DISABLED PEOPLE

It is our policy that suitably qualified people with a disability should be able to seek and remain in employment with BP. At the end of

1991, we employed 102 people in the UK who were officially registered as disabled, but there were many more who chose not to register. BP's performance in health, safety and environmental (HSE) care continues, rightly, to be of close interest to the public, to governments and to our shareholders. We believe or record is a good one. But more and more is being demanded of companies today and we recognise we cannot simply rest on our past reputation. We are therefore striving to make BP an industry leader in HSE performance. This makes sense not just form a moral standpoint but also as a matter of sound business practice. Today, a good HSE performance is an integral part of efficient and profitable business management. However, for a global company like BP, the aim of being an industry leader in H SE is far from straightforward, because of the differing standards and expectations from country to country. Yet this can also provide an opportunity to secure a competitive edge - for example, by transferring technologies from regions with strict environmental standards to those whose standards are currently less stringent. In order to recognise and promote outstanding HSE performance by our employees, an annual Chairman's HSE Award has been introduced. Employees worldwide are encouraged to submit HSE projects or initiatives that have given something 'extra' to help progress our vision of better employee health, greater safety to people and property, and a cleaner environment. We believe that efforts such as this will help raise awareness in BP of the critical effect that good HSE performance has on the future of the company.

 


Company focus

    11 What does a 'flatter organisation' mean (line 26)? What does it imply in terms of hierarchical relationships, individual responsibility and career development?   2What is Opportunity 2000?   3What is BP's policy regarding: · employees' children? · employees becoming shareholders? · disabled employees? · HSE? What do you think the company gains from these policies?   4How does BP's policy towards its employees differ from that of companies in which you have worked? Do you think you would enjoy working for a company like BP

 


 

 

PART II

Marketing

 

 


UNIT 4

The Marketing Mix

Section I

The four Ps

4.I.A Warm-up   A recent purchase   In pairs, discuss with your partner a recent purchase you made. What was the product, where did you buy it, how much did it cost and what influenced you in your choice of what to buy and where to buy it?  
4.I.B Reading   The Marketing Mix   Read the following passage then work on exercise 4.1.C.   The marketing mix is a blend of four components: product, price, promotion and place. By manipulating these components (often referred to as the four Ps) a marketer can best respond to the needs of customers and thus maximise sales.   Product Determining consumers' needs and wants and then translating them into desirable products is a marketer's first task. There are many ways to classify products, the most basic distinction being between goods and services. Another distinction is between consumer and industrial items, the markets and purchasing patterns being very different in each case. Consumer products are divided into three subgroups with different marketing tools needed for each: · Convenience goods and services are products which are readily available, low priced and heavily advertised, and which are purchased quickly and often. · Shopping goods and services are purchases for which a consumer spends a lot of time shopping in order to compare prices, quality and style. Personal selling by the retailer is often a key factor in the purchase, particularly if the product is relatively complicated. · Speciality goods and services are products that a consumer will make a special effort to locate.   As far as industrial products are concerned, two broad categories can be identified:   · Expense items are relatively inexpensive industrial products that are consumed within a year of their purchase. · Capital items are relatively expensive industrial products that have a long life and are used in the operations of the business. Selecting capital items is often a long process and personal selling is often a key element in the purchasing decision.

 


The four Ps

  Price Once a company has developed a product it has to decide how to price it. This is a tricky decision and the stake/ can be high. Before deciding on its pricing method the company has to define its objectives. Some of the most common are: · to achieve a certain overall profit target · to increase sales · to get a, bigger share of the market · to achieve high profits on a particular product · to discourage competition · to promote a particular product image · to accomplish social or ethical goals.   Promotion Promotion is persuasive communication that motivates people to buy a company's products. It may take the form of advertising, personal selling, publicity, sales promotion, reseller support or a combination of these activities. · Advertising is any paid form of impersonal presentation of goods, service or ideas using a mass communication medium. · Personal selling is the use of person-to-person communication to assist or persuade a prospect to buy, and is used especially when the number of buyers is limited and the product is expensive and complicated. A good salesperson must have an intimate knowledge of the product and strategic understanding of the buyer. · Publicity is unpaid media coverage of news about an organisation, its personnel or its products, Publicity may, of course, be positive or negative. Positive publicity may generate far more sales than pages of paid advertising. · Sales promotion is a direct inducement that motivates someone to purchase a product. It covers a wide variety of activities such as exhibiting at trade shows, displaying material at a retail location, and giving away coupons that offer a discount. · Reseller support refers to incentives given to wholesalers and retailers.   Place There are many ways that products can be distributed to customers. The channel of distribution may include wholesalers, who sell products to other firms for resale or for industrial use, and retailers, who sell directly to the public. Here are a few examples of retail outlets:   · department stores: large stores that carry a wide variety of high-quality merchandise · speciality stores: shops carrying only particular types of goods such as children's clothing · supermarkets: large departmentalised stores specialising mainly in food and household products · mail order firms: companies selling products through catalogues and shipping them directly to customers by mail · open-air markets, kiosks, trade shows, auctions.

