Unit 5 - World of Business small
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12. Reading
Read the articles and answer the questions that follow
Article a
Guzzling on the hoof costs Britons £1 billion a year
We eat on the run, grazing through packet after packet of crisps, nuts, savouries. James Erlichman questions the move to 'healthier' snacks.
‘I’m afraid gunk won,’ she said. ‘We tried to sell an additive-free range of snacks to children, but they just didn't like the taste. So we put the additives back and sales soared.’ The words were spoken by Ann Charlesworth of Derwent Valley Foods, - the perky little is outfit from County Durham which launched the highly successful range of Phileas Fogg snacks six years ago.
Phileas Fogg broke all the rules. They came in exotic flavours, were aimed at adults, had no 'see-through' window on the packets, were backed by virtually no advertising and cost, by ordinary crisp standards, a ludicrous amount. Unlike the children's range, they contained no artificial ingredients.
Lines like Tortilla Chips and Shanghai Nuts were such a hit that the company, built at Consett in the shadow of the former British Steel works, has virtually doubled its employees to 180, and enjoys sales £11 million a year. A perfect Thatcher tableau, some might say. Men who used to make steel for motor cars, now making garlic flavoured Mignons Morceaux for the coffee table.
But they still could not devise a natural snack pleasing to the jaded palate of the nation's junk fed youth.
The mainstream snack market is enormous and still growing. This year Britons will munch their way through more than £1 billion worth of savoury snacks. That includes 5.1 billion packets of so crisps - or nearly 100 for each man, woman and child Next come the 2.2 billion packets of extruded and reconstituted hoops, rings and thingamajigs made from maize, wheat and potato flour. We will also consume nearly 79 million pounds of assorted nuts worth £120 million.
All this puts Phileas Fogg's sales in perspective. Indeed, the snacks industry is dominated by some very big companies.
The total sales figures come from KP, the division of United Biscuits, which claims to be the biggest player in the league with 24 per cent of the total UK snack market. But rival Nabisco, the US company, with its four separate divisions - Smiths, Walkers, Tudor and Planters - owns 35 per cent of the British market. The only other company in the big league is Golden Wonder, now owned by Dalgety, which is best known for crisps and has just under 13 per cent of the market.
The big companies have been doing their best to suggest that snacks are part of healthy living. Snacma - the Snack, Nut and Crisp Manufacturers' Association - sponsors symposia on nutrition. One of its, consultants, Professor Donald Naismith, has even got himself into an imbroglio with the British Medical Association after, claiming that crisps had a useful part to play in a balanced diet.
KP claims: that the British family 'no longer lives as a single unit, but spends its time – including eating time – as a collection of individuals.’
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We eat on the run, on average six and a half times a day, grazing through packet after packet of crisps, nuts and savouries.
'This', concludes KP, 'is good news for the snack food manufacturers.'
But is it good news for the national health? Some additives have been taken out of snacks - particularly out of plain crisps which often now contain only potatoes, vegetable oil and salt. But the snack makers have adopted what could be seen as the crafty no posture of prominently 'flagging' the additives they have removed.
Claims that products are free from artificial colouring fail to mention the antioxidants (E320, E321) and, the monosodium glutamate (E621) that remain.
Another 'line extension', as the industry describes new product ideas is the 'jacket crisp' which is cooked with its peel left on.
But, 'It is ludicrous nonsense to suggest that these are better for you just because the peel might add 1 per cent more fibre,' says Issy Cole-Hamilton, a dietician at the London Food Commission.
The biggest problem which snacks face is the number of calories they pack into every bite. Even the lower fat crisp is still too fattening.
On the cover of Private Eye Magazine this month an overweight working class woman stands talking to the Prime Minister. ‘I reckon I'll lose four pounds,' she says in obvious reference to the social security changes. Intentionally misunderstanding, Mrs. Thatcher replies: 'You should lose a stone*, you great tub of lard.'
It is easy enough in a snacking nation to be poor and overweight. A packet of crisps offers ten calories for every penny spent. That translates to early obesity on under £3 a day.
(James Erlichman, The Guardian)
Article b
World of flavour on old steel site
When Roger McKechnie first visited the Newcastle upon Tyne office of 3i, the venture capital group, Phileas Fogg was just an idea, dreamt up over a beer in a Newcastle pub. Yet 3i stumped up £50,000 for a worldwide search for exotic snacks.
