Coca-Cola and Its Advertising

John S. Pemberton invented Coca-Cola in 1886. His partner suggested (to make) an advertisement for the drink that very year. In 1888, Asa Candler bought the Coca-Cola business and decided (to build) the product known through signs, calendars and clocks. The company began (to run) its global network in 1923. The company succeeded i (to transform) Coca-Cola into a truly international product by (to set up) a foreign department.

Coca-Cola’s advertising has always attempted (to reflect) changing contemporary lifestyles. (To create) an international advertising campaign requires the talents of professionals in many areas and expensive research and testing are always done before (to decide) which advertisement will finally be used.

After (to return) Diet Coke in 1982, the company saw its sales grow quickly. The drink is now the third most popular in the world. In 1985, the company tried (to change) the secret formula of Coca-Cola, but realized that Americans were very attached to the original recipe. The company listened to its consumers and quickly responded by (to launch) the original formula to the market as “Coca-Cola Classic”. Today people in more than 160 countries around the globe enjoy (to drink) Coca-Cola. The company intends (to expand) its global presence even further in the twenty-first century, particularly in developing markets.

17. Render the following passage in Russian (10-12 sentences) focusing on key vocabulary.

Lots of people pretend that they never read advertisements, but this claim may be seriously doubted. It is hardly possible not to read advertisements these days. And what they often are, too! Just think what a railway station or a newspaper would be like without advertisements. Would you enjoy gazing at a blank wall reading railway bye-laws while waiting for a train? Would you like to read only closely-printed columns of news in your daily paper? A cheerful, witty advertisement makes such a difference to a drab wall or a newspaper full of the daily ration of calamities.

We must not forget, either, that advertising makes a positive contribution to our pockets. Newspapers, commercial radio and television companies could not subsist without this source of revenue. The fact that we pay so little for our daily paper, or can enjoy so many broadcast programs is due entirely to the money spent by advertisers.

Another thing we mustn’t forget is the “small ads”, which are in virtually every newspaper and magazine. What a tremendously useful service they perform for the community! For instance, you can find a job, buy or sell a house, announce a birth, marriage or death in what used to be called the “hatch, match and dispatch” columns. No other item in a newspaper provides such entertaining reading or offers such a deep insight into human nature. It’s the best advertisement for advertising there is!

18. Render the following passage in English (10-12 sentences) using

active vocabulary.

Под термином «рекламная кампания» мы будем понимать комплекс рекламных мероприятий, связанных единой концепцией и рекламной идеей, направленных на достижение конкретной маркетинговой цели в рамках маркетинговой стратегии рекламодателя.

Рекламные кампании отличаются разнообразием. Из множества их возможных классификаций целесообразно выделить следующие:

· по преследуемым целям (поддержка конкретного товара, формирование благоприятного имиджа рекламодателя и т.д.)

· по территориальному охвату (локальные, региональные, национальные, международные)

· по интенсивности воздействия (ровные, нарастающие, нисходящие).

В рамках ровной рекламной кампании мероприятия распределяются равномерно во времени, например, телевизионная реклама - один раз в неделю в определенный день, рекламные публикации в газете - также через равные промежутки времени и т.д. Этот тип рекламных кампаний имеет смысл при достаточной известности рекламодателя, при напоминающей рекламе.

Нарастающая рекламная кампания строится по принципу усиления воздействия на аудиторию. Такой подход целесообразен при постепенном увеличении объема выпуска рекламируемого товара.

Нисходящая рекламная кампания является наиболее приемлемым ее типом при реализации ограниченной по объему партии рекламируемого товара. По мере его реализации снижается интенсивность рекламной поддержки.

Speaking

1. Should advertising attempt to inform consumers? Why? Always?

Should advertising attempt to persuade consumers? Why? Always?

2. Define advertising and promotion. How do you think that they differ in

the dominant tasks that they are asked to perform?

3. What are the major advertising media? Are they equal in value to

advertisers?

4. What media are available to advertisers today that were not available a

century ago? What influence has the development of new media had on

the growth of advertising?

5. What predictions would you make regarding the future of advertising

and promotion?

6. Which of the following is true? a) “Promotion is an example of

advertising”; b) “Advertising is an example of promotion”.

