Market structure

Sources of Money's Value

Money must have and retain value. All money falls into three categories according to what gives the money its value. The three categories of money are commodity money, representative money, and fiat money.

Commodity money. An item that has a value of its own and that is also used as money is called commodity money. Throughout history, societies have used many commodities as money. The ancient Romans sometimes used salt as money. Precious metals such as gold and silver, and gems such as rubies, emeralds, and diamonds, have often been used as money. The majority of nations in the world today use currency – coins and paper bills – for money. The Lydians, an ancient people in Asia Minor, minted the world's first coins about 700 B.C. The Chinese developed the first paper currency, perhaps as early as A.D. 1000 or A.D.1100.

Representative money. Money that has value because it can be exchanged for something valuable is representative money. Checks are representative money because they can be exchanged for currency as long as the check writer has sufficient funds on account.

Fiat money. Value is attached to fiat money because a government decree, or fiat, says that it has value. Coins and paper money are examples of fiat money. The money has value because the government says that citizens must accept paper money and coins for all transactions.

 

Translate the following words and word combinations or find Russian equivalents.

1. relative value
2. to figure profits and losses
3. tax receipts
4. accounting task
5. to accumulate wealth
6. to withstand wear and tear
7. to mint coins
8. stability in value
9. durability
10. acceptability
11. to make transactions
12. payable on demand
13. checkbook money
14. representative money
15. fiat money

 

Find English equivalents for the following Russian expressions and words.

1. средство обращения
2. мера стоимости
3. средство накопления
4. ведение учета
5. стоимость затрат
6. единица бухгалтерского учета
7. покупательная способность
8. портативность
9. делимость
10. скоропортящийся
11. депозит до востребования
12. сберегательный счет
13. срочный депозит
14. вексель
15. товарные деньги

 

Translate the following sentences from Russian into English.

1. На самом деле многие монеты, отчеканенные в древности, всё еще существуют.
2. Сравнивая цены на товары, люди могут судить об относительной ценности различных предметов.
3. Фирмам необходимо подсчитывать прибыли и убытки.
4. Деньги не портятся, поэтому их можно скопить или сберечь для дальнейшего использования.
5. Иными словами, покупательная способность денег должна быть относительно постоянной.
6. Чеки потому считаются деньгами, что они являются средством обращения, мерой стоимости и средством сбережения.

 

10 семестр

 

GOALS OF ADVERTISING

 

The general goal of advertising is to increase sales, either immediately or in the future, and to do so profitably. Hence the function of advertising is to inform customers of goods or services and influence people's behaviour.

Goals of advertising are not limited to trying to influence customers; the process of motivating employees and distributors may be fully as important. The impact of company advertising on its employees and particularly its sales force is not always recognized, but can be a very positive effect as they can see that the company is supporting their efforts, and this generally makes their selling job easier.

So, if advertising efforts are to be effectively planned, directed, and evaluated, more specific goals should be established, such as:

• Build morale of a company sales force.

• Announce a special reason for "buying now" (e.g., reduced prices, premiums, limited quantities).

• Reach people inaccessible to salespeople, such as top business executives and professional people.

• Enter a new geographic market or attract a new group of customers.

• Build familiarity and easy recognition of package or trademark.

• Correct false impressions, misinformation, and other obstacles to sales.

• Introduce a new product or a new price schedule.

• Build goodwill for the company and improve its reputation.

• Place the advertiser in a position to select preferred distributors or dealers.

Advertising can be classified into two broad categories: informative and persuasive. Typically any advert contains elements of both. When a product is first launched, sales are low because very few customers are aware that it exists. The role of advertising here may be to inform the public of the product's existence and its particular uses. The same applies when the product has been modified or improved. In some cases, e.g. new cars or scientific calculators, the nature of the product may be such that a large amount of technical information has to be supplied and advertising again may have to be informative. Advertising that informs and educates consumers gives them greater choice in their selection of goods and services. It can be seen as a form of competition between firms and may encourage manufacturers to improve their products to the benefit of the consumer.

Persuasive advertising, as its name implies, is used to try and persuade a consumer to buy a particular product. Such advertising is subjective and contains many statements of opinion rather than fact, e.g. "Carlsberg — the best lager in the world". Persuasive advertising is normally associated with consumer products and is used heavily where differences between products are minor, e.g. toothpaste, baked beans, soap powder, washing liquids and lager. Persuasive advertising has been criticized but nevertheless by 1982, about $60 billion a year was being spent for this kind of advertising in the United States. One of the main drawbacks of persuasive advertising is that it emphasizes the advantages of a product and attempts to make those who do not use the product feel as if they are missing out. It plays on jealousy, envy and 'keeping up with the Joneses'.

