Rent is paid for the use of equipment or an apartment. A commission is remitted to an agent for the sale of real estate. Dues are paid for membership in a club or group. A deposit is made to hold or lay away merchandise. A tip helps pay waitresses or waiters for their services. Interest is charged for the loan that you obtain, and taxes are paid for government services. Scientists are paid honorariums for research papers they write, and authors of bestsellers are paid royalties by their publishers. The value of many products is called price. Although price may be expressed in many different ways, it is important to remember that the purpose of this concept is to quantify and express the value of the items in the market exchange.

Source: Marketing. Concepts and Strategies. 6th edition.

William M. Pride and O.C. Ferrell,

Houghton Mifflin Company, 1989, p. 562.

Exercise 3*. Find in the text 8 English equivalents of the Russian words «цель», «задача» and make sentences of your own using them.

Exercise 4*. Fill in the blanks using terms given below.

The Product Life Cycle

A new product……… through a sequence of stages from introduction to growth, maturity, and decline. This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the……….. and the…………

Introduction Stage

The firm seeks to build………. and develop a market for the product. The impact on the marketing mix is as follows:

– Product………. and quality level is established, and intellectual property protection such as……… and……….. are obtained.

– Pricing may be………… to build………. rapidly, or………… to recover…………..

– Place (distribution) is………. until consumers show acceptance of the product.

– Promotion is aimed at……… and………. Marketing………… seek to build product awareness and to educate potential consumers about the product.

Growth Stage

The firm seeks to build………….. and increase market share.

– Product quality is maintained and additional……….. and support services may be added.

– Pricing is maintained as the firm enjoys increasing……… with little competition.

– Place (distribution channels) are added as demand increases and customers accept the product.

– Promotion is aimed at broader………

Maturity Stage

The strong growth in sales……… Competition may appear with similar products. The primary………. at this point is to defend market share while……… profit.

– Product features may be enhanced to……… the product from that of competitors.

– Pricing may be lower because of new competition.

– Place (distribution) becomes more intensive and………. may be offered to encourage preference over competing products.

– Promotion ……… on product differentiation.

Decline Stage

As sales decline, the firm has several options:

–……… the product, possibly rejuvenating it by adding new features and finding new uses.

–Harvest the product —………. and continue to offer it, possibly to a…………

–……… the product, liquidating remaining……….. or selling it to another firm that is willing to continue the product.

The marketing mix decisions in the decline phase will depend on the selected strategy. For example, the price may be maintained if the product is harvested, or reduced drastically if liquidated.

Source: www.quickmba.com

Terms:

inventory, discontinue, market share, loyal niche segment, low penetration pricing, objective, incentives, diminishes, differentiate, trademarks, marketing mix, product awareness, branding, patents, high «skimming» pricing, selective, early adopters, brand preference, demand, maximizing, reduce costs, progresses, marketing strategy, development costs, audience, features, maintain, focuses, сommunications