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XV. Act as an interpreter for A and B
A:
I know that you are a specialist in marketing and I think, you can answer my questions.
B:
Я із задоволенням відповім на них.
A:
In what way can marketing efforts be measured?
B:
Маркетингові заходи можна вимірювати якісними та кількісними показниками.
A:
What can you say about marketing planning?
B:
Планування маркетингу є невід’ємною складовою загальної системи маркетингових заходів.
A:
I see. But what does effective marketing planning depend on?
B:
Воно залежить від ретельного вивчення факторів зовнішнього середовища. Аналізуючи ситуацію, необхідно враховувати всі контрольовані та неконтрольовані фактори, тобто всі фактори, пов’язані із зовнішнім середовищем. Існує тісний зв’язок між факторами зовнішнього середовища та збутом.
A:
What controllable factors in marketing planning do you know?
B:
Їх фактично чотири — 4 Р. Це продукція, ціна, місце збуту та форми реклами.
A:
What kind of analysis is carried out by the marketing department?
B:
Відділ маркетингу проводить ретельний загальний аналіз. Це аналіз ситуації на ринку, аналіз збуту, різних даних, аналіз попиту споживачів та їх культурних потреб.
A:
Thank you. You have been very helpful.
XVI. Look through the text and answer the questions given below.
HEWLETT-PACKARD:
STRATEGIES FOR LEADERSHIP
Hewlett-Packard Company is in one of the most dynamic periods of its forty-four-year history. It is a time of change in the needs of customers, in the technologies available to meet those needs, and in the size and shape of HP itself.
When a company changes as rapidly as HP, there is a possibility of it growing apart, of its product lines and operations diverging. For HP, the opposite is true. Its organization and products have become better integrated to shape and support the company’s purpose.
Although HP’s 6.400 products serve many different markets, their common purpose is to provide customers with the information needed to solve technical and business problems. HP’s strength lies not only in its wide spectrum of products, but also in its ability to merge technologies to provide comprehensive solutions to a variety of specific problems. HP products are information tools in a three-tiered strategy.
Tie One
HP is containing a strategy that has served it well over the years; offering products that represent state-of-the-art technology and that are useful on a stand-alone basis. Each product is a tool that provides information to help solve a problem, such as the measurement of an electronic function, the analysis of a chemical compound, the monitoring of a vital life sign, or the computation, analysis, display or transmission of data.
Tie Two
Joining individual products to create systems is a second way HP is making information an effective decision making tool. Increasingly, HP is designing its products as modules that can interact with other HP equipment or with products of other vendors. HP’s systems may consists of test and measurement instruments, data-processing equipment, instrumentation for chemical analysis or medical monitoring, or combinations of these product groups.
Tier Three
The third tier of HP’s strategy is to provide software packages that further integrate HP equipment in order to solve customer problems, productivity networks is the term HP used to describe its integrated software packages. Just as a system represents linked equipment, productivity networks represent software programs that are linked to provide total business solutions.
Some of these networks are designed to meet the needs of a wide variety of customers. For example, HP’s Information Productivity Network allows any organization to effectively use word processing, data base management and electronic mail. Other productivity networks serve specific kinds of organizations such as manufacturers, retail trade and distribution industries, laboratories, hospitals and educational and financial institutions.
Source: Hewlett-Packard Company Annual Report, pp.5.7.
Questions
What is Hewlett-Packard’s mission? How does this mission influence the firm’s marketing strategy?
Evaluate Hewlett-Packard’s three-tiered strategy. Could the three tiers be set up as strategic business units?
XVII. Case Study.
MAYTAG CORPORATION:
EXPANDING THE APPLIANCE PORTFOLIO
«01 Lonely,» the famous Maytag Company repairman, may not have enough to do, but his employer’s parent, Maytag Corporation, has been quite busy. Always one of the most profitable firms in an industry dominated by giant companies, Maytag often earns a higher return on stockholder’s equity (for example, 30 percent in 1997) than any other company in its industry. For the five-year period from 1993 to 1997, Maytag’s sales grew at an annual rate of over 5 percent while its net income grew at almost 9 percent. Maytag achieved record sales of $ 1,9 billion in 1997. Facing 2000, Maytag is acquiring new product lines and adjusting its portfolio in response to a changing environment.
Traditionally, Maytag has been a limited-line appliance manufacturer, and it has always marketed its washers, dryers, and dishwashers under a family name. Its strategy has simply been to make the best products and charge accordingly: thus, the company slogan—»Built to Last Longer.» Maytag’s products generally cost more than competitors’ machines—roughly $ 100 more on average. With its reputation for making trouble-free appliances, Maytag has always targeted the upscale end of the market. In addition, by offering premium-priced products, Maytag has typically catered to second-time buyers. This replacement market slowed in the late 1980s but was strong again starting in 1992—1993: Even Maytag’s appliances wear out—typically after 10 to 12 years. Maytag shies away from the cyclical home-builders segment—tough negotiators who, in the past, wanted well-known brands at low prices, and the new-household segment—always price-conscious because of the multitude of products they need to buy in a relatively short time period. Since the early 1990s, however, changing conditions in the appliance market have made Maytag consider whether it should change its traditional high-quality, high-priced targeting strategy.
