Модуль7. Маркетинг и реклама. Маркетинг на транспорте. Экономические системы. Рыночная экономика. Современные тенденции рынка. Железные дороги и рыночная экономика

1. Text 1. About Marketing

If a company wants to increase the efficiency of production, it should take into consideration some business producers and consumers’ interests. In other words, producers must know what to produce and consumers must know that it is being produced. The task and responsibility of the marketing staff is to link these two factors together. Marketing is the process of keeping producers informed of consumers’ needs and evaluating that their products are available to consumers in the way the latter want. A market consists of people who sell and buy. That is way the markets can be consumer and industrial. Marketing is possible only in the free–market economies, as in the central-planned economies it is the government that dictates what should be produced and then distributed.

Marketing is the strategic business function on facilitating and fulfilling customer demands by introducing innovations, developing relationships and creating good customer services.

Marketing can be seen as a fundamental philosophy, and as a set of applied techniques. As a business philosophy, marketing puts customers at the centre of an organisation’s considerations. In a competitive business environment, an organisation will survive only if it focuses on the needs of clearly defined groups in society and produces goods and services that satisfy their requirements efficiently. A company must pay attention to the customer wanting to buy, rather than to the producer needing to sell.

Marketing, as a set of techniques implies market research as a technique for finding out customer needs and advertising as a technique for describing the benefits of the product offered to the customers. New product development and pricing are also marketing techniques.

The marketing mix comprises Product, Price, Promotion, Place, People, Process, and Physical Evidence decisions.

A product is a service or goods that an organisation offers to the customers. Developing a new product a manager can control quality, style, special design features, packaging, warranties, after-sales service, and the brand image.

A price determines the income that will be generated. If the selling price of a product is set too high, a company may not achieve its target sales volume. If it is set too low, the target sales volume may be achieved, but less profit will be earned.

Companies usually make their goods and services in places that are convenient for production. Customers buy them where the purchase process is the easiest. Managers should determine how to deliver the goods from the place of production to the place of sale. This means determining the channels of distribution.

Logistics or physical distribution management is also very important as it helps to optimise transport and storage expenses.

Promotion is used by companies in order to deliver the message describing the benefits of their products to their target markets. Promotional tools include advertising, personal selling, public relations, sponsorship, and direct marketing methods.

People decisions are particularly important to the marketing of services where staff has a high level of contact with customers. Marketing effectiveness is affected by the actions of those employees who interact with customers.

The process of production may be of little concern to the consumer of manufactured goods, but it is often of critical concern to the consumer of ‘high contact’ services. For busy customers, the speed and friendliness with which the customers are processed may be as important as the product itself.

Physical evidence is especially important for buyers of intangible services. This can be a brochure which describes and gives pictures of important elements of the service or product. The appearance of staff can give evidence about the service. A clean, bright environment used in a service outlet can help to persuade potential customers to make a purchase decision. As for the well-managed businesses, marketing is the process that has no beginning or end. It involvs analysis, planning, implementation, evaluation and control.

Answer the questions:

1. What is marketing?

2. Why are companies engaged in marketing?

3. Who or what is in the centre of the company’s marketing efforts?

4. What are the components of the marketing mix?

5. What product characteristics does a manager control?

6. What may happen if the selling price of a product is too high?

7. What role does the concept of place play in marketing?

8. What promotional tools can a company use?

9. What is particularly important to the marketing of

services ?

10. What does physical evidence refer to?

Text 2. Advertising

Advertising is one of the largest industries. Business can spend billions of dollars on advertisement of its products. As consumers are the main target of business, companies pay special attention to the methods of advertising. Advertising is one of the promotional tools in the hands of sales companies for achieving their main goals –that is to make us to buy more and more. Advertising can be informative, persuasive, reminding and supporting. All these kinds of advertising have different functions. Thus, informative advertising provides customers with information about the product and its advantages, while remonstrative advertising tries to make customers buy the products of the particular company but not of a competitor’s one. Advertising often results in lower prices helping companies reduce costs on their goods. Advertising steps up competition and helps the economy of the country by stimulating consumer demands. Due to the new technology, advertising has shifted from television and print media to the Internet and has started to get its audience. Viral web ads spread from computer user to computer user. With people, spending much time on the Net, and many using video-friendly high-speed connections, it seems highly likely that viral video advertisements will become mainstream before long. And, as competition for on-line user attention increases, companies will be forced to do more to ensure their ads are watched.