Part II Marketing Unit 4 The Marketing Mix

4.I.C Discussion   The four Ps   I Make a copy of the grid below and place the following products:  
• a washing machine • toothpaste • an accountant • paper clips • a dry cleaner • small components • a Savile Row suit • razor blades • a hairdresser • Chanel perfume • a truck • a medical specialist • a robot • a bed • a meal at Maxime's in Paris • an interior decorator • janitorial services • a Breitling watch

 

 

 

convenience goods convenience services
   
shopping goods shopping services
   
speciality goods speciality services
   
expense items capital items
   

 

  2 In small groups, find other examples of products and place them in the above grid. Discuss three or four of the products, giving a description of the product, how it is packaged, where you can buy it, who buys it, how much it costs, what influences the buyer in his or her choice, etc. 3 Give an example of how personal selling has influenced a purchasing decision you have made.

 


The four Ps

  4 Decide which form of promotion describes each of the activities in the grid below. Make a copy of the grid and fill it in by placing a / in the appropriate boxes. Forms of promotion include:   • positive publicity • negative publicity • sales promotion • reseller support.

 

    Positive publicity Negative publicity Sales promotion Reseller support
a A newspaper article about our company's mineral water being polluted        
b   A free display rack given to all supermarkets which display our products        
c A holiday for two for the winner of our "Wholesaler of the Year" competition        
d Local radio coverage of a sports event we organised        
e Free samples of our new product given to people in the street        

 

  Can you think of any other examples of these forms of promotion?   5 Decide where you would go (either in your home country or abroad) to buy the following: · white goods (fridge, freezer, hairdrier, etc) · brown goods (hi-fi, television, radio, etc) e fruit and vegetables · e clothes · shoes · a new car · beauty products (make-up, perfume, after-shave lotion, etc) · stationery (pens, paper, felt-tips, staples, etc) · a can of soft drink.   6 Choose one retail outlet that you know well and discuss: · its location · the quality of its service · its products · other information of interest.

 


Part II Marketing Unit 4 The Marketing Mix

4.I.D Vocabulary   Defining key terms   Match the following key terms with their definitions:   Terms:
1market segments 2target markets 3disposable personal income 4product mix 5brand 6generic products 7trademark 8market share 9stock turnover 10publicity 11trade show 12point-of-purchase display 13couponing 14wholesalers 15retailers 16warehouse
  Definitions
  aAny name, sign or symbol used to identify the products of a firm. bProducts that bear only the name of the item, not of its producer, and which are sold at lower than normal prices. cProportion of the market controlled by a specific company or product. dFacility for storing stocks of supplies or finished products. eDistribution of certificates that entitle buyers to a discount on a particular item. fBrand that has been given legal protection so that its owner has exclusive rights to its use. gIndustry gathering in which producers set up displays and demonstrate products to potential customers. hMoney that a family has to spend after paying taxes. iAdvertising or display materials set up at a retail location to encourage sales of an item. jFirms that sell directly to the public. kGroups of individuals or organisations within a market that share certain common characteristics. lSpecific groups of customers to whom a company wants to sell a particular product. mUnpaid media coverage of news about an organization. nFirms that sell products to other firms for resale or for industrial use. oNumber of times that average inventory is sold during a given period. pComplete list of all products that a company offers for sale.


The four Ps

4.I.E Project   Developing a Marketing Mix   In small groups, choose three products with which you are familiar and develop a Marketing Mix for each of them. Make a copy of the grid below and fill it in. Give as much relevant information as possible regarding each element of the Marketing Mix.

 

  A convenience good or service A speciality good or service A capital item
Product      
Price      
Promotion      
Place      

 


Part II Marketing Unit 4 The Marketing Mix


Section 2

Interpreting marketing information

4.2.A Analysis   Interpreting graphs   In small groups, study and discuss the following charts and graphs (Figures 7 to 9). Describe and analyse each one separately, then analyse any relationship between them.

