English for Economist and managers-1

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Notice that the language for a rapid change is very colorful: for a decreaseplunge, plummet, collapse; for an increase – skyrocket or shoot up. The rapid increases and decreases have the most descriptive possibilities. When the movement of the trend is neither up nor down, we say it is flat. When it varies, going up and down, but within a range, we say it fluctuates. We use the word peak for the high points, trough – for low points. When you have a chart with many changes, you describe each change of movement in a narrative. A pie chart is a visual aid you might consider using to illustrate how large the market is, and who the competitors are.

The Web as a Sales Tool. There is discussion today about how beneficial the Web is as a sales tool. Many companies, even those with a tremendous presence on the Web, are not making a lot of money. They are positioning themselves for the future, with hopes that buying on-line will; become an everyday event.

The question that must be answered is whether the World Wide Web will remain a place of information, or evolve into a profitable marketplace for businesses. In the last decade, the number of personal computers (PC) has multiplied to the point that potential vendors of products and services now see tens of millions of customers to whom they can market their products. As customers become more relaxed and secure about buying on-line, market potential will rise.

The most successful vendors are those that mainly transact business by phone, selling a product that does not have to be present physically. If you know the title or author of f book you want to buy, it is easier ordering it by computer than going to the bookstore. Besides, you may get a discount from a Web vendor.

A major problem vendors have is that banner ads are not seen unless they are selected (clicked on) by the consumer. The fact that "surfers" can bypass an advertisement means that there is no assurance it will be read. Another problem is that people fear giving personal information on-line, such as credit card numbers or a personal address. Thus, a company can spend a good deal of money, with no assurance of the size of its market. If this aspect of Web advertising changes and new approaches are implemented, then commercialization may overtake the Web.

Unit 9

Investment Needs. Once we have collected money due, paid our business expenses, our taxes, and necessities of life, what we have left over, we can save or invest. We can go to a financial advisor or consultant and have a financial plan made to assess our situation.

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A financial plan analyzes the different areas of our financial life: risk management, estate planning, investment needs, tax planning and retirement planning or a pension plan.

In the United States, Wall Street, located in New York City, is the center of the financial world. Although investments are not limited to the New York Stock Exchange, not to any one stock market, we often refer to financial matters as what happens on Wall Street, which houses the largest exchanges.

There are, of course, many different types of investments that are not centered around Wall Street: real estate, hard assets such as gold or precious gems, business ventures, insurance products such as annuities, or new business products and inventions. In fact one can invest money in almost anything.

Having a business you may refer to a tax shelter, an investment in which the taxes are either postponed or not levied at all. These tax benefits are created in many countries to encourage investment in particular areas of the economy.

Today, there are many discount brokerage houses, and competition among them is great. They discount the commissions one pays when one buys or sells securities. Investors who do not need access to information and recommendations, who do their own research, are able to get discounts from firms that cater to this type of investor.

You may be interested to know that...

-paper money was first used in China in about 650 AD, but was not introduced in Europe until XVII-th century. It was popular because it was easier to carry than large amounts of heavy coins;

-nowadays many commercial transactions are done through the banking system without money. Financial information is spreading all over the world via satellites;

-at one time the Romans used cattle as money;

-people started to exchange goods and services for tokens that could be stored and exchanged later. The first tokens were shells, shark's teeth and large stones;

-in ancient times, business was done by exchanging, a farmer could exchange corn for goats, or sheep for cattle. This is called bartering.

Bank Cards. There are a few types of bank cards. The most popular are credit cards and cash cards which look very much alike.

Cash dispenser, automatic teller machine or cash-point are some of the names given to machines from which customers can withdraw money from their bank accounts, using their cash cards.

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If customers want to pay for goods or services by check, they can use their cards to guarantee their checks. In a shop the salesperson will write down the number of the customer's bank card on the back of the check. The salesperson also makes sure that the customer's signature of the check is the same as the signature on me; bank card.

Credit cards are also very convenient because it is possible to buy things in shops, pay with for different services and so on. When a customer pays for his purchases in a shop for example, he presents his credit card to the seller. The seller takes the details of the card: the number, the credit limit and the expiry date. The customer signs the seller's voucher (making two copies) which the seller uses to collect payment from the credit card company or the bank later.

For this service the retailer pays a fee, about 4 percent of the value of the transaction. Each month the credit company or the bank sends the cardholder a statement which lists that months transactions and interest charges.

When the company or the bank receives the vouchers it pays the bank of the payees through the clearing system the value of each retailer's total sales minus the commission. At the same time it debits the cardholders' accounts.