Consumers and retailers have long regarded Maytag’s laundry appliances as top-of-the-line. But the premium-quality niche for laundry and kitchen appliances targeted by both Maytag and competitor KitchenAid (long the market leader in the high-quality, high-price segment) may be eroding. While there is no solid evidence of this trend, there is an increasingly frequent feeling in the trade and among consumers that although the quality difference between high-priced and medium-priced laundry and kitchen appliances is becoming smaller, the price difference is becoming larger.
Competition, always a major factor in the appliance industry, has become even keener in recent years. A recent wave of mergers and acquisitions has dramatically changed the structure of the industry, with a few large full-line companies now producing most of the output. For example, Whirlpool, the biggest washer maker, increased its share to nearly 50 percent when it acquired KitchenAid dishwashers from Dart & Kraft.
Other trends are also reshaping the industry. First, a significant portion of each large company’s output is supplied to other companies for sale under its own brand names. For example, White Consolidated Industries manufactures dryers for General Electric, Montgomery Ward, and Sears. Second, heavy investments in factory automation are being made by two of the largest appliance manufacturers, General Electric and Whirlpool, to bring down costs and increase competitiveness. Meanwhile, already low-cost producers, such as White Consolidated Industries, continue to drive for lower costs through more efficient operations. Third, appliance companies have intensified their marketing efforts, with greater emphasis being placed on quick sales stimulants such as factory rebates, special factory-authorized sales, and additional incentives for consumers, dealers, and salespeople. Finally, foreign competition now poses a serious threat.
In response to these changing market conditions, cash-rich Maytag has made several acquisitions, gambling that some of its success in washers, dryers, and dishwashers will rub off on products other than those with which it has been traditionally associated. First came the 1991 acquisition of Hardwick Stove Company — a 105-year-old manufacturer of gas and electric ranges and microwave ovens. These products are sold through conventional outlets in the medium- and low-price brackets. The following year, Maytag acquired Jenn-Aire Company, known for its down-draft grill range. The range permits year-round indoor grilling by sucking fumes into a surface ventilation system that keeps them out of the house. In 1996, Magic Chef, Inc., the appliance industry’s fourth largest firm, joined the Maytag portfolio. With this acquisition came a variety of products, including Magic Chef cooking equipment, Admiral refrigerators, Norge laundry equipment, and other appliances such as microwave ovens. The new product lines overlapped with Maytag’s kitchen ranges, washers, and dryers.
The cooking equipment market differs markedly from the washer and dryer business. The industry is fragmented, with no brand clearly recognized as a premium product. Commenting on the recent acquisitions, Maytag Corporation’s president explained that although «cooking equipment is a mature market, it is an exciting one because product innovation is changing the traditional way people cook and broadening sales opportunities.»
For example, the microwave oven industry is a relatively new area of the cooking equipment market, and the product is now one of the hottest items in the appliance business. Microwave ovens first caught on in the 1950s, but their growth was slow until the early 1970s. At that time, microwaves had several problems. Cooking was uneven, meats would not brown, foil-wrapped foods could not be put in the oven, few cookbooks were available, and real or imagined radiation dangers were associated with the appliance. When such problems were overcome, sales took off.
By the late 1970s, countertop microwave ovens were no longer considered a luxury. With more and more women working in the 1980s and 1990s, the microwave oven’s appeal has become even stronger. Sixty-five percent of U.S. households now contain microwave ovens, as compared to a 45-percent penetration for dishwashers. Industry analysts foresee an eventual penetration by microwaves comparable to that of colour televisions.
Five of the forty or so producers of microwave ovens have well over 50 percent of the consumer market. Samsung, Sanyo, L6, Sharp, and Matsushita are the industry’s largest. Meanwhile, long-time market leaders Litton and Amana have fallen behind. Price competition and discounting are heavy, and premium prices are difficult to maintain. The microwave industry differs from Maytag’s more familiar business arenas, and the acquisitions of Hardwick and Magic Chef provided only a minor position in the fast-moving microwave market.
As Maytag has continued to assimilate these new but related businesses into its portfolio of strategic business units, a recent merger has signalled a new strategic direction for the company. In 1998, Maytag Corporation merged with Chicago Pacific Corporation, best known for its Hoover vacuum cleaners and Pennsylvania House furniture lines. Hoover is an acknowledged leader in the U.S. vacuum cleaner industry, commanding a 32-percent share of the 10 million vacuum cleaners sold in this country each year. The combined sales of the two companies will exceed $ 3 billion per year.
Maytag, however, had a special interest in Hoover: Sixty-five percent of Hoover’s revenues are generated abroad. Globalization in the appliance industry is a concept whose time is just now arriving. Prior to its merger with Chicago Pacific, Maytag had almost no presence in overseas appliance markets. Most appliances built by Maytag and other U.S. companies are too large or use too much water for typical international markets. Hoover, however, has for years been producing and distributing washers, dryers, refrigerators, dishwashers, and microwave ovens in foreign markets — it now operates 13 plants in eight countries. Thus, through its merger with Chicago Pacific, Maytag Corporation has taken a first major step toward globalization.
Questions
Assess Maytag Corporation’s current portfolio of businesses, classifying each business unit or product line. Which units should receive more emphasis, which should receive less? What other new products might Maytag add?
Develop a formal mission statement for Maytag that will help to guide the company and all of its units in the future.
Why has Maytag been so successful in the past in marketing its laundry appliances? Should it use its traditional strategy for its new product lines? Why or why not?