McKechnie and his colleagues collected hundreds of snacks, from the Far East to Mexico. They eventually started production of Phileas Fogg corn chips at their first Derwent Valley Foods factory, a hut next to the abandoned steelworks at Consett, County Durham.
That was in 1982. Last year the company, with a turnover approaching £7m, won the CBI's business enterprise award. Today it opens a £1.2m extension to a modem factory that will double capacity now running at about 2.5 million chips a day.
The new factory is a stone's throw from the site of the old steelworks, which closed in 1980. Many of Derwent Valley's 130 employees are former steelworkers; but instead of molten metal, they now work amid the whiff of spices, preparing snacks for the finest of cocktail parties.
Under the label 'Phileas Fogg – Fine Foods From Around the World', Derwent Valley has created a new market in healthier, adult-oriented snacks.
'Back in 1982 the snack industry was focused on nine-to-fifteen-year-old kids,' says McKechnie, the company chairman and managing director. 'At first we didn't know what
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our exotic products were going to be, but we knew they existed outside the UK and could be manufactured here.'
With the backing of 3i, McKechnie and three fellow directors, Ray McGhee, Keith Gill and John Pike, had put up £50,000-of their own money, and raised £400,000, some of it from British Steel. About £500,000 in additional finance was later provided by 3i, which has a 30% shareholding.
All four directors had experience in the savoury snack industry, which is reckoned to be worth almost £1 billion a year, and knew there was a niche for a quick-moving small firm. 'We knew that the industry was dominated by bureaucratic dinosaurs,' says McKechnie.
The first products were tortilla chips and Californian com chips. Heavy advertising spending stressed Phileas Fogg, the Jules Verne character who went around the world in 80 days.
'When we started up we wondered whether we'd ever get into the big retailers,' says McKechnie. 'But they were all enthusiastic. We seemed to be offering them something they'd been wanting for quite a long time,' The company now supplies most of the leading food stores, including Marks & Spencer, Salisbury and Tesco.
In 1984, disaster almost struck when the company over-expanded and ran into cash problems. No one knew it, but the evening after Prince Charles visited the factory in October 1984, the four directors had to rush to a crisis meeting to prevent the plug being pulled on the business by Barclays Bank, one of the backers.
A new product, Punjab Puri, is now coming to the shops, bringing the number of snacks to ten. Company profits are running at more than £500,000 a year, and sales are almost doubling every year.
But the big snack manufacturers are catching on to the fact that up-market snacks make money. Are they a threat?
'We've got a four-year start,' says McKechnie, 'We'd have worried about it far more in the early days than we do now.'
Ian Williams, The Sunday Times
1.How, when and where was Derwent Valley Foods founded?
2.What was the traditional industry in the area where the company was founded? What effect did this have?
3.Who are the directors?
4.What range of products do they market?
5.What are the special features of the product?
6.What features of their marketing have been unusual?
7.What was the initial advertising gimmick?
8.How was the company financed when it was set up?
9.How difficult was it for the product to establish a market niche?
10.What problem was encountered in 1984?
11.How many products are now marketed?
12.How big is the labour force?
13.What is the current turnover? And profits?
14.What has been the reaction to the company of the established leaders in their field?
15.How do sales of Phileas Fogg products compare with sales in the mainstream market?
16.What does the consumption of snacks tell you about British eating habits?
17.How healthy is it to eat snacks?
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13.Using the information you have gained from the texts and the questions, write a history of the company, Derwent Valley Foods, using not more than 150 words.
14.Discuss with a partner:
Street traders: what do they sell?
What status do they have?
What techniques do they use to attract attention?
How do they achieve a sale?
15. Read the following text and see how one particular street trader operates
Twirling the Edge
Fraz was a VIP at all the local nightclubs. He had plenty of money, and he wasn't exactly ostentatious, just not very careful about how he unrolled his notes. He always bought plenty of drinks, which, if not a good sign, is a sign nonetheless.
So one day, I was more than a little surprised to see Fraz on the pavement in Fargate in Sheffield selling furry toys. The spot was a few hundred yards from his favourite nightclub, and he wasn't even trying to conceal himself. Quite the opposite: he'd gathered a large crowd around him, and was entertaining them with his spiel. More than entertaining them, the furry dogs were going like hot cakes.