 

Figure 7:

Shampoo products – market share 1991/92

 

 

Figure 8:

Silky Soft Shampoo - promotion budget (worldwide)

 

 

 

Figure 9:

Silky Soft Shampoo – sales

 

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996


Interpreting marketing information

4.2.B Word choice   Quantities and trends   I Look again at Figures 7 to 9. Fill in the blanks in the following sentences. When you have finished, read them aloud.   1 Silky Soft's market share dropped 25.73% 23.40% 2 Curly Locks an almost 2-point . 3 Extra's market share remained . 4 Vo-gel a substantial increase in market share. 5 Wild Girl's market share dropped . 6 Yves Richard the market and 5.26% of the market. 7 KP's market share rose one percent- age point. 8 Between 1987 and 1990, Silky Soft's advertising budget decreased but in 1991 it rose to $400,000. 9 A of Silky Soft's promotion budget in 1992 was spent on samples. 10 There was a wild in the budget for samples between 1989 and 1992. 11 Silky Soft's European Sales were $4 million in 1986.   2 Discuss sales of Silky Soft Shampoo (Figure 9) again, using the following terms:   Example  
Silky Soft's European sales reached their highest point in 1989.
upward trend moved upwards reached; amounted to; attained growth; rise; upturn; upsurge apex; zenith; highest point downward trend moved downwards declined; decreased; dwindled; fell; dropped; went down; slumped; plumetted; collapsed; slid; slipped
levelling off; turnaround steeply; sharply; dramatically gradually; slowly; steadily
launch; start up maturity shelf life forecast

 

 


Part II Marketing Unit 4 The Marketing Mix

4.2.C Functions   Asking for and giving (or withholding) information   In pairs, use the following expressions to ask for and give (or withhold) information regarding the market for shampoo products and Silky Soft's promotion budget and sales. Example
A. 'I wonder if you could tell me whether the 1992 advertising budget was up or down on the previous year.' B. 'Yes, I've got the figures right in front of me. Advertising expenditure in 1992 was $380,000, down from $405,000 in 1991.’
Asking for information I wonder if you could tell me ... I'd like to know ... Could you let me have ... Could you tell me ... I'd like some information about ... Giving (or withholding) information Yes, I've got the figures right in front of me ... Sure, I'll just look that up for you ... According to my records ... I'm afraid this is classified information. I'm sorry but I don't have that information available.

 

Section 3

Negotiation

 

4.3.A Functions   Negotiating   Negotiating involves a number of language functions such as making proposals, inviting concessions and asking for clarification. Make a copy of the grid on page 55 and place the following sentences in the boxes (two sentences per box).   1 I'm sorry, I didn't catch what you said. 2 I suggest that we fix the price at 870 deutchmarks per dozen. 3 I have no doubt that our customers will appreciate this product. 4 I can't go along with you/that. 5 If I were you I would take note of what your competitors are doing. 6 In return, we would hope that you extend the warranty to 3 years. 7 We were given to understand that labour charges were covered by the warranty. 8 That wouldn't be acceptable, I'm afraid. 9 That seems reasonable, I suppose. 10 What do you say we work on the basis of a 90 day payment period? 11 I'm afraid I'm not quite with you. 12 Have you thought of the advantages of leasing?

 


Negotiating

    13 I'd like some more details about your system of discounts. 14 I think we could go along with that. 15 I really feel that the packaging is too bright. 16 If we did accept, we would expect you to reciprocate by doubling the size of your order. 17 Could you tell me some more about your after-sales service? 18 In other words, I'm unable to improve upon my last offer. 19 I'm rather surprised to see that transport costs are not included in the price. 20 What I mean is that I'm not empowered to make that kind of decision.

 

Making proposals and counter-proposals Reformulating information
   
Expressing opinions Inviting a concession
   
Disagreeing Asking for clarification
   
Querying Asking for further information
   
Offering advice Agreeing
   

 


Part II Marketing Unit 4 The Marketing Mix

4.3.B Role play   Negotiation warm-up   Work in pairs. Agree upon a product (preferably an expense item, a capital item or a good for resale) and then prepare and carry out a very short negotiation based upon the following plan. Make full use of the expressions in exercise 4.3.A but do not allow yourself to be limited by them. Here are some examples of variables you may wish to negotiate.  
higher discounts cash payment larger order free delivery more favourable terms of payment annual loyalty rebate shorter guarantee longer guarantee buyback/sale or return arrangement

 

Seller   Buyer
Make a proposal     Invite a concession     Ask for clarification   Invite a concession   Reformulate information   Close the deal Disagree and make a counter proposal   Express an opinion Make a new proposal   Reformulate information   Query   Agree

 

Example:

 

Seller   Buyer
What do you say we fix the price at £10 a case for a minimum of 12 dozen cases?     I can’t go along with that, I’m afraid. I suggested we work on the basis of £9,60.

 

Change roles so that the buyer becomes the seller and vice versa. Choose a different product and carry out a negotiation following the above plan.

