Word combinations with price

BUSINESS
VOCABULARY IN USE

23.
PRICE

EXERCISES

25

Just Business Unit 6 Prices and Commodities

What is the most expensive thing you’ve ever bought for cash?

What’s the best bargain you’ve ever picked up? Have you ever been badly ripped off?

Discuss

Since the only legitimate object of doing business is to make a decent profit, few things can be as important as the price tag you put on what you sell. But price is actually one of the hardest things to determine, and it’s not so much a question of what a thing is worth as how much you can reasonably expect to get for it.

Discuss these questions in small groups.

1Which of these is most important when deciding what price to give a product?

• covering costs

• what the market will bear

• competitors’ prices

• maximising profits

• giving the customer a good deal

• signalling quality

• maximising sales

• giving distributors a good deal

• attracting new customers

2Decide on the right retail price for these items.

a New mid-range car from Ford

• Costs of production, distribution and marketing per unit: €7,000

• Equivalent Volkswagen retails at €15,000

• Equivalent Daewoo retails at €8,000 b 200g perfume

• Costs per unit: €1.50

• Equivalent drugstore’s own brand retails at €3

• Equivalent from Chanel retails at €50

Compare your answers with the information in the text below.

Business Brief

26

Just Business Unit 6 Prices and Commodities

(1)a buyer is willing to pay,

(2)a seller is willing to accept, and

(3)the competition is allowing to be charged. With product, promotion, and place of the

No matter what type of product you sell, the price you charge your customers or clients will have a direct effect on the success of your business. Though pricing strategies can be complex, the basic rules of pricing are straightforward:

•All prices must cover costs and profits.

•The most effective way to lower/reduce prices is to lower/reduce costs.

•Review prices frequently to ensure that they reflect the dynamics of cost, market demand, response to the competition, and profit objectives.

•Prices must be established to ensure sales.

Before setting a price for your product, you have to know the costs of running your business. If the price for your product or service doesn’t cover costs, your cash flow will be cumulatively negative, you’ll exhaust your financial resources, and your business will ultimately fail.

Most important is to add profit in your calculation of costs. Treat profit as a fixed cost, like a loan payment or payroll, since none of us is in business to break even.

Pricing is one of the most important decisions a marketer must make regarding a product since price plays a crucial role in competitiveness and consumer demand. Marketers must determine the price at the initial stage of a product’s life and re-evaluate pricing to manage the delicate balance between production and profits.

If producers charge high prices, their goods are high-priced. However, if their products are overpriced, they can price themselves out of the market. Goods can also be mid-priced and low-priced. A producer may be selling goods at bargain prices, at cost (what they pay for them) or at a loss (even less) which is below the ‘official’ list price or recommended retail price. This policy of discounting, selling at a discount price (at a discount to the list price), or selling loss leaders usually attracts customers to shops.

When you tell a customer the price you will charge them for a product or service, you quote the price or give the customer a quote (quotation) for doing some work.

Upmarket and downmarket (BrE) AmE: upscale, downscale

Products, for example skis, exist in different models. Some are basic, some more sophisticated. The cheapest skis are low-end or bottom-end. The most expensive ones are high-end or top-end products, designed for experienced users (or people with a lot of money). The cheapest entry-level skis are for beginners who have never bought skis before. Those in between are mid-range. If you buy sophisticated skis to replace basic ones, you trade up and move upmarket. If you buy cheaper skis after buying more expensive ones, you trade down and move downmarket.

27

Just Business Unit 6 Prices and Commodities

Downmarket can show disapproval. If a publisher takes a newspaper downmarket, they make it more popular, but less cultural, to increase sales.

Mass markets and niches

Mass market describes goods that sell in large quantities and the people who buy them. For example, family cars are a mass market product. A niche or niche market is a small group of buyers with special needs, which may be profitable to sell to. For example, sports cars are a niche in the car industry.

Word combinations with ‘price‘

Exercise 1 Complete the sentences with the appropriate form of the words from the texts above.

