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ALTERNATIVES FOR INTERNATIONAL OPERATIONS
Once a company has decided to enter the international marketplace, it must select a means of entry. The option chosen depends on its willingness and ability to commit financial, physical, and managerial resources. Host countries not only seek the benefits of additional products available for sale but are often even more interested in the number of good jobs available for local workers. Let’s consider the alternatives for international operations.
Exporting is producing goods in one country and selling them in another country. This entry option allows a company to make the least number of changes in terms of its product, its organization, and even its corporate goals. Host countries usually do not like this practice, because it provides less local employment than under alternative means of entry.
Indirect exporting is when a firm sells its domestically produced goods in a foreign country through an intermediary. It involves the least amount of commitment and risk, but will probably return the least profit. The kind of exporting is ideal for the company that has no overseas contacts but wants to market abroad. The intermediary is often a broker or agent that has the international marketing know-how and the resources necessary for the effort to succeed.
Direct exporting is when a firm sells its domestically produced goods in a foreign country without intermediaries. Most companies become involved in direct exporting when they believe their volume of sales will be sufficiently large and easy to obtain that they do not require intermediaries. For example, the exporter may be approached by foreign buyers that are willing to contract for a large volume of purchases. Direct exporting involves more risk than indirect exporting for the company, but also opens the door to increased profits.
Under licensing a company offers the right to a trademark, patent, trade secret, or other similarly valued items of intellectual property, in return for a loyalty or a fee. In international marketing the advantages to the company granting the license are low risk and a capital-free entry into a foreign country. The licensee gains information that allows it to start with a competitive advantage, and the foreign country gains employment by having the product manufactured locally.
When a foreign company and local firm invest together to create a local business, it is called a joint venture. These two companies share ownership, control, and profits of the new company. The advantages of this option are twofold. First, one company may not have the necessary financial, physical, or managerial resources to enter a foreign market alone. The disadvantages arise when two companies disagree about policies or courses of action for their joint venture.
The biggest commitment a company can make when entering the international market is direct ownership, which entails a domestic firm actually investing in and owning a foreign subsidiary or division. The advantages to direct ownership include cost savings, better understanding of local market conditions, and fewer local restrictions. Firms entering foreign markets using direct ownership believe that those advantages outweigh the financial commitments and risks involved.
1. What does the option of a means of entry to the international market depend on?
2. What is exporting?
3. What is licensing?
4. What is joint venture?
Ex. 8. Explain, in your own words, the following terms.
needs, wants, prospective customer, wholesaler, retailer, things of value, resale, buying decision, basic necessities, ultimate consumer, target market, controllable factors, tangible items, intangible items, inventory, idle production capacity.
Ex. 9. Logically organize the following sentences to make up the text. The first sentence is given to you.
1. A basic decision in marketing products is branding.
2. Some brand names can be spoken, such as a Big Mac hamburger.
3. The Campbell Soup Company is the trade name of that firm.
4. In branding an organization uses a name, phrase, design, symbols, or combination of these.
5. A trademark identifies that a firm has legally registered its brand name or trade name
6. Other brand names cannot be spoken, such as the rainbow-coloured apple (the logotype or logo)that Apple Computer puts on its machines and in its ads.
7. A brand name is any word, “device” (design, sound, shape, or colour), or combinations of these used to distinguish a seller’s goods or services.
8. A trade name is a commercial, legal name under which a company does business.
9. It helps to identify its products and distinguish them from those of competitors.
10. So the firm has an exclusive use, thereby preventing others from using it.
What title would you give to the text?
Ex. 10. Fill in the gaps with the missing words.
Category, research, marketer, services, process, utility, exchange, profit, information, cycle, concept, marketing, advertising, goods, advertiser, extension, effectiveness
Marketing is the … companies use to make a … by satisfying their customers' needs for products. A more complicated … at the core of marketing is the perceived equal-value …, which implies three phases in the marketing-exchange … : finding out who customers are and what they want; interpreting this … for management in order to shape products; and devising strategies to inform customers about the product's … and to make it available to them. Advertising is concerned with the third step in the … process. It is one of several tools that … can use to inform, persuade, and remind groups of customers, or markets, about their … and … . Its … depends on the communication skill of the … person. It is also effective only to the extent that other marketing activities, such as market …, are correctly implemented.
There are three … of participants in the marketing process: customers, markets, and marketers. To reach customers and markets, … use the marketing communication process, which is an … of the human communication process.
Ex. 11. Join the halves.
1.In the past, each of the countries of the European Union
2.These differences made it difficult and expensive
3.Now, these countries are abandoning old political
4.It helps to reduce taxes and other barriers
5.This unification has eliminated over 300
6.Trucks loaded with products spill
7. The increased efficiency is reducing costs and
8.These changes make Europe that largest unified market
9.By the year 2010 the EU may expand to include at
10.These changes have dramatically altered opportunities available to marketing
11.The international competition fostered by the unification of Europe has also provided
1.across the European continent and Britain.
2.creating millions of new jobs.