Payments in International Trade. With any form of international trade it is essential to ensure that payment will be received in accordance with the terms of the underlying commercial contract. The secure and established methods of setting international trade transactions are:

-by documentary letters of credit,

-by documentary collection bills.

Documentary letters of credit are opened by the importer's bank with a bank in the exporter's country, usually the importing bank's correspondent in the exporting country. Exporters submit to the bank in their country all the shipping, insurance and documents specified in the letter of credit issued by the importer's bank.

If the documents are in order the bank in the exporting country will credit the exporters with the proceeds. The proceeds are reimbursed by the importer's bank in due course. Documentary collection bills are presented to the importer's bank, or its correspondent by the exporters together with all the shipping, insurance, and other documents, specified in the contract. If the documents are in order the importers instruct their bank to pay and they collect the shipping documents then.

There are few ways of transferring money from bank to bank. In the recent past these ways were: mail transfers and telegraphic transfers. Now these two types of

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messages are practically replaced by SWIFT messages. SWIFT stands for the Society for Worldwide Inter-bank Financial Telecommunication.

It is a network serving now more than 3000 banks in about 100 countries. It speeds up payment messages between banks immensely. If sending and receiving banks are both "logged-in" a message can be delivered in under 20 seconds. Over 1 million messages are sent even day via the computers of SWIFT and its member banks.

The role of correspondent banks is permanently growing. They facilitate and expedite international payments. A correspondent bank is one which carries deposit balance for another bank located in another city or country and engages in an exchange of services with that bank.

Unit 10

International Trade. The basic idea of international trade and investment is simple: each country produces goods and services that can be either consumed at home or exported to other countries. The main difference between domestic trade and international trade is the use of foreign currencies to pay for goods and services crossing international borders. The world trading itself involves a lot of currencies.

Trading in goods may be done between countries, states, and individuals for their mutual benefit. If a country has exports in excess of its imports, that country will be magnifying its income. In trade, two fundamental concepts are absolute advantage and comparative advantage.

Absolute advantage is when one nation can produce a product more efficiently than the other. Thus, the basis of trade is created. Comparative advantage allows even a nation that can produce two goods more efficiently to establish a basis for trade.

The law of comparative advantage is the fundamental reason for trading. It is when two entities, each one producing the same two types of goods, specialize in one good that it can produce at a lower opportunity cost. Therefore, both entities derive more goods by trading because each entity can offer the best produced goods at the best possible price.

Any two entities can engage in trade, i.e. two nations, two states, or two persons. Through specialization and free trade, nations can achieve a more efficient allocation of scarce world resources, thereby raising standards of living.

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The Rules of World Trade. In an inter-linked global economy, consumers are given the opportunity to buy the best products at the best price. We know that, in economic terms, each producer gains by specializing in what he or she can do best.

A skilled lawyer, for example, should not waste valuable time in typing his or her own legal briefs - even if the lawyer can type better than a secretary. Similarly, when every country is allowed to do what it does best, - letting the French excel in fashion, the Japanese in electronics, and the American in aircraft the world economy prospers.

Free trade is based on the notion of open markets. Whenever a country exports or imports goods or services, there is a resulting flow of funds, money returns to the exporting nation, and money flows out of the importing nation. Trade and investment is a two-way street, and with a minimum of trade barriers, international trade and investment usually makes everyone better off.

By encouraging foreign trade, countries expose their own producers to foreign competition. Foreign competition usually forces companies to be more efficient and more competitive. When a country wants to encourage its own exports, it can provide loans or grants to foreign buyers through state-supported export-import banks.

These Ex-Im banks provide low-cost loans called export credits, that help stimulate exporter. When a government wants to encourage a new trading partner, it removes restrictions and barriers to its internal market. Countries may also encourage trade by allowing importers and exporters to barter goods.

Some trade barriers will always exist as long as any two countries have different sets of laws. However, when a country decides to protect its economy by erecting artificial trade barriers, the result is often damaging to everyone, including those people the barriers were meant to protect.

In the long run imports and exports must equal each other. It is exports that pay for imports, and vice versa. The greater exports we have the greater imports we must have, if we ever expect to get paid. Without imports we can have no exports, for foreigners will have no funds with which to buy our goods. When we decide to cut down our imports, we are in effect deciding also to cut down our exports and vice versa.

The Rise and Fall of Exchange Rates. Foreign exchange is an instrument used for international payment. Instruments of foreign currency consist not only of

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currency, but also of checks, drafts, and bills of exchange. A foreign exchange rate is the price of one currency in terms of another.