1Today’s ……………………. clothes look almost as good as …………………. designer clothes.

2Supermarkets sometimes sell bread as a ……………… ……………………. to bring in customers for other, more expensive goods.

3I got a number of suppliers to ………………. me their best prices.

4They ………………….. the same prices in all their restaurants.

5For a limited period only, all our carpets are being sold ….. ….. ……….. .

6A ………….. policy is the policy by which a company ………………… its wholesale and retail prices.

7The prices are ………….. and will remain unchanged till the end of the year.

28

Just Business Unit 6 Prices and Commodities

Exercise 2 Correct the mistakes in italics, using expressions from the text above.

corrections

I’m Denise van Beek, from sailing boat company Nordsee Marine.

We have something for everyone. If you’ve never sailed before, try our (1) mid-range model, the Classic. It’s six metres long and very easy to sail. After a year or two, many customers (2) trade down or (3) take upmarket to something more (4) basic, like the

(5) entry-level nine-metre Turbosail, with more equipment and a bit more luxury. Our (6) bottom end product is the Fantasy. It’s 15 metres long and has everything you need for comfort on long voyages. We also produce the Retro, a traditional boat. There’s a small but profitable (7) mass market for this type of boat.

Listening: Listen to the text about price forming and answer the questions below.

1What is the difference between tradeable and non-tradeable goods? What examples are given?

2How much is a mark-up on a can of Coke?

3What makes Philip Morris the most profitable company in the world?

4What are the cause and effect relations between the price and the product profile?

5How do market forces affect prices?

6How do governments support domestic producers of commodities?

7How different are prices for food in the USA, Central and South America, Europe and

Japan? Why do they vary so much?

29

Just Business Unit 6 Prices and Commodities

8How effective was the last round of GATT (General Agreement on Tariffs and Trade)?

9How do taxes affect prices?

10Where is it worth buying a Jaguar? Give the reason.

11What is worth buying in the UK/France/Germany?

Reading and language

Read the text If the price is right and do the exercises below.

If the price is right

It may be true that everyone has their price, but the same can’t be said of products. Products don’t have a price -at least, not a fixed one. If they did, prices would not vary so much from country to country.

A personal computer wouldn’t cost twice as much in the UK as it does in the States and you wouldn’t need to take out a bank loan to buy a coffee in the Champs-Elysees. Of course, strictly speaking, the computer is tradeable and the coffee non-tradeable. For tradeable goods are exported all over the world, but non-tradeables have to be consumed where they are produced. And, since a refreshing cafe noir halfway up the Eiffel Tower can only be purchased in Paris, frankly, they can charge what they like for it. But, tradeable or not, as every salesperson knows, «The price of a thing is what it will bring.» And when it comes to price, the buyer is his own worst enemy. Show me a high price and I’ll show you too many customers prepared to pay over the odds.

The truth is, people pay the price they deserve. A massive 20% mark-up does not stop people buying 370 million cans of Coke a day. And with profit margins of up to a phenomenal 50%, Marlboro cigarettes can still gross nearly $40 billion a year and help make Philip Morris the most profitable company in the world.

In fact, product-pricing lies at the very heart of the marketing process itself. Its impact is felt in sales volume, in the product’s contribution to overall profits and, above all, in the strategic position the product occupies in the market place. For a higher price will often raise a product’s profile and a high product profile commands a higher price. Product

30

Just Business Unit 6 Prices and Commodities

profile is basically the difference between a Rolex and a Timex, a bottle с Chanel No.5 and a bottle of Boots No.7. So of course, is price.

But it isn’t as simple as that. Economic, as a well as market, forces are at work. If they were not, we might expect international competition to equalize prices everywhere but, in spite of all the talk of a single market, a borderless Europe and a common currency, prices remain alarmingly elastic And what goes for a song in one country can cost a bomb in another. For one thing, most commodities particularly agricultural products, are usually heavily subsidized. So, in the absence of free trade, food will tend to be cheap in the USA, cheaper still in Central and South America, expensive in Europe and outrageously so in Japan. Trade barriers compound the problem. For, sadly, those who took part in the Uruguay round of GATT could barely reach general agreement on where to have lunch.