There are a number of regulations that control the content of advertisements and firms are required to follow the British Code of Advertising Practice. Some important extracts from this code are:

1. All advertisements should be legal, decent, honest and truthful.

2. All advertisements should be prepared with a sense of responsibility to the consumer.

3. All advertisements should conform to the principles of fair competition as generally accepted in business.

4. No advertisement should bring advertising into disrepute or reduce confidence in advertising as a service to industry and to the public.

The major management problems having to do with advertising are how much money to spend, how to allocate it, how to schedule the advertising, and how to measure its effectiveness.

Once the firm has decided on running the advertising campaign it must then decide on the message, the mass media and the receiver. All these factors will be linked. It could be that the receiver — the so-called target audience — will determine the message and the media. If, for example, the product is a children's toy, the advert should be placed on television at particular times of the day.

In designing the message the advertiser will need to consider the following:

1. The content of the message: this will depend on the type of product and the market in which it is to be sold.

2. Who is the receiver? The message may be directed at a particular group of the population, in which case it may have to be delivered in a particular way using a certain media.

3. The person used to send the message: very often large firms use celebrities that they think are appropriate for the product.

4. The timing and number of messages: an advertiser has a choice between two approaches to an advertising campaign. It can be extensive, where the object is to reach as wide an audience as possible using different media. On the other hand, it can be intensive, where the object is to reach a particular group repeatedly (e.g. products such as lager, coffee, washing powder and toilet rolls are advertised intensively on television).

Having decided on the message, the advertiser then has to choose the most cost-effective medium (or media). This means choosing the medium that delivers the message to the right (and largest) audience at the lowest possible cost. Examples of the media available are: commercial television, independent local radio, newspapers, magazines, billboards, buses, trains and bus shelters. For a firm advertising an industrial product the choice may be limited to exhibitions, specialist magazines and direct mail.

 

advertising efforts	рекламная деятельность
allocate v	распределять средства
be aware of	знать, сознавать, быть осведомленным
British Code of Advertising Practice	Британский свод правил, регулирующий рекламную деятельность
build familiarity	создавать осведомленность
build morale	укрепить боевой дух
conform to v	соответствовать чему-л.
cost-effective adj	доходный, прибыльный, рентабельный
decent adj	приличный, благопристойный
decide on v	выбрать
direct mail	почтовая реклама
disrepute n	дурная слава; плохая, сомнительная репутация
drawback n	недостаток
goal n	задача, цель
goodwill n	доброжелательность
impact n	сильное воздействие; влияние
increase sales	увеличить объем продаж
informative adj	информативный
keep up with the Joneses	быть не хуже других людей
launch v	выпускать (товар) на рынок
legal adj	законный; легальный
mass media	средства массовой информации
medium n sing (pl media)	средство, метод
message n	рекламное сообщение
miss out v	упустить
persuasive adj	увещевательный, убеждающий
place in a position to do smth	дать возможность делать что-л.
price schedule	шкала цен
recognition n	узнавание
run the advertising campaign	проводить рекламную кампанию
sales force	продавцы
schedule v	составлять график, планировать
sense of responsibility	чувство ответственности
target audience	целевая аудитория
trademark n	торговая марка

 

ADVERTISING MEDIA

 

The function of advertising is to inform and influence people's behaviour, as the general goal of advertising is to increase sales.

The major media used for advertising are newspapers, television, direct mail, magazines, and radio. Each has strengths and weaknesses. Let us now examine the advantages and limitations of the various media.

Newspapers

The typical newspaper circulates in a limited and well-defined area, and this offers advantages to the advertiser interested in geographical selectivity. Since almost everyone reads the newspaper, an intense coverage of the local market can be obtained. Newspapers offer great flexibility because ads can be inserted or removed with only a few days' notice; this makes it feasible to feature prices in most newspaper ads. Circulation costs are low, and because most metropolitan areas have daily newspapers, messages can be presented frequently. But there are several significant limitations to newspaper ads. The paper has a short life — nothing is quite so stale as old news — so it is not likely that advertising will have much influence beyond the day of publication. Newspapers are hastily read, most studies indicate that the average reader spends between 20 and 30 minutes on the paper. Therefore, a message has to make an impression quickly or not at all. Finally, newspapers, being printed on pulp paper, do not have the quality of reproduction and colour that can be achieved in magazine ads. This can be a disadvantage for some car and food ads where the illustration has an important role to play.

Magazines

Although magazines now rank only fifth among the media in total dollar revenue, more manufacturers advertise rather in magazines than in any other medium. A particular advantage of magazines is their selective readership: most magazines appeal to some groups and not to others, such as magazines on hunting and fishing, skiing, jogging, automobiles, etc. A manufacturer can direct a message to the segment of the total market that represents the most potential and thereby have a minimum of waste circulation; in other words, the various specialized magazines enhance a selective market segmentation strategy. Magazines also offer a high degree of geographic selectivity.