Currencies like other commodities such as tea or oil, have a certain value, the only difference is that each currency's value is stated in terms of other currencies. French francs have a value in US dollars, which have a value in British pounds, which have a value in Japanese yen.

These exchange rates change every day and are constantly updated in banks and foreign exchange offices around the world. The world's foreign exchange markets use all linked electronically. Like other markets they are subject to the laws of demand and supply. If enough traders want to buy US dollars, its value will go up.

A consumer in a given country will not notice a change in the exchange rate as long as he or she buys only goods produced domestically. But the prices of the same country's goods for a foreign buyer very definitely are affected by changes in the rate at which the currencies of the buying and selling countries can be exchanged. So ending economic isolation requires a currency that is convertible.

As anyone may notice, the exchange rate is slightly different if the customer is buying or selling any one particular currency. This spread between the "buy‖ and ―sell‖ rates ensures that banks make a small profit every time one currency is changed into another. Foreign exchange prices are influenced by economic and political events and sometimes by the speculation of individual traders.

A currency that is overvalued or too costly will stimulate purchase of foreignmade goods (imports) and discourage the sale abroad of domestic-made goods (exports). This will likely lead to reduced production and unemployment in some sectors of the economy.

In contrast, when an exchange rate is too low, it provides an incentive for foreigners to buy the country's 'cheap' exports, sending a flood of new money into the exporting country. This creates inflationary pressures and higher prices at home.

During periods of economic turmoil, the world often turns to a particular currency as a refuge. When political or social unrest threatens other currencies around the world, traders and investors rush to buy hard currencies as US dollar and German mark, which are expected to preserve their value in times of trouble.

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Unit 11

General Characteristics of a Product. Of all controllable factors (four Ps: production, price, plan, promotion) product is predominant. All products have a "product life cycle". The stages of the cycle are: introduction, growth, maturity and decline. The length of a product life cycle depends on the intensity of the competition, extent to which the new product is an innovation, a modification of an existing product, introducing timing of technologically superior products, and marketing techniques.

Visual acquaintance with the product can be effected through dealers' show rooms, directly from the factory, catalogues, direct mail coupons, telemarketing with telephone sales people, computer shopping services.

Describing the product one should give the main qualitative characteristics of the merchandize, the advantages of its design, and even its packing peculiarities. In the product description section of a business plan one should also describe the organization of services.

Technical data of the Product. Imagine, you are the Production and Technical Manager. Look at the sales leaflet and act out a conversation. Use the questions:

What does your product look like?

What features does your product possess?

What features distinguish your product from similar products?

Use the terms: Features: Safe. Reliable. Easy in use (maintenance). Attractive looking. Modern design. Cheaper than other fruit drinks. Natural taste. Excellent flavor. Exquisite ingredients. Sophisticated technology. Technical Data: Output 6,000 cartons per hour. Length 8.0 cm. Width 3.5 cm. Height 12.5 cm.

How a New Product is Made. Every year new products coming into the western market are going in numbers. The greater part of them are hardly new. To be more exact, they represent existing items that have been slightly changed. Only few products have undergone a real modification, and can be regarded as innovations.

For example, TV set, the refrigerator – each was an innovation but not an adaptation. A great number of innovations and adaptations are designed, produced and marketed by small businesses. Very often a new product is formed on the basis of the new business. Sometimes there is a patent to make the business more successful. But it happens very often that market research has not been done very carefully.

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Even if major producers pay more attention to doing research and testing, there is little hope for success. A promising new product can appear unsuccessful because of unreasonable prices, inadequate promotion, and poor selling methods. Thus, all technologies applied for the purpose of improving the product turn out to be vane, and its producer can hardly make a profit. Phases of Product's Life:

Phase 1 - launch; it's characterized by moderate sales and low profits. Phase 2 - sales rise; it's characterized by high profitability.

Phase 3 - sales rise peak; it's characterized by the fact that profits start to fall. Phase 4 - market saturated; it's characterized by sales and profits fall.

Unit 12

Problems of Marketing of Woodland Products. The marketing of woodland products is the final step in the cycle producing and utilizing tree growth. Without profitable disposal of products there can be little incentive to grow timber.

Naturally an owner wishes to realize to the fullest extent upon the material that he has for sale. To do this he must have complete knowledge of the technical phases of the problems peculiar to the disposition of woodland products. At the same time he must have the innate ability to plan and carry to completion a profitable business transaction.