However not everybody thinks that advertising benefits the economy. Some critics have the opposite point of view and consider advertising the greatest evil of our days. They say that information contained in advertisements does not inform but misleads the consumer. Consumers spend money for products they do not really need. The radio and TV are not free because they are dependent of advertising and sales companies who pay big money for advertising time and dictate their will to different channels and programmes. To make the advertising company successful, each organisation should consider an advertising plan as part of its marketing plan. Companies should have their own advertising departments or they can turn for advice to special agencies.

Answer the questions:

1. How much does business spend on advertising?

2. Who is the main target of sales companies?

3. What types of advertising can you name?

4.What does informative advertising provide customers with?

5. What is the aim of remonstrative advertising?

6. What is the role of advertising in the economy of the country?

7. What has happened to advertising due to the new technology?

8. What do critics say about information contained in advertisements?

9. What do critics think of the modern radio and TV?

10. What should a company do to make advertising successful?

Text3. Marketing in Railway Systems

Marketing is in many ways the central activity in business management. Marketing in a railway environment is a method and process for planning, mobilising and applying the resources to satisfy customer demands and to get profits. Marketing Mix includes Product, Price, Promotion, Place, People, Processes and Physical Evidence.

The core products of railway organisations are transportation services. For a railway passenger service, the main characteristics of the product are the transit time, cleanliness and the riding comfort of the rolling stock. For a railway freight service, the characteristics of the product are the operational reliability of the service; the security for consignments and the availability of door-to-door delivery.

As to the price for a railway passenger service, the fare is usually graduated by distance. In addition, fare rates vary with the standard of service. Different discounts may be provided as well. In a railway freight service, the tariff is usually expressed as a rate per tonne-km.

Promotion of railway services and sales representation are becoming important tools in the railway business.

“Place” in the case of railways includes not only passenger stations and freight terminals, but corporate headquarters and centralised railway reservations offices as well.

People are the most important resources of the railway enterprise. Railway management systems can’t be successful if the customers do not feel that the railway staff eagerly responds to their needs.

Railway processes and operations must be compatible with the needs of the railway customers. If a customer requires regular loading on fast freight trains, then a railway’s policy of operating slower trains will be incompatible with these needs. That’s why the railway must be prepared to change its process accordingly.

Physical Evidence refers to the layout and presentation of the railway facilities. For example, the design of passenger stations must be comfortable for all categories of travellers.

A Marketing Plan is one of the most significant outputs of the marketing process. It should identify marketing objectives and strategies, specify sales, pricing and promotional strategies, review past sales and profit performance.

Marketing Strategies include actions taken to modify the elements of the marketing mix in order to achieve marketing objectives. Marketing Objectives as well as Marketing Strategies must be market segment related, practical, realistic, and responsive to the actual needs of customers.

Answer the questions:

1. What is railway marketing?

2. How many components does the marketing mix comprise?

3. What are the main railway products?

4. How is the price for a railway passenger service calculated?

5. Why are people the most important resources of the railway enterprise?

6. Why must railway processes be flexible?

7. What does physical evidence refer to?

8. What does a marketing plan identify?

9. What do marketing strategies include?

10. What are the main demands to the marketing objectives?

Text 4. About Economic Systems

For thousands of years human societies had very simple economies. There were no shops, markets or traders. There were no employers, paid workers or salaries. Today, this kind of economy is known as traditional and there are some remote corners of the world where this system is still alive. Like any other economic system, the traditional economy has its benefits and drawbacks. The biggest benefit is that these are peaceful societies.

Walking through a busy street market, it is hard to imagine that behind this noisy confusion lies a very logical economic theory - the market economy. The market economy or free market is not controlled in any way by the government. In a free market, the only reason why things are bought and sold, is because there is a demand for them. The role of the company in the market economy is to supply customers with what they want. However, companies need an incentive to grow and develop, and there are only two ways of how to make a profit. The first way is to rise prices, while the second one is to reduce production costs which bring companies to competition and technology. Competition exists in a free market economy because theoretically anyone can be a producer. It means that companies have to compete with each other for a share of the market. As for technology, it is vital because producers need ways to reduce costs. Technology helps companies to produce more goods in less time and with less effort.

