13. Arrange the sentences according to the text.

1. To maintain the status quo is especially true for industries where price stability is important.

2. The firm must set pricing objectives which correspond organizational and marketing objectives before they set a price.

3. There may be: survival, profit maximization, target return on investment, market share and status quo.

4. Besides the objective of making profit there may be other goals, necessary to achieve.

5. To survive a firm may cut its price, but only for a short-term period as it is impossible to operate at a loss consistently.

6. Some firms set such pricing goals as target return on investment and market share.

7. To maximize profit the firm must express this goal in specific money amounts or percentage increases over previous profits.

14. Formulate the theme of each paragraph and make up a plan of the text.

15. Say what you have learnt about the pricing objectives.

1. Read and translate the text “Product Life Cycle”. Text e. Product Life Cycle

In a way, products are like people. They are born, they live, and they die. Every product progresses through a pro­duct life cycle, which is a series of stages in which its sales revenue and profit increase, reach a peak, and then de­cline. A firm must be able to launch, modify, and delete products in response to changes in product life cycles. Otherwise, the firm's profit will disappear and the firm will fail. Depending on the product, life cycle stages will vary in length.

Generally the product life cycle consists of four stages — introduction, growth, maturity, and decline. Some products go through these stages rapidly, in a few weeks or months. Others may take years to go through each stage.

1. Introduction. In the introduction stage, customer awareness and acceptance of the product are low. Sales rise gradually, but initially high marketing costs result in low profit, or even in a loss. There are relatively few competitors. The price is sometimes high, and purchasers are primarily people who want to be “the first” to own the new product. The marketing challenge at this stage is to make potential customers aware of the product' s existence and its features, benefits, and uses.

A new product is seldom an immediate success. Marketers must be prepared to modify the new product if necessary. The product should be priced so as to attract the particular market segment that has the greatest desire and ability to buy the product. The product itself, the initial price, distribution channels, and promotional efforts must be adjusted quickly to maintain sales growth during the introduction stage.

2. Growth. In the growth stage, sales increase rapidly as the pro­duct becomes well known. Other firms have probably begun to market competing products. The competition and lower unit costs (due to mass production) result in a lower price, which reduces the profit per unit. Note that profits reach a peak and begin to decline during this stage. To meet the needs of the growing market, the firm offers modified versions of its product and expands its distribution.

Management's goal in the growth stage is to stabilize and strengthen the product's position. To beat the competition, the company may further improve the product or expand the product line to attract specialized market segments. Management may also compete by lowering prices if increased production efficiency has resulted in savings for the company. As the product becomes more widely accepted, marketers may be able to broaden the network of distributors. During this period it is necessary to build brand loyalty among customers.

3. Maturity. Sales are still increasing all the beginning of the matu­rity stage, but the rate of increase has slowed. Later in this stage the sales curve peaks and begins to decline. Pro­fits decline throughout this stage. Product lines are simpli­fied, markets are segmented more carefully, and price competition increases. The increased competition forces weaker competitors to leave the industry. Refinements and extensions of the original product appear on the market.

During a product's maturity stage, its market share may be strengthened by redesigned packaging or style changes. Pricing strategies are flexible during this stage. Markdowns and price incentives are not uncommon, although price increases to offset production and distribution costs may be used as well.

4. Decline. During the decline stage, sales volume decreases sharply. Profits continue to fall. The number of competing firms declines, and only survivors in the marketplace are those firms that specialize in marketing the product. Produc­tion and marketing costs become the most important determinant of profit.

When a product adds to the success of the overall pro­duct line, the company may retain it; otherwise, management must determine when to eliminate the product A product usually declines because of technological advances or environmental factors, or because consumer have switched to competing brands. Therefore, few changes are made in the product itself during this stage. Instead, management may raise the price to cover costs, re-price to maintain market share, or lower the price to reduce inventory. Similarly, management will narrow distribution of the declining product to the most profitable existing markets. During this period the firm may use advertising and sales incentives to slow the product's decline. The company may eliminate less profitable versions of the product from the product line and, eventually, may decide to drop the product entirely.

Using the Product Life Cycle. Marketers should know the life-cycle stage of each product. And they should try to estimate how long they may remain in that stage. Both must be taken into account in making decisions about the marketing strategy for a product. If a product can remain in the maturity stage for a long time, a replacement product might be introduced later in the maturity stage. If the maturity is short, a new product should be introduced much earlier. In some cases, a firm may be willing to speed up the decline of existing products. In other situations, a company will attempt to extend a product's life cycle.