So how do you put a price on things? An everyday supermarket item in one country might be a luxury item in another and cost considerably more. Scotch, for instance, is a mass market product in Aberdeen but understandably a niche market product in Abu Dhabi. No prizes for guessing where it’s cheaper.

Then, of course, there are taxes. By imposing wildly different rates of tax on otherwise homogeneous commodities like petrol, governments distort prices even further. If you’re driving through Europe you’d certainly do better to fill up in Luxembourg than in Italy. Tax is also the reason why a Jaguar car costs less in Brussels than in Britain, where it was built.

So buy your car in Belgium, your fridge and other ‘white goods’ in the UK; stock up on medicines in France and on CDs in Germany. That way you’ll be sure to get the best deal. For where you spend your money is most as important as what you spend it on, but neither is as important as the fact that you’re prepared to spend it. In the words of film actor Cary Grant, «Money talks, they say. All it ever said to me was Goodbye.»

Exercise 1 Without referring back to the article, how much can you remember about?

1.computers

2.Coca-Cola

3.Marlboro cigarettes

4.Rolex and Chanel

5.food

6.GATT

7.Scotch whisky

8.Jaguar cars

9.Fridges

10.CDs

31

Just Business Unit 6 Prices and Commodities

Vocabulary

Exercise 2 Look back at the article If the Price is Right and find the expressions which mean:

1.be different in different countries (par.1)

2.borrow money from a bank (par.2)

3.be absolutely accurate (par. 2)

4.goods that have to be consumed where they are produced (par. 2)

5.ask somebody to pay a particular amount of money for something (par. 2)

6.pay more for something than it’s worth (par. 2)

7.be worth (par. 3)

8.unprecedented (par. 3)

9.earn a total amount of money before costs and tax have been taken away (par. 3)

10.be the most important or basic part of something (par. 4)

11.influence, effect (par. 4)

12.a position or reputation that gets somebody or something a lot of attention (par. 4)

13.dictate (par. 4)

14.effect of buyers’ and sellers’ behavior on supply and demand (par. 5)

15.make something the same in amount, size or importance (par. 5)

16.able to stretch (par. 5)

17.be very cheap (par. 5)

18.be very expensive (par. 5)

19.basic food products or fuel that can be bought and sold (par. 6)

20.pay part of the cost (par. 6)

21.make something worse (par. 6)

22.hardly (par. 6)

23.a market for a product or service, perhaps an expensive or unusual one, that does not have many buyers (par. 7)

24.introduce something and force people to accept it (par.

25.of the same type (par.

26.change something so that it becomes unrecognizable (par.

27.buy something at the lowest price (par. 9)

28.money will get you anything (par. 9)

Exercise 3 Now match the following words and phrases to complete these notes on the article you read earlier. Referring back to the text will help you. The first sentence has been done for you as an example.

32

Now link these notes together to produce a short summary of the article. You will need some of the extra words and phrases given below to connect up the facts.

The first sentence has been done for you.

Whereas tradeable goods are exported all over the world, non-tradeables are consumed

where they are produced. But in both cases too many customers …

Exercise 4 The following business words appeared in the article in the order in which they are listed. How many of their word partners can you find in just five minutes?

Exercise 5 Decide whether the following expressions mean expensive or cheap.

33

Just Business Unit 6 Prices and Commodities

Exercise 6 In each example, use the word in CAPITALS to make another form of the word, which will fit in the sentence.

1.TRADE

…goods are exported all over the world.

2.TRADE

China is rapidly becoming one of the world’s main … nations.

3.PROFIT

Unfortunately, the product didn’t turn out to be very ….

4.PROFIT

The ratio of net profit to sales will give us an idea of the company’s overall …

5.PROFIT

I think we have all … from a sharp increase in demand.

