Marketing includes all the business activities connected with the movement of goods and services from producers to consumers. Sometimes it is called distribution. On the one hand, marketing is made up of such activities as transporting, storing and selling goods and, on the other hand, a series of decisions you make during the process of moving goods from producer to user. Marketing operations include product planning, buying, storage, pricing, promotion, selling, credit, traffic and marketing research.
The ability to recognize early trends is very important. Producers must know why, where, for what purpose the consumers buy. Market research helps the producer to predict what the people will want. And through advertising he attempts to influence the customer to buy. Marketing operations are very expensive.
Marketing is not confined to any particular type of economy, because goods must be exchanged and therefore marketed in all economies and societies except perhaps in the most primitive. Furthermore, marketing is not a function that is limited to profit-oriented business; even such institutions as hospitals, schools, and museums engage in some forms of marketing.
Active Vocabulary
| producer | |
| consumer | |
| user | |
| distribution | , |
| marketing | , , |
| transporting | |
| storing | , |
| storage | |
| product planning | |
| pricing | |
| promotion | (- ) |
| traffic | |
| marketing research | |
| trend | , |
| to predict | |
| to influence |
Comprehension Questions
1. What does marketing mean?
2. What activities does marketing consist of?
3. What do marketing operations include?
4. Why is it so important for the producer to predict the trends?
Vocabulary Practice
Exercise 1. Choose the necessary word and put it in the sentence.
1. One of the aims of market research is to indicate new... among people.
2. Advertising must... the consumer and makes him buy the goods produced.
3. Often marketing is called....
4. In order to sell a new product, a producer has to consider how to... it.
5. The goods of this company are not sold very well, they must think about....
6. Sometimes it is difficult to influence... through advertising.
7. If you what to produce something new, you should start with....
8. A producer wants to... the new trends and then tries to influence them.
9.... includes product development and pricing among other things.
Predict, influence, promote, marketing, trends, distribution, market research, product planning, consumer
Dialogue
Read the dialogue and discuss with your partner the advantage of Dons plan.
(Sally and Don work in the Marketing Department of a company that makes different meal products.)
Don: Hey, Sally, look at these figures. The price of sugar is going up 10% during the next year.
Sally: Oh, that's bad. That means trouble for our jam line.
Don: I think so too. Sugar is the main ingredient, you know. What's your opinion?
Sally: Well, we are not the price leaders in the field and jam is a very price sensitive item. According to our marketing research information consumers aren't particularly brand loyal about jam.
Don: I have a brilliant idea. You know, this could be a great marketing opportunity for us.
Sally: What do you mean?
Don: Well, because of the price rise in sugar we know that the price of jam will go up too. The increase will pass on the consumer, won't it?
Sally: Right.
Don: Imagine, we find the possibility of changing the ingredients in the jam so that we wouldn't have to raise the price.
Sally: Then we wouldn't trouble about the price rise on sugar because we'll be able to sell the jam at the same price. The idea is that we could market less expensive jam. What a promotional campaign we could have!
Don: Sure. If we do it right we'll sell more and become the leader in the market.
Sally: Now the first thing is to talk to Research and Development.
Don: Right and we'll see when they'll have some samples of new formulas ready.
Sally: What about marketing research? I think we should schedule some tests for responses to the R & D samples.
Don: Well, there is a lot to do. I think we should also change packaging. Now, Sally, that would be great.
Sally: Oh, Don, let's hope for the best. If we don't lose the chance, the competitors products will stay on the supermarket shelves.
Don: Oh, it's time for lunch. Let's discuss our business in cafeteria.
Sally: Oh, sure, we've got a lot to discuss - distribution, advertising...
Active Vocabulary
| to go up | ( ) |
| to raise the price | |
| price leader | , |
| price sensitive item | , |
| to be brand loyal | |
| promotional campaign | |
| to market | |
| to schedule | |
| packaging | |
| competitor |
Vocabulary Practice
Exercise 1. Choose the necessary word and put it in the sentence.
1. If the price on this product.... nobody will buy it.
2. They should... some tests and pass the results to R.B.
3. This company is the... in this field, they can sell this product at the lowest price.
4. Customers do care about the price on this product, it is a very....
5.... influences the desire of a customer to buy.
6. Our...has become the price leader in, selling computer programmes.
Go up, schedule, packaging, competitor, price leader, price sensitive item
Exercise 2. Answer the questions.
1. Who is the price leader in your business?
2. How can you become a price leader? What should you do for this?
3. How should one start a promotional campaign?
4. Why is it dangerous to produce price sensitive goods?
5. Why is it important to have competitors in business?
6. What should you do to leave your competitors behind?
7. What knowledge must you have to be good at marketing?
Exercise 3. Translate into English.
- , .
- , , , , .
- .
- .
- .
- .
- .
Exercise 4. Makeyour own marketing plan of any product.
LESSON 5
WHOLESALING
Wholesaling is a part of the marketing system. It became particularly advantageous after the introduction of mass production and mass marketing techniques in the 19th century. Wholesaling provides channels of distribution which help to bring goods to the market. Generally indirect channels are used to market manufactured consumer goods. It could be from the manufacturer to the wholesaler, from the retailer to the consumer or through more complicated channels. A direct channel moves goods from the manufacturer or producer to the consumer.