Unit 3
MARKETING MANAGEMENT PROCESS
TEXT А
FACTORS OF THE MARKETING
MANAGEMENT PROCESS
As it is already known the strategic plan defines the company’s overall mission and objectives. Within each business unit, marketing plays a role in helping to accomplish overall strategic objectives. Marketing’s role and activities in the organization are shown in Figure 1, which summarizes the entire marketing management process and the forces influencing company marketing strategy.
Target consumers stand in the center. The company identifies the total market, divides it into smaller segments, selects the most-promising segments, and focuses on serving and satisfying these segments. It designs a marketing mix made up of factors under its control—product, price, place, and promotion. To find the best marketing mix and put it into action, the company engages in marketing analysis, planning, implementation, and control. Through these activities, the company watches and adapts to the marketing environment. We will now look briefly at each factor in the marketing management process.
Target Consumers
To succeed in today’s competitive marketplace, companies must be customer centered, winning customers from competitors by delivering greater value. But before it can satisfy consumers, a company must first understand their needs and wants. Thus, sound marketing requires a careful analysis of consumers. Suppose a company looking at possible markets for a potential new product. The company first needs to make a careful estimate of the current and future size of the market and its various segments. To estimate current market size, the company would identify all competing products, estimate their current sales, and determine whether the market is large enough.
Equally important is future market growth. Companies want to enter markets that show strong growth prospects. Growth potential may depend on the growth rate of certain age, income, and nationality groups that use the product more than others. Growth may also be related to larger developments in the environment, such as economic conditions, advances in technology, and life-style changes. For example, the future market for quality children’s toys and clothing is strongly related to current birthrates, trends in consumer affluence, and projected family life styles. Forecasting—predicting what consumers are likely to do under a given set of conditions—is difficult, but it must be performed in order to make a decision about the market. The company’s marketing information specialists will probably use complex techniques to measure and forecast demand.