6.COMPETE

We’ve lost market share because our products are no longer ….

7.COMPETE

In the oil industry our main … are obviously the Arabs and the Americans.

8.COMPETE

With so many similar products available already, the … is very stiff.

9.PRICE

It’s high time we had a thorough review of our … policy before we … ourselves out of the market.

10.PRICE

Some of their products are a bit…. We can get the same thing cheaper elsewhere.

Exercise 7 All the words below form strong partnerships with the words prices and price, but the vowels are missing from each word. How many can you work out?

34

Just Business Unit 6 Prices and Commodities

Exercise 8 Complete the sentences using some of the word partnerships above.

1.If we accept your offer, we will expect you to ______ prices at their present level for the next 12 months.

2.If we all keep reducing our prices, we’ll end up with a price ______ on our hands.

3.You can’t buy cheaper. Our prices are not just ______, they’re ______.

4.We more than cut our prices — we ______ them by 35%!

5.The price of most things is pretty ______. It depends on where you buy them and what the demand is.

6.Talk about a price ______! They’ve practically doubled their prices every six weeks!

7.We think the price you’ve ______ us is very reasonable. You’ve got yourself a deal.

8.Acute price ______ has prevented us from raising our prices.

Exercise 9 Rearrange the following to make useful business expressions. The first word is in the right place.

1.Let’s figures talk.

2.Just a look figures take the at.

3.Can us you a figure rough give?

4.How these at did arrive you figures?

5.Where these did from come figures?

6.The speak figures themselves for.

7.The encouraging not very are figures.

8.Can it you a on put figure?

Which of the above expressions mean:

a.you want an approximate figure?

b.the figures are bad?

c.the figures need no explanation?

d.you’re not sure you believe the figures? (two expressions)

e.you want a fairly precise figure?

Discuss

Work in pairs and discuss the following:

1.How aware do you think consumers usually are of exactly what you are buying?

2.What measures could be introduced to remedy this?

3.Think of a commodity or a product. Decide on a price for it. This price should be much higher than its actual price. Persuade your partner that it is worth this high price.

35

36

Just Business Unit 6 Prices and Commodities

Exercise 2 The financial press is full of expressions of change and development. Match each verb below with the type of change it describes and put it in the appropriate column.

Exercise 3 If somebody or something influences prices or other economic indicators we use transitive verbs of change. Match each verb below with the type of change it describes and put it in the appropriate column.

37

Just Business Unit 6 Prices and Commodities

Exercise 4 Match each phrase on the left with its closest synonym on the right.

Exercise 5 Which of the verbs in the box are synonyms for the verbs below?

stabilise __________________________________________________

reach a maximum ___________________________________________

fall to the lowest level ________________________________________

Exercise 6 Match each verb on the left with its closest antonym on the right.

Exercise 7 Complete each sentence with a phrasal verb from the box.

38

Just Business Unit 6 Prices and Commodities

Exercise 8 Underline the correct words in italics.

1.The verbs ‘rise’ and ‘grow’ are similar. However, rise/grow is more common for longer periods of time, and where there is a total increase in size (e.g. describing the economy).

2.The phrasal verb ‘grow up’ refers to the change from being a child to being an adult. It can also/cannot be used to refer to things like profits, the economy.

3.The phrasal verb ‘fall down’ refers to movement towards the ground. It can also/cannot be used to refer to things like sales, profits.

4.We can ‘raise/lower’ prices or ‘put up/bring down’ prices. However, the first two examples/last two examples are slightly more formal, and can refer to a change in the level or standard of something as well as prices.

Exercise 9 Put a tick (V) if the sentence is possible. Put a cross (X) if it is not.

1.We cut costs by 5%.

2.We declined costs by 5%.

3.Our productivity declined by 5%.

4.Profits reduced by 5%.

5.We reduced our staff turnover by 5%.

6.We raised prices by 2%.

7.We picked up prices by 2%.

8.Inflation raised by 4%.

9.Inflation rose by 4%.

