Advertisers perform a useful service

TO THE COMMUNITY

 

Advertisers tend to think big and perhaps this is why they are always coming in for criticism. Their critics seem to resent them because they have a flair (способность) for self-promotion and because they have so much money to throw around. “It’s iniquitous”, they say, “that this entirely unproductive industry should adsorb millions dollars each year. It only goes to show how much profit the big companies are making. Why don’t they stop advertising and reduce the price of their goods? After all, it’s the consumer who pays…”

The poor old consumer! He would have to pay a great deal more if advertising didn’t create mass markets for products. It is precisely because of the heavy advertising that consumer goods are so cheap. But we get the wrong idea if we think the only purpose of advertising is to sell goods. Another equally important function is to inform. A great deal of the knowledge we have about household goods derives largely from the advertisements we read. Advertisements introduce us to new products or remind us of the existence of ones we already know about. Supposing you wanted to buy a washing-machine, it is more than likely you would obtain details regarding performance, price, etc., from an advertisement.

Lots of people pretend that they never read advertisements, but this claim may be seriously doubted. It is hardly possible not to read advertisements these days. And what fun they often are, too! Just think what a railway station or a newspaper would be like without advertisements. Would you enjoy gazing at a blank walls or reading railway bye-laws (правила внутреннего распорядка) while waiting for a train? Would you like to read only closely-printed columns of news in your daily paper?

We must not forget, either, that advertising makes a positive contribution to our pockets. Newspapers, commercial radio and television companies cold not exist without this source of revenue. The fact that we pay so little for our daily paper, or can enjoy so many broadcast programmes is due to the money spent by advertisers. Just think what a newspaper would cost if we had to pay its full price!

Another thing we mustn’t forget is the “small ads”, which are in almost every newspaper and magazine. What a tremendously useful service they perform for the community! Just about everything can be accomplished through these columns. For instance, you can find a job, buy or sell a house, announce a birth, marriage or death in what used to be called the “hatch, match and dispatch” columns. No other item in a newspaper provides such entertainment reading or offer such a deep insight into human nature. It’s the best advertisement for advertising there is!

TEXT 5

Advertising and Advertisements

In the eyes of the business world and of many economists, advertising serves an indispensable function. It helps consumers to choose among competing products. Also, by spurring demand for products, it extends the possibilities of mass production and thus leads to the economies of scale and to lower consumer costs. Advertising plays a very important part in modern merchandising. The manufacturers tell the public about their new products and the stores and the stores tell the public about what products they have at what prices.

Advertisements can be seen in newspapers, magazines, and on television every day of the week. Many more advertisements are sent to customers’ homes.

Advertising companies are called agencies. Each agency sells a lot of different products. Here is how it happens. The first stage is marketing research. Marketing researchers get information in three ways: on the phone, in group discussions, from questionnaires. The agency then writes, films, records and photographs a campaign. This is a series of advertisements on TV, on the radio, in newspapers and magazines.

This great business of merchandising employs millions of white-collar workers, from clerks in the stores to top executives in the big department stores and the advertising agencies. For most clerks the salaries are low, but they are among the highest for top executives.

In the business world advertising is sometimes depicted as ‘the engine of prosperity”. From another prospective, however, advertising goes against important social values. It promotes self-indulgence and thus counters moral and religious teachings that urge selflessness. It creates false “needs” and encourages waste.

This inevitable tension between business values and other social values often spills onto the political stage, with the institutions of government struggling to resolve a point at issue. Should there be limits on the types of products that business people can advertise? Should advertisers be forced to mention the hazards as well as the attractions of products such as cigarettes? Should advertisers be required to substantiate their growing claims? Democratic political processes provide answers to such questions in a continuing process of adjustment and change increasingly offering protection to the consumer against false or harmful advertising.

TEXT 6

 

ENTERING THE RIGHT INTERNATIONAL MARKET

 

When a British marketing manager turns his attention to overseas markets one of the problems could be seen as communication in an unfamiliar environment. If we are attempting to penetrate an international market we first have to receive an accurate picture of that market. What is its nature and extent? How does it differ from our more familiar home market? The further afield we look, the more difficult it becomes to get an accurate picture. In brief, our market research becomes more difficult and less trustworthy.