I faced the existential dilemma as to whether I should skulk off without acknowledging him, and not throw into question his alternative persona, or buy a furry dog. They were only a quid after all, and, as Fraz assured us, they were the self same furry dogs that were sold in Hamleys* and the current favourites of the Royal Princes.
But I didn't want to embarrass him, and I was just about to slink off when he caught my eye. Instead of registering embarrassment he called me over and I became the focus of his spiel. 'Here's an Irish psychologist (chuckle, chuckle) come all the way from Belfast to learn how to sell furry animals. By the way, did you hear the one about the Irish clockwork mouse …’ He was working the crowd, and using me as the straight man. I was frozen with embarrassment as he burst into song.
I learned several lessons that day. One was that guys who can spiel in a market, even fly pitchers like Fraz, are extremely proud of their abilities and their status. On a scale of social prestige of occupations - from some angles - they come out above waiters and, dare I say, psychologists, and on a par with nightclub proprietors.
Fraz had a mastery of language and techniques for selling and handling people. He described his ability as a natural gift. Researchers investigating the techniques actually employed by market pitchers have been clearly impressed by the complexity and skill involved in their communication with their customers.
Market pitchers are those market traders who explicitly rely upon their spiel to sell their products. Pitchers refer to other silent traders as 'gazers' or 'lurkers'. They may shout out the price of goods but their repetitive use of language doesn't make them pitchers. Pitchers are the cream.
They feel they have generally had a bad press, that the media and the public think they are more than a bit dodgy, and that their apparently successful selling routines rely on
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the presence of a large number of plants in the audience. But the use of these plants, or 'ricks' as they are called, is a lot less widespread than is popularly imagined.
The first step to success is 'pulling a pitch': that is, building a large audience. But an attentive audience is not enough. The audience has to be made to feel some obligation to buy the goods-on offer. Getting them to move right into the stall is one way this is managed. Sometimes there is prolonged handling of the goods so that more people will see the one punter making the purchase. This is known as twirling the edge. A central feature is that the audience cannot buy the goods just anywhere in the pitcher's spiel, but only at certain prescribed points. These points are preceded by an announcement of the selling price.
Pitchers work on the contrast between the worth of the goods on offer and the selling price; they accentuate the contrast by building up the apparent worth using a list format. The audience meanwhile may be a little puzzled by this. Is there a catch? Pitchers routinely try to forestall such thinking by explicitly assuring the audience before they have had a chance to raise their own doubts.
The spiel is very reminiscent of another type of rhetoric, that of political speeches. Oh, yes, there are enough tricks pulled at party conferences to put even the most dubious market pitchers to shame.
Geoffrey Beattie, The Guardian
16.Basing your answers on the text, decide whether the following statements are true or false
1.In the nightclub, Fraz wanted everyone to see how well off he was.
2.When the writer saw Fraz at work, he expected him to be embarrassed.
3.Fraz's reaction to the writer was to involve him in his sales pitch.
4.The writer considered that Fraz's skills came naturally.
5.A pitcher is different from a gazer in that he shouts louder.
6.Pitchers consider that the public has the right idea about them.
7.The first step in getting someone to buy is to build a large attentive audience of passers-by.
8.Without a feeling of obligation, people would not buy from a pitcher.
9.The pitcher determines when goods may be bought.
10.Audiences are suspicious of the source and value of the goods sold by the pitcher.
17. Answer the following questions
1.What was Fraz's use of notes a sign of?
2.What does the writer convey by using the phrase 'wasn't even trying to conceal himself’ (line 15)?
3.What's the meaning of 'not throw into question his alternative persona' (lines 25-26)?
4.What made the furry dogs attractive-to buyers?
5.How did the writer feel when Fraz called him over?
6.What did, the writer admire about Fraz?
18. In a summary of not more than 100 words, describe the sales technique of the pitcher
19. Running a Business |
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Before reading the text considerthe following questions:
What qualities do you think are necessary when people do business together?
Is a contract more important than trust?
Now read the text and answer the questions which follow
My Biggest Mistake
William Sargent, 35, is chairman of Spitting Image productions and Managing Director of Viva Pictures. He became a financier in the television industry after taking a degree in business and legal studies at Trinity College, Dublin. In 1985, he founded The Frame Store, one of London's leading digital video post-production facilities. Recently he has put together more than £ 15m of funding for European programming, and acted as executive producer on Prix Italia winners and British Academy nominees.
