7. Insert prepositions.

The pricing objectives chosen will tend to reflect general corporate objectives. … instance, a firm which intends to become the dominant market leader … the next five years will clearly adopt very different pricing objectives … a firm which is quite content with continued gradual growth. … practice, firms tend to pursue a combination of objectives rather than a single objective. Nor do these objectives remain static … long. Competitors’ activities and the ever increasing pace of technological progress means that objectives are constantly revised … line … changing conditions.

Profits can be made … two different ways. Firms which sell their products and services … low prices can make profits even though the profit margin on each item is small, providing a high sales volume is generated … a large turnover of goods sold.

Firms which sell their products and services … high prices can make profits because the high profit margin on each item compensates … a lower overall turnover.

Whatever approach is adopted, it is worth remembering that firms are not necessarily preoccupied … making larger profits. Much research … recent years has questioned the underlying basis … conventional price theory which assumes that profit maximization is the sole aim … every firm. If anything, evidence suggests that survival is now more likely to be the major preoccupation … the marketplace of the 1990s.

A common pricing objective for firms is to achieve a specified level of income as a return on investment (ROI). … other words, they aim to get back a certain proportion of the money they have invested … land, buildings, machinery and stock or which has been held as capital.

Answer the questions.

1. What are the two ways of making profit?

2. What is the common pricing objective for firms?

8. A) From the text write out sentences with the Complex Subject. Translate them into Russian.

b) Translate the sentences into Russian. Mind the Complex Subject.

1. The company is said to be losing a lot of money.

2. Firms are assumed to know what quantity of each product they would sell.

3. Consumers are assumed to be aware of all the goods and services they could buy.

4. A small firm is likely to be specializing in one product.

5. The larger firm is likely to have a diversified market structure.

6. Since that time the market share of these larger companies does not seem to have increased.

9. Find in the text the words which describe or mean the following.

• an area or country where there is a demand for goods;

• an act or action of using money to make money out of something that will increase in value;

• any of the equal parts into which the ownership of a company may be divided;

• the existing state of affairs;

• the fact or likelihood of continuing to live.

10. In the text find definitions of:

• target return on investment;

• market share.

11. Answer the questions.

1. What must a firm decide before setting prices?

2. Why is it necessary to set pricing objectives?

3. What may the firms’ primary objectives of pricing be?

4. What is a firm’s aim if it cuts price to attract customers?

5. Which goal is impossible to achieve and why?

6. What is ROI?

7. What is a firm’s market share?

8. When does a firm set the objective of status quo pricing?

12. Agree or disagree. Correct wrong statements.

1. Before setting price a firm must define pricing objectives which are in line with organizational and marketing objectives.

2. The only primary objective of pricing is to make a profit.

3. The firm cuts its price when it wishes to maximize profit.

4. Operating at a loss is impossible on a long-term basis.

5. It is very easy to define and achieve the goal of maximizing profit.

6. Target return on investment and market share are one of the possible pricing objectives.

7. To maintain the status quo is the primary objective for all firms and industries.