There are three main categories of wholesalers: (1) merchant wholesalers, (2) manufacturers' sales branches, and (3) merchandise agents and brokers. Two-third of the wholesaling middlemen are merchant wholesalers who take title to the goods they deal in. Manufacturers' sales branches are businesses established by manufacturers to sell directly to retailers. There are alsomerchandise agents who negotiate purchases or sales or both. They don't take title to the goods they deal in. Sometimes they take possession though. These agents don't earn salaries. They receive commissions. This is a percentage of the value of the goods they sell.
Active Vocabulary
| wholesaling | |
| to provide channels | () |
| indirect channels | , () |
| complicated channels | () |
| retailer | |
| merchant wholesaler | |
| manufacturers' sales branches | |
| merchandise agents | , () |
| middleman | , |
| wholesaling middleman | () |
| to take title to the goods | |
| to negotiate purchases or sales | |
| to earn salary | |
| to receive commissions | ( ) |
Comprehension Questions
1. What is the aim of the wholesaling?
2. How can you describe a direct channel of distribution?
3. What is an indirect channel of distribution?
4. What channel of distribution is preferable?
5. Is there any difference between a merchant wholesaler and an agent middleman? What is this difference?
6. How does a wholesaler simplify the process of distribution?
7. What would a retailer have to do without wholesalers?
Vocabulary Practice
Exercise 1. Choose the necessary word and put it in the sentence.
1. They use both direct and indirect of distribution.
2. Merchandise agents do not... to the goods they deal in.
3. Usually wholesaling... stands between the producer and the retailer.
4. A supermarket may... thousands of commissions items.
5. Usually a wholesaler handles a large... of items of numerous manufacturers.
6. Merchandise agents don't earn salaries, they....
7. A wholesaler doesn't deal with the customers,... does.
8.... simplify the problems of manufacturers.
Wholesalers, to take title, retailer, stock, channels, assortment, to receive commissions, middleman
Dialogue
John is explaining his new job to his wife, Susan. He is a sales trainee for a company.
John: It's a great job, you know. The salesmen are paid salaries instead of being on commission.
Susan: Why do you find it great? You can earn less money.
John: Well, its a regular weekly salary. And besides we get reimbursed for everything: lunches and dinners even the football tickets, the car, gasoline, tolls.
Susan: That's really great.
John: And I'm going to get a raise in three months.
Susan: And what are you going to sell?
John: Foam rubber.
Susan: What is it used for?
John: It is used to make couches and beds; generally I deal with furniture manufacturers
Susan: So you will travel much, wont you?
John: No. Delivery is a part of our wholesaling operation. Foam is sold and delivered by the truckloads. It is rather bulky and it is expensive to have it shipped a big distance. We are going to deal with buyers who are in this region.
Susan: Thats fine. I dont want you to travel too much. By the way I want to know more about sales procedure.
John: At first I go to see a buyer. We discuss what he needs after that I send him a written quote. If our prices suit him, hell call us and send an order.
Susan: Do you take orders over the phone?
John: Yes. The buyers are always in a hurry and a letter would take too much time to come. If its a verbal agreement we call it gentlemens agreement.
Susan: And what happens after the verbal agreement?
John: We receive a written purchase order. It is called p.o. and it has a number that we use for all future correspondence on that order. The office then retypes the order form and the p.o. and order form are stapled together and filed.
Susan: It sounds organized. Whom do you usually deal with in a company?
John: Well, Ill deal with purchasing agents. But I could deal with any administration from the president on down, in some cases.
Susan: Good. Soon youll get your raise.
John: Yes. Selling is usually a stepping stone to higher positions in management.
Susan: Dont worry, dear. If it doesnt work out, we still have my job.
Active Vocabulary
| sales trainee | |
| to be on commission | |
| to reimburse | , |
| to get a raise | , |
| toll | , |
| foam rubber | |
| quote | |
| delivery | |
| gentlemen's agreement | |
| verbal agreement | |
| purchase order (p.o.) | |
| to deliver | |
| to staple | (.) |
| to file | , |
| stepping stone |
Vocabulary Practice
Exercise 1. Make up the conditional sentences.
Model: consult the middleman / he - smart
If he were smart, he would consult the middleman.
1) be a wholesaling middleman / he - Interested
2) work for themselves / men - independent
3) earn a good salary / he - happy
4) use direct channels / business - successful
5) have the secretary do it / she - there
6) handle it well / he -fail
7) order it next month / I rich
Exercise 2. Answer the questions.
1. Would you like to be on commission?
2. What expenses do you get reimbursed for at your job?
3. What factors do you need to get a raise?
4. Why isn't a verbal agreement always sufficient?
5. What would you prefer to be: a wholesaler or a retailer?
6. What is a stepping stone to higher positions in your business?
Exercise 3. Translate into English.
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
- .