7. Explain the role of publicity in marketing.

8. Tell some of the advantages and disadvantages of publicity. Give a

recent example of one receiving (un)favorable publicity.

9. Why do companies engage in sales promotion activity?

10. What is an advertising agency? What functions are performed by most

agencies? (Use additional text)

11. List several criticisms of advertising. Are they justified? How could

you answer them? (Use additional text)

12.What are the benefits of advertising? What evidence is there that they

outweigh its disadvantages?

13. There is a saying: “Doing business without advertising is like winking

someone in the dark. You know what you are doing but nobody else

does”. Use your own examples to prove that it is true.

Writing

Express your opinion on the following (150-200 words):

a) “Not everyone agrees that advertising benefits the economy”.

b) “Much advertising tries to persuade consumers rather than inform

them”.

c) “Advertising is costly to produce, and these costs raise prices for

consumers”. (do it in writing, 150-200 words).

Key Vocabulary

UNIT IV

B A N K I N G

Lead - in

1. Which of the banking facilities do you use?

2. What other services do commercial banks offer in your country?

3. What changes have there been in personal banking recently?

4. What further changes do you foresee in the future?

Reading

Text 1

Read the text and identify the issues discussed in the text. In each paragraph, find the sentences supporting the main idea of the text. What paragraph contains the most important information? Be ready to answer the questions given below.

\

New services in banking

Banks perform the widest range of functions (see Fig. 1) in the economy and consequently any modern full-service banking institu­tion should provide the widest variety of services.

Fig.1.

Banks may be defined as firms producing and selling financial services. Their success or failure hinges on their ability to identify the financial services the public demands, produce those services efficient­ly, and sell them at a competitive price. The service menu of banks does not remain unchanged as new services are constantly being introduced and developed by commercial banks. Many of them offer a combination of wholesale and retail banking. The former provides large scale services to the corporate sector. The latter mainly provides smaller scale services to the general public.

The 1980s ushered in an explosion of new service options. Many of the new services have simply been variations of traditional deposit and loan product. Other innovative services, however, have broken new ground and exposed bankers to all the uncertainty and risk associated with new product development.

Trust services are one of the most important and rapidly growing bank service areas today. Bank trust operations encompass the man­agement of property and other assets owned by a bank customer and the administration of a customer's security holdings and borrowings. In offering trust services the bank places itself as authorized agent between the marketplace and the customer, making investment and management decisions on the customer's behalf and dispensing funds when needed to cover the customer's obligations. A bank's trust operations are usually divided into three broad areas: (1) personal trust services, (2) business trust services, and (3) trust services for charities and nonprofit organizations. Each involves a fiduciary rela­tionship between bank and customer — that is, a trust department acts to benefit its customers within those areas defined by contract (the trust agreement) between the bank (trustee) and the customer (trustor) covering a specified period of time.

Banks provide a wide range of trust services for individuals and families in the form of estate settlement, trust administration and agency services. Bank trust divisions act as agents for corporations and other businesses in a host of different ways. This may involve issuing securities on the business customer's behalf, paying dividends or interest owed on any securities issued, reinvesting the dividends for securities holders who request that service, and retiring the securities at maturity."⁴¹ Under the terms of the Federal Trust Indenture Act of 1939, any foreign or domestic corporation that issues securities to the general public in the United States must designate a trustee for that security issue to act as a fiduciary, representing the investors purchas­ing those securities. Trust departments also handle transfers of owner­ship of corporate stock, stock splits, and conversions of stock into debt, and they issue proxies and count votes in connection with annual stockholder meetings.

Today, banks frequently serve as trustees under indenture, holding legal title to property securing a bond issue, with the power to foreclose on and liquidate that property if the issuer defaults. The bank as trustee must make sure all bond covenants agreed to by the issuing corporation are adhered to and that all required liens against the company's property are duly filed and recorded. The trust depart­ment will set up and manage a sinking fund, investing all monies that the bond issuer contributes to that fund periodically with the intent of eventually redeeming the bond issue.