Market Segmentation
The market consists of many types of customers, products, and needs, and the marketer has to determine which segments offer the best chance in which to achieve company objectives. Consumers can be grouped in various ways based on geographic factors (regions, cities), demographic factors (sex, age, income, education), psychographic factors (social classes, life styles), and behavioral factors (purchase occasions, benefits sought, usage rates). The process of classifying customers into groups with different needs, characteristics, or behaviors is called market segmentation.
A market segment consists of consumers who respond in a similar way to a given set of marketing stimuli. In the car market, for example, consumers who choose the biggest, most comfortable car regardless of price make up one market segment. Another market segment would be customers who care mainly about price and operating economy. It would be difficult to make one model of car that was the first choice of every consumer. Companies are wise to focus their efforts on meeting the distinct needs of one or more market segments. They should study the geographic, demographic, behavioral, and other characteristics of each market segment to evaluate its attractiveness as a marketing opportunity.
Market Targeting
After a company has defined market segments, it can enter one or many segments of a given market. Market targeting involves evaluating each market segment’s attractiveness and selecting one or more segments to enter. A company with limited resources might decide to serve only one or a few special segments. This strategy limits sales but can be very profitable. Or a company might choose to serve several related segments—perhaps those that have different kinds of customers but with the same basic wants. Or a large company might decide to offer a complete range of products to serve all market segments.
Market Positioning
Once a company has decided which market segments to enter, it must decide what «positions» it wants to occupy in those segments. A product’s position is the place the product occupies in consumers’ minds relative to competitors. If a product is perceived to be exactly like another product on the market, consumers will have no reason to buy it.
Market positioning is arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. Thus, marketers plan positions that distinguish their products from competing products and give them the greatest strategic advantage in their target markets. For example, the Hyundai automobile is positioned on low price as «the car that makes sense». Chrysler offers «the best-built, best-backed American cars»; Pontiac says, «we build excitement»; and at Ford, «quality is job one». Jaguar is positioned as «a blending of art and machine», while Saab is «the most intelligent car ever built». Mercedes is «engineered like no other car in the world»; the luxurious Bentley is «the closest a car can come to having wings». Such deceptively simple statements form the backbone of a product’s marketing strategy.
To plan a product’s position, the company first identifies the existing positions of all the products and brands currently serving its market segments. It next figures out what consumers want with respect to major product attributes. The company then selects a position based on its product’s ability to satisfy consumer wants better than competitors’ products. Finally, it develops a marketing program that communicates and delivers the product’s position to target consumers.
I. Key terms:
Target consumers — цільові споживачі — a fairly homogeneous group of customers to whom a company wishes to appeal.
Market segment — сегмент ринку — a relatively homogeneous group of customers who will respond to a marketing mix in a similar way.
Marketing segmentation — сегментування ринку — a two-step process of: 1) naming broad product–markets and 2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes.
Market targeting — вибір цільового ринку — evaluating market segment’s attractiveness and selecting target segment.
Market positioning — ринкове позиціювання (вибір позиції на ринку) —
is the process marketers go through in manipulating the marketing mix to achieve a particular product position in the minds of target consumers.
II. Vocabulary notes:
forecast, v.
say in advance what is likely to happen — прорікати, пророкувати; передбачати; робити прогноз; to forecast the future — провіщати майбутнє;
be a sign of sth. — бути передвісткою (ознакою); these clouds forecast the storm — ці хмари провіщають грозу;
forecast, n.
statement that forecasts sth. — прорікання, пророкування; передбачення, завбачення; weather forecast — прогноз погоди;
perform, v.
do (a piece of work, sth. one is ordered to do, sth. one has promised to do) — виконувати; робити, зробити, здійснювати; perform a task — виконувати завдання; perform an experiment — проводити дослід;
act (a play); play (music); sing, etc. before an audience — грати, виконувати (роль), ставити (п’єсу), грати на музичному інструменті;
performance, n.
performing — виконання, здійснення; інтенсивність праці;
notable action, act, behavior — дія, вчинок; put up a good performance — добре поводитися (проявити себе); What a performance! — What shocking behavior — Яка жахлива поведінка!;
performing of a play at the theatre; public exhibition; concert; show — виконання; гра; вистава; спектакль; виступ, концерт; кіносеанс;
evaluate, v.
find out, decide the value of sth. — оцінювати, визначати вартість; давати оцінку; визначати якість (важливість);
find out the amount, quantity of sth. — визначати кількість;
evaluation, n.
finding out or deciding the value or amount of sth. — оцінка; оцінювання, визначення (кількості тощо);
analysis — аналіз (даних);
environment, n.
surroundings, circumstances, influences — оточення (навколишнє середовище); зовнішнє становище;
perceive, v. (formal)
become aware of, esp. through the eyes or the mind — розуміти, усвідомлювати; збагнути; помітити;
feel, differentiate — відчувати; почувати; сприймати; розрізняти;
perception, n. (formal)
process by which we become aware of changes (through the senses of sight, hearing, etc.) — сприймання; organs of perception — органи чуттів; усвідомлення, розуміння;
act or power of perceiving — здатність сприймати; уявлення (про щось); проникливість, здатність розуміти;
predict, v.
say, tell in advance — провіщати, прорікати; передбачати; пророкувати; predict the future — передбачати майбутнє;
be, go ahead — передувати, випереджати;
prediction, n.
sth. predicted, prophecy — передбачення, провіщення, пророцтво, прогноз; попередження; застереження.
III. Answer the following questions:
What does the strategic plan define?
What role does marketing play in the organization?
Characterize the entire marketing management process and the forces influencing company marketing strategy.
Why does the company engage in marketing analysis, planning, implementation and control?
What does sound marketing require?
Why is future market growth important?
How can consumers be grouped?
What does a market segment consist of?
What does market targeting involve?
How can market positioning be defined?
What does the company do to plan a product’s position?
IV. Find in the text the following words and word combinations and translate the sentences in which they are used:
put into action; make a careful estimate; current market size; psychographic factors; behavioral factors; usage rates; operating economy; related segments; a complete range of products; arranging for a product to occupy a clear, distinctive and desirable place; best-backed; figure out; with respect to.
V. Find English equivalents:
виконувати загальні стратегічні завдання; вибирати найбільш перспективні сегменти; зосереджувати увагу; маркетинговий комплекс; пристосуватися; вимагати ретельного аналізу споживацької аудиторії; конкуруючі продукти (товари); оцінювати поточний обсяг продажу; виявляти стійкі перспективи зростання; темпи зростання; зміни в стилі життя; достаток споживачів; складні методи (методики); передбачати попит; маркетингові стимули; привабливість ринкового сегмента; обмежені ресурси; повний набір продукції; позиція продукту; ринкове позиціювання; стратегічна перевага; суміш; розкішний; оманливо просте твердження; створювати основу; властивості продукту.
VI. Memorize the following terms and their Ukrainian equivalents:
А. Management
1) управління (планування, регулювання, контроль), керівництво, менеджмент, завідування; 2) організація виробництва;
3) адміністрація, дирекція;