LESSON 6
RETAILING
Retailing is selling goods and services to the ultimate consumer. Thus, the retailer is the most expensive link in the chain of distribution. Being middlemen, they make their profit by charging the customer 25 to 100 per cent more than the price they paid for the item.
The retailers operate through stores, mail-order houses, vending machine operators. There are different types of retell stores: department stores, discount houses, single line retailers. The major part (over 95 per cent) of retail establishments concentrate on a single line of merchandise for example, food, hardware, etc. But nowadays there is a trend for many single line stores to take on a greater variety of supplies.
The retailer performs many necessary functions. First, he may provide a convenient location. Second, he often guarantees and services the merchandise he sells. Third, the retailer helps to promote the product through displays, advertising or sales people. Fourth, the retailer can finance the customer by extending credit. Also the retailer stores the goods in his outlet by having goods available.
Active Vocabulary
| retailing | |
| ultimate consumer | |
| link | , |
| mail-order house | |
| discount | |
| vending machine operator | ( : , ..) |
| discount house | |
| single line retailer | , - |
| to perform functions | |
| extending credit | |
| outlet | , |
Comprehension Questions
1. What is retailing?
2. What are the types of retail stores?
3. In what way does a retailer serve a customer?
4. In what way does a retailer serve a manufacturer?
5. Which per cent of the price of the good sold goes to the retailer?
6. What is the trend with a single line retailer now?
Vocabulary Practice
Exercise 1. Put the necessary word in the sentence.
1.... is one function a retailer may perform.
2. You can buy newspapers, cigarettes, cookies from a....
3.... is the most expensive link in the chain between a producer and a consumer.
4. The firm... good quality of the product.
5. She doesn't like to go shopping; she prefers to do it by....
6. The department store is having a sale and there is a 20 per cent... on all fight dresses.
7. Retailing is an important... between a producer and a consumer.
Mail-order, discount, vending-machine, to guarantee, retailer, extending credit, link
Dialogue
Read the dialogue and pay attention to different kinds of retail stores.
(Jean has just moved into a new house. Her neighbour, Liz, has come over to welcome her.)
Jean: I am very glad to see you here.
Liz: How do you like the new place?
Jean: It's marvelous. I am sure we are going to love living here.
Liz: Well, have a look. Here, it's a shopping guide for the neighbourhood and a booklet of discount coupons. New neighbours always receive them. There is one coupon for every store in the shopping guide.
Jean: Oh, thank you. Its come in time. I have a lot of shopping to do.
Liz: I can imagine, having just moved in. Not far from here there's a very good shopping center. You can also find a huge supermarket, a drugstore, some department stores in the neighbourhood.
Jean: Great. Are there any small stores nearby?
Liz: Oh, yes. The map is right here in the shopping guide. There is a little drugstore a few blocks away, a little grocery store next to it, a little boutique, an ice cream parlor, a pizza place. You can find a plant store not far from here too.
Jean: Are there any good discount houses nearby? We terribly need a new toaster. Everybody in my family likes toasts for breakfasts very much. I'd like to buy it.
Liz: Oh, sure. There is a good discount store in the shopping center. If you like, I'll come with you.
Jean: Oh, you needn't. I don't want to trouble you.
Liz: No trouble at all. I'd like to do some shopping too. If we go to the discount center I can go to that little cheese shop. I don't want to bother you.
Jean: It's no bother at all. Make out your shopping list and I'll be your guide. By the way, you can use your discount coupon for the toaster.
Liz: I am sure you'll buy a good one.
Jean: Well, it'll take some time to make a shopping list. I'll have to buy a lot at the grocers.
Liz: This is a good idea. I should have gone shopping yesterday, so I'll make up my list too.
Jean: By the way, I like your dress very much. It's a perfect fit. Where did you buy it, if you don't mind my asking?
Liz: Thank you for compliment. I got it at a very nice little boutique. It's a bit expensive, but there are many interesting and original things. If you are interested we can stop there.
Jean: I'm afraid I can't. I have to cook dinner.
Liz: Oh, don't trouble yourself with the dinner. Look over the coupons Ive given you. You can go out to dinner at a discount store.
Active Vocabulary
| shopping guide | |
| discount coupon | , |
| grocery |
Vocabulary Practice
Exercise 1. Change the sentences according to the model.
Model: My wife usually asks the children to do shopping.
My wife usually makes children do shopping.
1. He'll ask single line retailers to take part in the promotion campaign.
2. The chief usually asks his immediate subordinates to perform different functions.
3. Ifs necessary to ask him to recognize his wholesaling units.
4. Ifs important to influence ultimate consumer to buy this product.
5 Ask him to buy all these things in the discount house.
Exercise 2. Answer the questions.
1. What kind of shops in your country do you know? 2. What shops are situated not far from your house? 3. What goods can be bought there? 4. What specific features do channels of distribution have in your country? 5.What reforms does your country need to reorganize the channels of distribution?
Exercise 3. Translate into English.
1. .
2. : , , ..
3. 10% .
4. .
5. .
6. .
7. , .
8. .
9. .
Exercise 4.
Look at this chart and speak about advantages and disadvantages of different methods of distribution.
direct method of distribution
Producer Consumer