3. impetus for the US, Mexico, and Canada to develop more cooperative trade agreements.
4. managers both in Europe and in other parts of the world.
5. had its own trade rules and regulations.
6. to move products from one country to the others.
7..squabbles and nationalistic prejudices in favour of cooperative efforts.
8. separate barriers to inter- European trade.
9.commonly applied at national boundaries.
10. least 25 countries and 450 million people.
11.in the world, and more changes are coming.
Read the sentences once again. Do you see that you have written the text? What is it about? What title would you offer?
Ex.12. Make up the sentences. Put them down into your notebook. The beginning of each sentence is given to you.
Marketing,practices, inappropriate, sometimes, actions, that, produce consumers, find.If,become, upset, actions, enough, specific, with, consumers, sufficiently, they, action, demand, will, regulatory, local, at, or, level, federal, the, state. A social, sellers, movement, with, of, the, that, purpose, to, of, relative, enhancing, buyers, the, of, power, consumerism, termed, is.
Such,products, movements, or, generally, boycotts, produce, firms, some, of. A common,activities, objective, marketing, of, the, is, consumerism, regulation, of. The current, 1960s, began, consumerism, early, the, in. The consumenrism, group, is, a, movemrnt, political,well-organized, not. Rather, consumers, refers, state-of-mind, more, many, a, to, in.
Ex. 13. Give Russian equivalents to the following.
Encounter difficulties; to do international marketing; exploit a better business opportunity; with little room for growth; demand may shift t a newer product; to return to other markets; the dimensions being evaluated; offer investment incentives; to compete fairly in the domestic markets; protect themselves against; duties are imposed; quotas are revised; a means of entry; the option chosen; domestically produced goods; do not require intermediaries; contract for a large volume of purchases; under licensing; the right to a trademark; in return for a loyalty or a fee; capital-free entry; the product manufactured locally; the advantages are twofold; dumping prices; bribery; reduce red tape.
Ex.14. Render the following into English.
1.Marketing – процесс выяснения и удовлетворения потребностей.
2.Buyer’s behaviour – процесс принятия покупателем решения о том, какой продукт покупать и у кого. Процесс состоит из пяти последовательных этапов: осознание проблемы, поиск информации, оценка информации, решение о покупке, оценка после покупки.
3.Market segmentation – процесс разделения рынка на субрынки, каждый из которых образован группой потребителей в чем-то похожих друг на друга, например, уровнем образования, возрастом.
4.Marketing mix – маркетинговый комплекс, состоящий из продукта, системы его распространения, рекламы и цены, который фирма использует для обслуживания потребителей на его целевом рынке.
5.Target market – особая группа потребителей, чьи потребности собирается удовлетворять предприятие.
6.Branding – использование дизайна, символа, имени или их комплекса для идентификации продукта, что дает производителю ряд преимуществ.
7.Consumer goods – товары, покупаемые для непосредственного удовлетворения потребностей покупателя.
8.Distribution channel – цепь фирм, которые участвуют в покупке и продаже товаров по мере их продвижения от производителя к пользователю.
9.Durable goods – товары, срок потребления которых превышает один год.
10.Positioning – процесс подгонки имиджа товара потребностям его целевого рынка.
11.Product life cycle – период, в течение которого продукт последовательно проходит через стадии зарождения, роста, зрелости и упадка.
12.Publicity – общественное мнение о компании или ее продукте.
13.Trademark – символ или наименование сорта, которые защищены законодательно.
Ex.15. Translate into English.
1.Маркетинг тесно связан с такими социальными науками, как экономика, социология, психология. 2. Маркетинг изучает людей в социальном контексте. 3. Маркетинг – это система научных и практических взглядов, направленных на изучение и управление рыночными отношениями. 4. Цель маркетинга – определить нужды т потребности своих будущих потребителей. 5. Четыре основных управляемых фактора маркетинга – это товары, цена, размещение и продвижение. 6. Потребитель не может отделить услугу от ее поставщика. 7. Внешние рынки могут предоставить больше возможностей для роста компании. 8. Одна из сложностей – это оценка политических и правовых условий в стране. 9. Каждая страна Европейского Союза имела свои торговые правила и положения. 10. Объединение устранило свыше 300 отдельных торговых барьеров. 11. Международный маркетинг – это маркетинг товаров и услуг за пределами страны, где находится организация. 12. Специалисты по международному маркетингу должны учитывать культурную среду каждого рынка.
Tax – налог
Charge –сбор, плата
corvee labor – тяжелая подневольная работа
direct tax – прямой налог
indirect tax – косвенный налог
redistribution – перераспределение
repricing – переоценка
representation – репрезентация
authorities - власти
1. A tax (also known as a “duty”) is a financial charge or other levy imposed on an individual or a legal entity by a slate or a functional equivalent of a state (e.g. tribes, secessionist movements, or revolutionary movements). Taxes could also be imposed by a sub national entity.