automated management
автоматизоване управління;

business management
1) управління комерційним підприємством; 2) теорія управління комерційним підприємством;

cash management
контроль та регулювання грошових операцій;

day-to-day management
оперативне управління;

debt management
контроль та регулювання боргових відносин;

financial management
управління фінансовою діяльністю;

income tax management
ведення банком податкових справ клієнта;

investment management
управління портфелем цінних паперів;

job management
організація праці;

line management
лінійне керівництво;

monetary management
контроль та регулювання грошового обігу;

personnel management
1) керівництво кадрами; 2) трудові відносини; 3) взаємовідносини адміністрації з окремими працівниками;

portfolio management
контроль і регулювання портфеля активів;

project management
1) керівництво проектом; 2) управління підприємством;

record management
оперативний облік;

staff management
функціональне (штабне) керівництво;

top (executive) management
1) вище (виконавче) керівництво; 2) вища адміністрація;

venture management
цільове управління;
В. Rate
1) норма, розмір, rate of production а) норма виробітку; б) продуктивність; rate of profit — норма прибутку; rate of surplus value — норма додаткової вартості;
2) ставка; тариф; такса; розцінка;
3) курс; dollar rate — курс долара; the rate of exchange — валютний курс;
4) ціна, оцінка;
5) pl. вантажний тариф;
6) швидкість, темп;
7) відсоток, частка, коефіцієнт, пропорція; ступінь;

8) пай, порція;
9) розряд, сорт;
10) місцевий (муніципальний, комунальний) податок, збір;
11) оцінка (у школі);
12) інтенсивність, потужність;
13) частота;
14) витрати;

annual rate
річний показник;

area rate
зональний тариф;

average rate
середня норма;

average tax rate
середня податкова ставка;

bank rate
облікова ставка банку;

birth rate
коефіцієнт народжуваності;

buying rate
курс купівлі;

capacity rate
коефіцієнт потужності;

ceiling rate
найбільша норма відсотка;

closing rate
курс на день закриття біржі;

consumption rate
норма споживання;

cost rate
ставка накладних витрат;

curb rate
курс чорного ринку;

deposit rate
ставка за депозитами;

driving rate
інтенсивність процесу;

employment rate
відсоток зайнятості;

expansion rate
темп зростання (економіки);

expenditure rate
швидкість витрат (ресурсів);

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