10.We increased sales by 3%.

11.Sales increased by 3%.

12.We recovered sales by the end of the year.

13.Sales recovered by the end of the year.

Exercise 10 The —ing form of many verbs can be used as an adjective, eg an increasing demand for oil. Make adjectives from the verbs in the box using the information in brackets.

1._____________ budget (decreasing in size)

2._____________ business (increasing in size)

3.______________ problem (increasing over a long period)

4.______________ inflation(Increasing)

5.______________ costs (reaching a very high level)

39

Just Business Unit 6 Prices and Commodities

Exercise 11 Fill in the missing letters in these adverbs using the information in brackets.

Sales increased …

1.ra____________ly (quickly)

2.gr____________ly (slowly and by small amounts)

3.st____________ly (in a constant, regular way)

4.sli____________ly (a little)

5.mar___________ly (fractionally)

6.sig____________ly (in a large and noticeable way)

7.sh____________ly (suddenly and by a large amount)

8.dr____________ly (suddenly and surprisingly)

Note that ‘dramatically’ can refer to both good and bad changes (unlike in many Latin languages).

Exercise 12 Put a tick (V) if the sentence makes sense. Put a (X) if it does not.

1.Profits have risen steadily over recent years.

2.Sales plummeted marginally in July.

3.The price of oil soared gradually last year.

4.Share prices dropped back slightly last week.

5.Unemployment numbers leveled out sharply.

Exercise 13 You can use adjectives (marginal, slight, slow, gradual, steady, stable, considerable, significant, rapid, sudden, sharp, steep, dramatic) or adverbs (marginally, slightly, slowly, gradually, steadily, considerably, significantly, rapidly, suddenly, sharply, steeply, dramatically) to describe changes. Use either adjectives or adverbs to complete the gaps.

Sales started the year at 30,000 units in January and went up ………….. to 31,000 units in February. There was a ……… rise to 38,000 in March due to the introduction of a new price discounting scheme. This was followed by a ……… fall in April when sales dropped ……… to 33,000 units. Our competitors launched a rival product and this resulted in a ………….

decline to 25,000 in May. But we ran a summer advertising campaign and sales picked up

………… by 2,000 units a month throughout June, July and August until they stood at 33,000 in September. The …………. upsurge to 45,000 in October resulted from the launch of our new autumn range. But then we experienced problems meeting demand and sales slumped

……… in November and remained ………….. at 39,000 in December.

Exercise 14 Write the nouns for these verbs.

41

Just Business Unit 6 Prices and Commodities

Exercise 17 Study the sentences and then use the structures in bold to paraphrase the sentences below. The words in brackets will help you.

A

1.At the beginning of the period prices stood at $80 per unit.

2.There was a steady fall in prices till the end of the year.

3.There was a plateau in sales from June to September.

4.We can see/witness a significant rise in prices in the third quarter.

5.Prices showed a dramatic rise of 10%.

6.After rising slightly for three months prices declined sharply by 10% from $80 to $70 per unit.

7.After fluctuating for several months prices showed an upward trend.

8.The steep rise in prices was followed by a long period of volatility.

9.Before showing signs of growth prices fluctuated between $50 and $60.

10.By the end of the quarter sales showed an upward trend.

11.Prices were 5% up on last year.

B

1.Sales decreased dramatically in 2010 but in 2011 they rose to an all-time high. (Before… )

2.Prices rocketed in June. (There was ….)

3.At the beginning of the year turnover amounted to $10,000. (… stood … )

4.In spring sales were not steady but in June they started picking up gradually. (After …)

5.After crashing to an all time low of $5,000 sales rose sharply in March. (… was followed by …)

6.Due to inflation prices have risen by 8% in comparison with last year. ( … on last year)

7.Sales jumped from 200 to 250 units in the first quarter. (We can witness …)

8.There was a gradual rise in sales in 2010. (Sales showed …)

9.Sales remained flat till the end of the year. ( … plateau …)

10.After a long period of stagnation the economy started recovering. (…showed … trend.)