In order to trade profitably overseas we have to select the right market or markets to enter. There is a temptation to try and sell in as many markets as possible, but that temptation should be resisted. By concentrating our resources on a few carefully selected areas, we can maximize total profit on sales rather than spread investment too thinly. Some information can be assembled without us moving from our desks. Our banks can help us with information on general economic and trading conditions, the sort of competition we might expect, and even the marketing methods which are most likely to succeed.

When we have identified our market, we will have to visit the country or countries concerned. We will have to make contact with potential customers whose very language is strange to us. Of course we have in our favour the fact that English is the international language, and certainly the language of commerce. Yet, in some ways, it is the overseas buyers who have the advantage. They know our language almost as well as theirs. Our handicap is that we know only our own language as we go abroad with our task to persuade them to buy our product.

No doubt this is why British exporters are generally advised to avoid direct selling in a new export market. The best way to gain a foothold is through a local agent or distributor. Once again our bank can help in finding an agent in the overseas territory who is both reputable and effective.

 

 

TEXT 7

COMPETITION

When capital, labour and enterprise combine to make a new business successful, the business must still continue to compete on the market with other companies producing the same type of commodity. The term “market”, as used by economists, is a logical extension from the idea of a place set aside for buying and selling. Formerly, part of a town was kept as a market place, and country people would come in on market-days to buy and sell. Markets today need not, however, be located in any fixed place: the sugar market and the cotton market are not geographical locations, but simply set of conditions which permit buyers and sellers to work together.

In a free market, competition takes place among sellers in order to sell their commodities at the best possible price, and among buyers in order to obtain what they want at a price, which suits them. Such competition influences prices. Changes in demand and supply have their effects, and it is not surprising that considerable fluctuations in price can take place over periods of weeks and months.

Since these modern markets are not normally located in any special place, buyers and sellers do not always have to meet face-to-face. They may communicate by letter, by cable, by telephone or through their agents. In a perfect market, such communications are easy, buyers and sellers are numerous and competition is completely unimpeded. In a perfect market there can be only one price for any given commodity: the lowest price which sellers will accept. There are, however, no really perfect markets, because each market is subject to its own peculiar conditions. It can be said, that the price ruling in a market indicates the point where supply and demand meet.

Monopoly is one of peculiar factors which can affect the sale and purchase of certain commodities. In some markets there may be only one seller or a cartel of sellers working very closely together to control prices. The result of such monopolistic activity is to fix prices at a level which may bring him artificially high profits, a level suitable for the seller. Many governments dislike this procedure and have taken legal action to restrict or halt any business activities directed towards “cornering the market”.

TEXT 8

PERFECT COMPETITION

 

In a market operates under the conditions of perfect competition, there will be one, and only one, market price, and this price will be beyond the influence of any one buyer or any one seller. These conditions can only be satisfied in a market which contains certain characteristics. They are:

1. All units of the commodity are homogeneous (i.e. one unit is exactly like another). If this conditions exist, buyers will have no preference for the goods of any particular seller.

2. There must be many buyers and many sellers so that the behavior of any one buyer, or any one seller, has no influence on the market price. Each individual buyer comprises such a small part of total demand and each seller is responsible for such a small part of total supply that any change in their plans will have no influence on the market price.

3. Buyers are assumed to have perfect knowledge of market conditions; they know what prices are being asked for the commodity in every part of the market. Equally sellers are fully aware of the activities of buyers and other sellers.

4. There must be no barriers to the movement of buyers from one seller to another. Since all units of the commodity are identical, buyers will always approach the seller quoting the lowest price.

5. Finally, it is assumed that there are no restrictions on the entry of firms into the market or on their exit from it.

We can now see why, in a perfect market, there will be only one market price which is beyond the control of any one buyer or any one seller. Firms cannot charge different prices because they are selling identical products, each of them is responsible for a tiny part of total supply, and buyers are fully aware of what is happening in the market.

УПРАВЛЯЕМЫЕ САМОСТОЯТЕЛЬНЫЕ РАБОТЫ СТУДЕНТОВ

ПО СПЕЦИАЛЬНОСТИ “МАРКЕТИНГ”

 

У С Р № 2 “ TYPES OF BUSINESS ACTIVITY”