As for the planned economy, in many ways it is the direct opposite of the market economy. In the planned economy very step is decided by the government. One of the drawbacks of the planned economy is problems with supply. It is very difficult for governments to know exactly how much to provide to meet demand which leads to shortages. When shortages happen, governments. can do two things- ration goods or raise prices. In this situation people start hoarding things and the situation gets even worse. For this reason, countries with planned economy such as China are rapidly moving toward another system - the mixed economy.

In mixed economies privately owned businesses exist alongside state run industries. The economy is divided between the private the and state sector which includes industries that the government thinks are important and need protection from the risks of the free market. These could include public transport, hospitals, schools and large industries such as oil, steel or agriculture. They are sometimes called primary industries as they provide basic materials for manufacturers. State industries use money collected in taxes by the government. They do not need to compete with other companies and may turn into large monopolies and dictate there will to business. That is why many counties have started the process of deregulation which means freeing up the economy and to allow private businesses to compete with state-owned industries. Deregulation of such services as telecommunications, transport and banking is generally accepted by people. However, the public does not approve deregulation in education and health services, feeling that profit motivation will harm them rather than improve. Another way is to put limits on free enterprises and to ban trade of certain goods if they are dangerous. Governments may also regulate methods of production. They do this to guarantee that products are safe for consumers or to protect the environment.

Answer the questions:

1.What are the main features of the traditional economy?

2. What is the main principle of the market economy?

3.Why is completion vital for the market economy?

4. Why do companies have to develop technology?

5. What happens in countries with the planned economy?

6. What is the main drawbacks of the planned economy?

7. How do business and state industries function in countries with mixed economies?

8. What does the process of deregulation mean?

9.What type of deregulation is not accepted by public?

10. What other ways of state regulation can you name?

Text 5. Current Market Trends

The global market of the 21^st century is a turbulent, dynamic and rapidly developing world. New market forces have replaced the old ones. Companies implement new technologies, forms of sale, and strategies for changing the world around us. New products, new forms of business organisation and new business regulations are emerging. To be competitive, companies invest a great deal of time and money researching new products and their targeted buyers. So, when innovative products are launched in the market, they are snapped up by buyers, rather than having to be sold at a discounted price. New forms of business organisation are multinational companies and private-public partnerships. New regulations are the ones concerning the protection of competition, deregulation of market, economic decentralisation, support of research, and support of domestic corporations. Global markets bring an opportunity for growth, not only for industry giants but for all companies if they have enough resources. National boundaries tend to be irrelevant; the corporate headquarters might be anywhere. Every company wants to be recognised as the leading provider of values for customers, employees and shareholders in its field.

To be competitive in the global market economy a company should be responsive to the customer’s needs, making the customer's satisfaction the top priority. A company must follow the demographic and technological changes, investigate new market segments and new needs appearance. In order to draw out new products a company must define how to satisfy these new needs and wants, to understand what products or services the customers need, and what the products characteristics must be.

A company must regularly evaluate existing products or services as well, improve the quality, performance and reliability, rationalise the production, and develop a perfect delivery system.

Building a brand and a positive company image gives a company a competitive advantage and a good experience in public relations. The management of the company should monitor the price and value relationship, and estimate the employees level of performance. It is necessary to gather information about the key competitors in the market place, to analyse the competitors’ advantages and weaknesses and to develop the strategy how to be better.

A company must have a well-developed ability to decide where, when and how to compete. These decisions require the knowledge of market trends and competition current affairs of the company as well as a highly qualified staff.

Answer the questions:

1. Why do we say that the market of today is a turbulent, dynamic and rapidly developing world?

2. Why do companies invest a great deal of time and money researching new products and their targeted buyers?

3. What forms of business organisation do you know?

4. What is a top priority for a company which wants to be in the global market economy?

5. What must a company investigate when it is launching a new product?

6. What must a company evaluate, improve and develop in order to be competitive?

7. What do brands and a positive company image give to the company?

8. What information should a company gain to develop the strategy of how to be better?

9. What should a company do become competitive ?

10. Why must the staff of the company be highly qualified?