11.We need to reduce costs sharply. (We need to see a …)

12.After a long period of stagnation the performance figures started improving. (… upward trend…)

42

Just Business Unit 6 Prices and Commodities

Exercise 18 Look at the figures below. In which month did these events happen?

2a spell of cold weather

3a move to larger premises

4the installation of a call routing system

5the launch party for the new season’s designs

6the annual sales conference in Brussels

a. Why did costs rise? Use result from.

The rise in rent resulted from a move to larger premises.

b.What effect did the events have on the company costs? Use result in.

A move to larger premises resulted in a rise in rent.

c.Study the sentences below. Which are reasons and which are results? Link them with one of the phrases above.

43

Just Business Unit 6 Prices and Commodities

Exercise 19 Use the information in the graph to complete the memo below.

Sales of SolPol April-December (in thousand Euros)

MEMORANDUM

To: All staff

From: Frank Dobson, Head of Sales

Date: 20 December ____________

Subject: Update on sales of SolPol

Many of you worked hard to make sure that the launch of our new soluble Paracetamol tablets at the 5th International Products conference in April this year was a success. Thanks to the continuing efforts of the Sales team I am pleased to say that sales are very encouraging.

SolPol was launched in April and

The future is looking good for sales of SolPol so let’s start looking for our next great product!

44

Just Business Unit 6 Prices and Commodities

Listening:

Listen to the story of the famous Sumitomo Bank copper scandal and answer the questions.

1.Why is investing in commodities such a high-risk business?

2.Who was Mr 5%?

3.How much money did he lose the Sumitomo Bank?

4.Why do you think it took so long for the bank to find out what was going on?

Speaking and Listening

You are about to compete in the dangerous world of commodity trading. Work in small groups. You will start off with US$100,000,000 of capital to speculate with and may buy, sell or hold any or all of the seven commodities in which you trade.

Information Updates

Every ten minutes you will hear an information update detailing the current commodity prices and giving you an up-to-the-minute forecast on likely changes in trading prices for each commodity. On the basis of this information you should agree on what to buy, sell or hold during this trading session. Keep a record of all your transactions. There are eight trading sessions in all.

Your Objective

Your objective is to make as much money as possible by the end of the final session. You may not borrow extra capital and may therefore need to fund purchases of a commodity whose price you believe to be going up by selling your holdings in a commodity whose price you think may be about to fall. Be careful — not all the forecasts are accurate!

Beware!

Remember, 85% of all commodity speculators get wiped out. Try not to be one of them! Look for patterns and trends in the fluctuating price of each commodity and keep track of which forecasts are the most accurate. Good luck!

45

46

Just Business Unit 6 Prices and Commodities

Writing

Describe this graph (sales, prices, etc.) using the active words from the Unit and give possible reasons for the changes.

____________________________________________________

____________________________________________________

____________________________________________________

____________________________________________________

____________________________________________________

____________________________________________________

____________________________________________________

____________________________________________________

____________________________________________________

____________________________________________________

____________________________________________________

____________________________________________________

____________________________________________________

47

Just Business Unit 6 Prices and Commodities

вижу смысла в том, чтобы переплачивать.

9Если бы правительства не субсидировали производство сельскохозяйственной

продукции, конкуренция на международном рынке могла бы уравнять цены.

10К сожалению, продукт оказался неконкурентоспособным, и нам пришлось

значительно понизить цену.

11Цены на потребительские товары в Европе достаточно эластичны из-зи

неустойчивости рынка.

12Цены ниже наших вы просто не найдете. Мы предлагаем вам заключить сделку на

самых выгодных условиях.

13Ваша газета опубликовала искаженные факты, и это только усложнило ситуацию.

14Хотя евро признан единой валютой в большинстве стран Европы, цены на

однотипные товары разнятся от страны к стране.

15Высокая цена продукта, как правило, повышает его значимость в глазах

покупателей и, наоборот, более значимый продукт продается по более высокой цене.

49