The disposal of some products like railroad ties, poles, pulpwood, and even sawn logs to the larger organizations with well-established purchasing regulations and policies is relatively simple. The seller produces his material at some central point in accordance with previously agreed to specifications, accepts the rulings of the inspectors and is paid accordingly.

On the other hand, much of the material from the smaller woodlands is sold locally to mills, wood-using industries, or to buyers of stumpage. In transactions of this type, it is difficult to determine with exactness the costs and basic values because of the variation in costs of harvesting and transporting the product. When logs are to be sold at a mill or free on board (f.o.b.) railroad cars, their prices delivered are known and agreed upon in advance.

Frequently an owner has valuable material for sale, but in such limited quantities that its true worth is difficult to realize upon. Certainly it is uneconomical to cut sound merchantable trees into small products and sell them in general mixture with

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less valuable woods. In this connection the advent of truck transport has made possible a better opportunity for long-distance shipment than that which existed when material had to be shipped in carload lots.

There are many examples of sales, whereby the owner has disposed of his standing timber for a single sum without knowledge of the volumes involved. If material is to be sold as stumpage, the seller should make an estimate of his standing timber and thus be in position to know the amounts of each species available for sale.

Utilization Practice. The field of utilization deals with the uses of wood, the wood-using industries, and the procedures of logging, milling, grading, and seasoning. If an operator carries his work through the stages of manufacturing and selling sawed lumber, he will be confronted with a need for information in each of these fields.

A knowledge of the uses of wood of the various species is of value for two reasons: first, it enables the seller to get in contact with the industries using the kinds of wood that he has for sale; second, it enables him to dispose of his wood to the markets to which it is most profitably adapted. Many woods are particularly valuable for special purposes; yet others, because of lack of outstanding mechanical or physical properties, must be sold without regard to special uses. The possibilities of the most profitable uses should be investigated carefully prior to sale.

The wood-using industries are many and varied. Railroads, mining companies, light and power companies, and many manufacturing concerns of a general nature are in the market for special kinds and sizes of wood products.

The sale to local markets eliminates the expense and distance of long-range shipment by either rail or truck. For material of average grade it will always be more satisfactory if local markets are available. But it may be profitable to sell products of higher quality to specialized industries that want the better grades of selected species. The cost of shipment must be weighed against the prices that are offered.

Products to be sold on the basis of specifications should be cut to conform to them. The material should be skidded and otherwise transported with a minimum of both expense and damage. Accurate records of expense should be kept. As a general rule, the woodland owner is advised to dispose of his logs before they are sawed into lumber. Otherwise he may find himself with a large amount of sawed boards or planks on hand and be unable to sell them to advantage.

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Operating Costs. Operating costs include those of logging, milling, and the intermediate steps in handling. Labor costs, team hire, tractor costs, distances of skidding and hauling, type and location of land on which the timber stands, and expense of milling vary widely, yet every single item enters into the final determination of value.

Costs vary with the sizes of trees and logs handled and with species of timber: Transportation costs are particularly important elements in appraising the value of stumpage. There are certain steps in a complete woods operation, namely: the felling of trees, sawing into logs, skidding of logs to central loading points, hauling of logs to a mill, sawing of logs into lumber, piling of lumber for seasoning, transportation of lumber to railroads or sales centres, piling in lumberyards.

Obviously, some of these steps may not be necessary. These are local considerations and only the elements actually involving expense must enter into a specific appraisal. Average figures are of little significance. Transportation costs are the items subject to greatest variation. In milling operations, the largest single item of cost is that of sawing.

Costs for piling, transporting, and loading will depend on whether or not lumber is piled for seasoning, hauled to a railroad, and loaded on cars. If trucked directly to a mill, the total cost should include the last expense incurred by the operator. In every case his costs will end when he disposes of the lumber either on cars or at the yard of a plant where it is unloaded.

If the main products of an operator are other than lumber, the average costs should be determined for the product in the form in which it is disposed of. Regardless of the form of ultimate use, the principle of cost determination is the same.

Sale of Standing Timber. Standing timber is sold in various ways. An owner may sell all his merchantable timber or only a few designated trees. Between these extremes the sales might include all trees over specified diameter limits, or trees specially marked by the owner for cutting, without regard for diameter classes.

When a sale is made on an area basis, the owner commonly sells all the merchantable material in his woods for a specified sum. A common procedure is for a mill operator to purchase the standing timber, move his mill to the woods, and then cut all trees that can be used by him, skid the logs, and saw them into lumber.