 


Negotiating

4.3.C Role play   Negotiating a sale   Read the following information and then carry out the role play which follows.   Excalibur is an industrial robot produced by Axetti, a Franco-Italian engineering consortium. Rivalling the Japanese giants on price and performance, Excalibur has begun to carve a niche for itself in Europe's increasingly robotised manufacturing industries. Its main successes have been with small and medium-sized plants in two principal sectors: precision engineering and moulded plastics. British manufacturers, however, have been slow to invest and Axetti is desperately hoping to gain a foothold in Britain and build up a strong brand image before the Japanese monopolise the market. The company is also working on two new powerful models which are due to be launched within the next 18 months. The engineering trade fair in Geneva last autumn was a good opportunity for Europe's industrialists to see Excalibur in action. One interested visitor was James Howell, Production Manager with an up-and-coming precision-tool manufacturer based in Coventry, England. On his return to Coventry Mr Howell spoke to his Managing Director, Pat Symes, about the need to invest in the most up-to-date technology if their company was to survive in a fiercely competitive environment. Ms Symes did not need convincing. She had been looking closely at the rise of her new South-East Asian competitors with dismay and she also knew that Coventry's post-war economic downfall was mainly due to lack of investment. While Keil and Yokohama were modernising their plants in the fifties and sixties, Coventry sat back and watched. Ms Symes was determined not to make the same mistake as her father whose company went bankrupt while she was a teenager. Mr Howell and Ms Symes flew out to Milan the following week to have a closer look at some of the ways Excalibur could be programmed to perform the various tasks needed for the production of precision tools. They also spent two afternoons with Axetti's Sales Director discussing prices, maintenance, training facilities and so on. Three weeks later Ms Symes faxed a message to Axetti asking them to draw up a quotation for the purchase of four Excalibur industrial robots. Full robotisation of the Coventry plant would require 26 robots but Ms Symes felt it safer to restructure the production operations in stages. This is a summary of the quotation drawn up by Axetti.

Figure 10:

Axetti's quotation

  Quantity Delivery date Terms of payment Training Warranty QUOTATION £148,000 4 Excalibur robots® £37,000 6 months after receipt of order 20% of invoice amount on ordering 30% of invoice amount on receipt of order 50% of invoice amount within 90 days of receipt of order 4 day training programme for 10 robot operators and maintenance personnel on Axetti premises in Milan (accommodation and meals included) £18,000 Axetti undertakes to repair any faulty component for a period of 12 months from receipt of order. Labour costs and cost of components will be met by Axetti provided that the damage is not due to negligence or accident.

 


Part II Marketing Unit 4 The Marketing Mix

  In pairs, read the role cards that have been assigned to you and negotiate an agreement that gives you the best possible deal.   Remember a negotiation differs from a simple sale insofar as a negotiation often involves several variables, for example:  
· price · discounts · delivery date · delivery point · guarantee provision · sale or return arrangement
  • length of guarantee
  • training facilities
  • after-sales service
  • supply of spare parts
  • buy-back arrangement
  A skilful negotiator will:  
  • Try and obtain his or her opponent’s list of variables before the negotiation begins.
  • Keep in mind all the variable at all times.
  • Not be afraid of introducing new variables whenever necessary. Everything is negotiable!
  • Trade off one variable against another. A skilful negotiator will never donate a concession but will ‘trade concession’ so that something conceded is matched by something gained.
  • Aim high but be prepared to compromise. If you do not aim high at the beginning you cannot raise the stakes later on.
 

 

Axetti's role card   Your robots are just right for Pat Symes's company. She knows this and she also knows that you know this. You will therefore have a psychological advantage at the forthcoming negotiation. On the other hand Ms Symes must know how much you want to enter the British market. In some ways the Coventry plant will be you showroom in Britain and a prominent customer will provide a good springboard for your new products. Axetti has recently developed a leasing arrangement whereby customers can hire robots with an option to buy. You have not yet mentioned this to Ms Symes as you would prefer to make a cash sale at this stage. Do not be afraid of introducing new variables into the negotiation. Remember to try and obtain Ms Symes's list of variables before the negotiation begins. She is going to negotiate hard so try and find ways of obtaining concessions in exchange for those you give.

 


Negotiating

4.3.D Vocabulary   Verbs and nouns in context   I Fill in the blanks in the following paragraph using verbs from the list below, and conjugating them where necessary.  
accomplish quote place break into carve infringe promote launch reap strike

 

We wanted to 1 the SE Asian market by a 2 new product, 3 a strong brand image, and 4 a niche for ourselves before our competitors arrived. In order to 5 our goals, we 6 a deal with a Korean importer who agreed to the price we had 7 and 8 an immediate order for 10,000 units. If we can extend our activities to some of the neighbouring countries, we should be able to 9 huge benefits, but we will have to be careful if we are to avoid 10 import regulations.

 

2 Find the nouns which correspond to the following verbs.