'My biggest mistake was trying to do business on the strength of a handshake without doing my research first. In 1983, I had just sold a company which distributed video equipment around Europe, and I was looking for new opportunities. Quite idealistically, I decided I should be trying to put something back into Ireland, where I come from. I had run three businesses while I was at college to pay for my education, so I knew my way around. And over the next two years, I attempted to set up three partnerships. On each occasion I did so without a contract. It cost me around £100,000.
The first two cases involved importing various video-related goods. On both occasions they refused to pay the agreed price on delivery. Both sets of people reckoned they could renegotiate the package because the goods were already in the country. And because I had paid the freight bills to get them there, I didn't really have the option of shipping them back again. On the third attempt, the problem was that both the people selling the equipment and the potential customers were never honest with us in terms of their ability to pay. Instead of a business, we had a number of people saying they could do things which they couldn't, and at the point when I owed £40,000 to the Irish banks, I called it a day. I paid the money back, but as a result, when we started The Frame Store, my wife and I didn't have the capital to take a big enough stake. It went on to become one of the most successful companies in the industry, and in order to own the 'stake we deserved, we really had to pay for it.
Funnily enough, I still do business on a handshake. I never want to go into business on my own: I always look for a partner. I have neither the aptitude nor the desire to run a business on a day-to-day level. I work as a strategist, identifying opportunities and creating relationships, preferably in niche markets. If you're going to make money in the long-term, you've got to stick with someone you trust, because you don't control the chequebook and therefore you can be fiddled. After five years, it could cost you a substantial amount of money, so you might as well find out in the first twelve months if that trust is going to be betrayed. Trying to enforce contracts only creates ulcers; it's virtually impossible. If, instead, you recognise that you're never going to get what you set out to get or that you made a mistake, you save yourself a lot of angst. On that basis, I decided quite early on that I would try to do business with people on trust. Most times it works ...
The Germans and the Japanese understand long-term partnerships. They're not in it for
this year's deal. That is the reason for doing business on a handshake. It is an incentive for
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the person to mislead you; so you find out in time that you shouldn't be in partnership. No one person has all the skills to create a successful business. It has to be a team effort. I've learnt to spend a lot more time on research before entering a partnership. You have to be partners in spirit, not in contract. And if the partnership can't be based on a handshake, then when the pressure is on, your business will fall apart.'
(William Sargent, The Independent on Sunday)
20.Choose the best answer to the following questions
1.William Sargent's biggest mistake was
A.overstretching himself financially. B.trusting unreliable partners.
C.failing to investigate the situation thoroughly.
D.running too many ventures at the same time.
2.When the goods had been delivered, what did his first two partners do?
A.Pressed for an early delivery date.
B.Refused to pay the shipping costs.
C.Attempted to impose alternative terms.
D.Expressed concern about the style of packaging
3.What problem existed after William and his wife had set up The Frame Store?
A. The bank was pressing them for payment.
B.The company's development costs were higher than anticipated.
C.Shortage of funds slowed down the rate of development.
D.They had to pay to increase their holding.
4.What observation does William Sargent make about his way of doing business?
A.He is reluctant to trust colleagues, responsibilities. B.He dislikes administration.
C.He needs moral support from a partner.
D.He hates worrying about finance.
5.For William Sargent, the key factor in a partnership is
A.a binding legal agreement.
B.the possibility of switching roles and.
C.a shared vision of the project's goal.
D.the ability to withstand pressure.
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21.Listening
1.Starting your own business
Simon describes the stages by which he and a partner set up a business importing and selling wine. Complete the missing stages in the plan. Write a summary of the tape.
1.They drove to France and brought back wine in their car.
2.In response to demand from friends for wine, they decided to expand.
3.…………………………………………………………………………………………………… .
4.…………………………………………………………………………………………………… .
5.They presented the bank with a business plan, asked for and received a loan.
6.They decided to use a transport company.
7.They produced and distributed a list.
8.………………………………………………………………………………………………….. .
9.…………………………………………………………………………………………………… .
10.…………………………………………………………………………………………............... .
11.They expect to be self-financing by the end of the third year.