2. Taxes may be paid in money or as corvee labor. In modern, capitalist taxation systems, taxes are levied in money, but in-kind and corvee taxation is characteristic of traditional or pre-capitalist states and their functional equivalents.
3. Taxes are sometimes referred to as direct tax or indirect tax. Direct taxes are collected by the government from the income of individuals and businesses. Indirect taxes are levied on the production or sale of goods and services. They are included in the price paid by the final purchaser.
4. An important feature of tax systems is whether they are proportional tax (the tax as a percentage of income is constant over all income levels), progressive tax (the tax as a percentage of income rises as income rises), or regressive tax (the tax as a percentage of income falls as income rises). Progressive taxes reduce the tax incidence of people with smaller incomes, as they shift the incidence disproportionately to those with higher incomes.
5. Taxation has four main purposes or effects: revenue, redistribution, repricing, and representation.
The main purpose is revenue: taxes provide the public authorities with the revenue required for meeting the costs of defense, social services, interest payment on the national debt, municipal services, etc. This is the most widely known function.
A second is redistribution. Normally, this means transferring wealth from the richest sections of society to poorer sections, and this function is widely accepted in most democracies, although the extent to which this should happen is always controversial.
A third purpose of taxation is repricing. Taxes are levied to address externalities: tobacco is taxed, for example, to discourage smoking, and many people advocate policies such as implementing a carbon tax as a way of tackling global warming,
A fourth, consequential effect of taxation in its historical setting has been representation. The American revolutionary slogan “no taxation without representation’' implied this: rulers tax citizens, and citizens demand accountability from their rulers as the other part of this bargain. Several studies have shown that direct taxation (such as income taxes) generates the greatest degree of accountability and better governance, while indirect taxation tends to have smaller effects.
6. Funds provided by taxation have been used by stales and their functional equivalents throughout history to carry out many functions. Some of these include expenditures on war, the enforcement of law and public order, protection of property, economic infrastructure (roads, legal tender, enforcement of contracts, etc.), public works, social engineering, and the operation of government itself. Most modern governments also use taxes to fund welfare and public services. These services can include education systems, health care systems, pensions for the elderly, unemployment benefits, and public transportation. Energy, water and waste management systems are also common public utilities. Colonial anti modeming states have also used cash taxes to draw or force reluctant subsistence producers into cash economies.
7. Governments use different kinds of taxes and vary the tax rates. This is done to distribute the tax burden among individuals or classes of the population involved in taxable activities, such as business, or to redistribute resources between individuals or classes in the population. Historically, the nobility were supported by taxes on the poor; modern social
security systems are intended to support the poor, the disabled, or the retired by taxes on those who are still working. In addition, taxes are applied to fund foreign and military aid, to influence the macroeconomic performance of the economy (the government's strategy for doing this is called its fiscal policy, or to modify patterns of consumption or employment within an economy, by making some classes of transaction more or less attractive.
1. Some economists, especially neo-classical economists, argue that all taxation creates market distortion and results in economic inefficiency. They have therefore sought to identify the kind of tax system that would minimize this distortion. Also, one of every government's most fundamental duties is to administer possession and use of land in the geographic area over which it is sovereign, and it is considered economically efficient for government to recover for public purposes the additional value it creates by providing this unique service.
Since governments also resolve commercial disputes, especially in countries with common law, similar arguments are sometimes used to justify a sales tax or value added tax. Others (e.g. libertarians) argue that most or all forms of taxes are immoral due to their involuntary (and therefore eventually coercive/violent) nature. The most extreme anti-tax view is anarcho-capitalism, in which the provision of all social services should be a matter of voluntary private contracts.
1. A tax is a financial ... imposed on an individual or a legal entity by a state.
2. Taxes may be paid in money or as a ... labor.
3. Indirect taxes are ... on the production or sale of goods and services.
4. Progressive taxes reduce the Lax ... of people with smaller incomes.
5. Taxation has four main purposes or effects: revenue, redistribution,... and representation.
6. Most modern governments use taxes to fund ... and public services.
7. Governments use different kinds of taxes and vary the lax ....
8. Some economists argue that taxation results in economic ... .
Which of the following do you think is true or false? Use the expressions given below:
I quite agree that...
Of course, it is true...
Certainly it is... Absolutely/precise...
1. A tax is a financial charge imposed by a state.
2. Taxes are always paid as a corvee labor.
3. Indirect taxes are collected by the government from the income of individuals and businesses.
4. Progressive taxes reduce the lax incidence of people with smaller incomes.
5. The most widely known function of taxation is repricing.
6. Funds provided by taxation are used on expenditures on war, the enforcement of law and public order, economic infrastructure, etc.
7. Governments vary the tax rates to distribute the tax burden among individuals or classes.
8. Some economists don’t consider taxation efficient.
Are the following statements true or false?
1. The tax return calculates the amount of tax you must pay.
2. All taxpayers fill in tax returns.
3. Englishmen should wait for HMRC to send them a tax return.
4. 31 January is the end of the tax year in England.
5. There may be penalties for not completing a return.
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