Magazines are read in a leisurely fashion, compared with newspapers. Some, such as National Geographic and Fortune, may be kept for years. They are often found in doctors' and 'business' reception rooms, and thereby have a much wider readership than circulation figures would indicate. Most magazines are printed on good paper and provide excellent colour ads. But there are some limitations. Magazines lack flexibility: changes cannot be made for several weeks before publication date — a factor that discourages the use of price in most ads. The infrequency with which magazines reach the market, compared with other media, can also be a drawback.

Direct Mail

Direct mail permits the most selectivity of any media because it reaches only that part of the market the advertiser wishes to contact. It is more personal than other media. It has the greatest flexibility; messages can be tailored to the particular characteristics of the audience. Also, best timing can be assured. A mailing list is a vital part of the direct-mail campaign because the people addressed should really be prospects. A firm may compile its own list from company records, or lists can be bought for almost any category of customer imaginable.

Direct mail offers particular advantages to smaller firms that cannot afford mass media advertising because they need spend only what they can afford or have productive capacity to handle. You can see how the quality of the mailing list, the extent of duplication and the accuracy of addresses, is important. As there is no editorial or entertainment material, much direct mail material is thrown away without even being opened.

Television

Television has grown the most rapidly of the major media. It offers the great advantage of appealing through both the eye and the ear and thereby permits demonstration as well as explanation. It offers tremendous impact; millions can be viewing a program and its commercials at one time.

On the other hand, television is extremely costly. A 30-second commercial on a top-rated network program can cost more than $100,000. Added to this are the costs of developing a commercial — rehearsals, filming, reshooting, dubbing, scoring, animation, printing — and these can add up to many more thousands. However, TV spot costs for a single station, as contrasted with network coverage for all stations, can vary widely and even cost as little as $100 for some shows with lower audience ratings.

It is apparent that TV is most attractive to low-price, repeat sale, mostly convenience goods manufacturers while magazines are strong with distillers and tobacco companies (who are banned from TV and radio). The automobile manufacturers use both media.

Radio

TV did not quite kill radio, as many had predicted. It reaches audiences at low cost: a spot announcement may cost as little as $10. It is very flexible geographically, so that a national firm can pick the areas where it wants to concentrate efforts. The commercial itself can be changed up to broadcast time. Market segmentation is facilitated because many stations concentrate on particular audiences, such as teenagers, country music devotees, classical music enthusiasts, etc. However, radio audiences tend to be extremely fragmented, with many radio stations competing in most areas. Radio shares another disadvantage with TV: the transient nature of any presentation — the message is not available for reference or for rereading.

Outdoor or Billboard

Although only one percent of total advertising expenditures are used for billboards, this medium has been heavily criticized by those concerned with beautifying the nation's highways and by some safety advocates who think such advertising is distracting. It is a highly flexible, low-cost medium and is excellent for reminder advertising. However, copy must be limited and much detail avoided if the message is to be comprehended in the brief period of passing the sign. Usually there is substantial waste circulation so that costs per prospect may be quite high. The automobile companies have been the major users of outdoor advertising.

Advertising has been subject to considerable criticism. Yet, few firms can afford not to do some advertising. Despite the criticisms of advertising, we are far better off with it.

accuracy n точность

ad = advertisement

advantage n преимущество

advertising media средства рекламы

advocate n защитник; сторонник (точки зрения, метода, образа жизни)

appeal v призывать, обращаться

ban налагать запрет, запрещать

be better off жить лучше (материально)

better off состоятельный

billboard n рекламный щит, афиша

broadcast time эфирное время, время вещания

circulation n тираж (газет, журналов), распространение (информации, изданий и т.п.)

circulation costs расходы на сбыт тиража

commercial радио- или телереклама

coverage n освещение в печати, по радио и т.п.

direct mail прямая почтовая рассылка

disadvantage n недостаток

drawback n недостаток, отрицательная сторона

dub v озвучивать (фильм, передачу и т.д.)

enhance v увеличивать, усиливать, улучшать

facilitate v облегчать, содействовать

feasible реальный, выполнимый, осуществимый (о замысле, плане и т.п.)

flexibility n гибкость

frequently adv часто

geographical selectivity территориальная избирательность

impact n влияние, воздействие

limitations ограничивающие обстоятельства

mailing list лист рассылки, список рассылки (список лиц, которым регулярно отправляют рекламные проспекты, приглашения и т.д.)

market segmentation сегментирование рынка

market segmentation strategy стратегия сегментации рынка

mass media средства массовой информации

medium n (pl media) способ, средство

outdoor advertising наружная реклама

pulp paper мягкая, дешевая бумага

quality of reproduction качество воспроизведения и цвета (при печати)

readership n круг читателей

reminder advertising напоминающая реклама

safety advocates сторонники безопасности движения

scoring n озвучивание

selective adj выборочный, отборный, избирательный

selective readership определенный круг читателей