2.Door-to-door Selling
Read the following text but do not attempt to fill the gaps until you have listened to the tape. Then complete the text with a suitable word or phrase according to the information on the tape.
Bryan thinks that door-to-door selling has ………………. (1) in recent years. He himself has a rather ………………. (2) opinion of the people who do this, believing they have a reputation for ……………………… (3). He also believes that you are unlikely to get a
…………………….. (4) deal from this type of sale. For major purchases, such as
……………………… (5) or a new ………………. (6), he himself would definitely not be tempted by this type of selling, but would go to a ……………….. (7). The only time he would be tempted to buy goods in this way would be in order to support a …………………………………..
(8).
3. The ice-cream salesman
Choose the best answer to the following' questions, according to the information on the tape.
1.People who sold ice-cream in the parks were
A. conspicuous for their honesty. B. totally dishonest.
C. adept at exploiting the system.
D. scared of being found to be dishonest.
2.There were lots of people in the park on that particular occasion because
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A.the weather was sunny.
B.a concert was going to take place.
C.the playing of the band attracted them.
D.it was a good place to relax.
3.The fact that the park was so crowded meant that
A.the narrator couldn't park the lorry where he wanted.
B.the ice-cream sellers couldn't get to the lorry.
C.everyone selling ice-cream felt irritated.
D.there was a danger of people getting crushed.
4.People queued at the back of the lorry because
A.they thought this was the place to buy ice-cream.
B.they thought the ice-cream sold there would taste better.
C.they couldn't reach the other ice-cream sellers.
D.they didn't want to be seen.
5.The dilemma was
A.what price to sell the ice-creams for.
B.whether to sell ice-cream at all.
C.what to do with the proceeds.
D.whether ice-cream should be given away.
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22. Summarise the following article into English in 200250 words, using Vocabulary of the unit (at least 10 items, underlined)
Компания Avon переходит к новой системе предложения товара- "от магазина к магазину "
Спустя месяцы переговоров с представителями розничной торговли компания Avon Product Inc., занимающаяся распространением косметической продукции через агентов-коммивояжеров, остановила свой выбор на магазинах сети Sears, Roebuck & Со и J.C. Pennу Со с предложением кремов и другой косметической продукции. За 115 лет существования компания Avon никогда не продавала свой товар в магазинах. Теперь же, когда женщины практически не бывают дома в дневное время и не открывают двери незнакомым людям , перемены необходимы.
Первые магазины фирмы будут открыты во второй половине следующего года и, пока работа на переговорах с универмагами-гигантами над соглашением еще не закончена, главный исполнительный директор компании Avon Андреа Янг не готова дать ответ на вопрос о предполагаемом количестве торговых точек.
Перед компанией открываются невероятные перспективы. В системе "Penny" работают 1140 магазинов и, по словам представителя компании, Avon уже на начальном этапе будет представлена в 70 из них. Sears владеет сетью из 860 универмагов. В планах Андреа Юнг открытие магазинов за границей в предстоящем году.
Центры Avon будут сочетать черты минисалона и отдела косметики, хотя окончательные планы еще не определены. Дизайнеры предполагают сделать их достаточно просторными, чтобы покупательницы могли спокойно выбирать товар и пользоваться пробными косметическими наборами. За долгие годы существования компании коммивояжеры лично знали своих клиентов, и сегодня Avon очень дорожит сложившимся имиджем.поэтому в центрах будут открыты курсы по подготовке персонала в традициях фирмы. Переход к новой системе продаж несет в себе и определенный риск: отчуждение более 500 тысяч распространителей работающих в системе Avon в США. Они привыкли считать себя иксклюзивными продавцами товаров Avon, и многие из них опасаются , что представители розничной торговли, особенно такие тяжеловесы, какSears и Penny, поглотят их бизнес.
Для того, чтобы решить проблемы этой группы, Avon, еще в начале 1998 года, начала продажу своей продукции через розничную сеть, открывая киоски в торговых центрах по всей стране. Во многих из этих киосков, число которых насчитывает уже около 50, работают представители компании Avon. В ближайшие месяцы Avon также планирует организацию "круглых столов "с участием своих работников, на которых будет обсуждаться дизайн центров, а также ассортимент продукции.
Эмили Нельсон и Энн Циммерман (The Wall Street Journal Oct 6 2000).
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