The fiduciary activities of banks make a critical contribution to the functioning of the commercial paper market, where the unse­cured, short-term notes of large corporations (both foreign and domestic) are traded. Bank trust departments keep records on which investors purchase commercial paper, see that any notes purchased are actually delivered to the investors involved, and pay off the holders of those notes on the maturity date. Even more important, banks issue letters of credit backstopping issuers of commercial paper in order to reassure investors that the bank will pay off a note issue if the borrowing corporation cannot do so. A bank's trust department will receive and hold any credit letters issued by other lending institutions and check to see that all the terms of those credit letters are being adhered to by borrowing companies. If necessary, the trust department will file for payment under the terms of a credit letter and dispense the collected funds to note holders.

1. What is the bank? What factors determine the success of its operation?

2. What makes the 1980s a turning point in banking?

3. What do bank trust operations encompass?

4. What groups do the bank trust operations fall into?

5. What does the Federal Indenture Act of 1939 envisage?

6. What are the obligations of a bank acting as trustee under indenture?

7. What are letters of credit aimed at when they are issued by banks acting as fiduciaries to benefit their corporate customers?

Text 2

Read the text. Point out the key sentence of each paragraph. Be ready to answer the questions given below.

Bank deposits

Banks carrying lending and investment operations have the use of the money of their clients from the moment they pay their money into the bank till the moment they draw it out. The accounts they hold with the bank have credit balances and are called depo­sits.

Deposits are the raw material of banking and, thus, represent the ultimate source of bank profitability and growth. They are a unique item on a bank's balance sheet that clearly distin­guishes a bank from other types of business firms. There are two main types of accounts opened by the British clearing banks for their customers: the current account and the deposit account. Some banks provide a savings bank account. It is worth mentioning that banks have been eager in recent years to attract the accounts of even quite modest private people, despite the likely small size of the individual deposits and the high overheads incurred in servicing such accounts. The banks do not pay their customers any interest on current accounts, but provide some free of charge services to the holders and issue them with checkbooks. An account of checks paid, credits received and resulting balances is printed out by the bank's computer and sent to the customer. Big companies will require their statements daily, small private customers usually get theirs every three or six months. If an account becomes overdrawn a special code sign warns the account holder that his balance is in the debit. In case of overdrafts, a bank levies extra charges. Money on a deposit account is not instantly available but can be withdrawn after giving the bank seven days' notice. Banks pay interest on deposit accounts. For years this rate was fixed at 2 per cent below bank rate but now the banks key their rates to a base rate which varies with the money market rates.

There has been a steady drift of funds out of current into deposit accounts and also away from the clearing banks into interest-earning deposits of other financial institutions. However, many experts find it surprising that over half of all clearing bank deposits are still current account deposits on which the banks pay no interest, and in fact on which they often levy charges to meet the expenses of servicing the account.

In the U.S. there are three main types of deposits. Demand deposits are similar to current accounts. They are more commonly known as checking accounts because they are sums standing to the credit of the customer which the bank undertakes to make immediately available to meet checks drawn against them, or of course as cash across the counter. They are the principal means of making payments.

Savings deposits generally are in small dollar amounts; they bear a relatively low-interest rate but may be withdrawn by the depositor with little or no notice. These deposits are designed to attract funds from customers who wish to set aside monies in anticipation of future expenditures. While their interest cost is higher, thrift deposits are generally less costly for a bank to process or manage. Passbook savings deposits and statement savings deposits are the main types of saving plans. Passbook savings deposits are sold to household cus­tomers in small denominations. The customers are given small book­lets showing current balances in the account, any interest earnings, deposits and withdrawals. Usually a passbook must be presented by a depositor to a bank teller in order to make deposits or withdrawals. Statement savings deposits are evidenced only by computer entry. The customer can get monthly computer printouts showing all the relevant information.

Time deposits carry a fixed maturity and offer the highest interest rates a bank can pay. Time deposits may be divided into nonnegotiable certificates of deposit (CDs), which are usually small, consumer-type accounts, and negotiable CDs, that may be traded in the open market and are purchased mainly by cor­porations.

New forms or checkable (demand) deposits appeared, combining the essential features of both demand and savings deposits. These transaction accounts include negotiable orders of withdrawal (NOWs) and automatic transfer services (ATS). NOW accounts may be drafted to pay bills but also earn interest, while ATS is a preauthorized payments service in which the bank transfers funds from an interest-bearing savings account to a checking account as necessary to cover checks written by the customer. Two relatively new transaction accounts—money market deposits accounts (MMDAs) and Super NOWs—were offered. MMDAs, designed to compete directly with the high-yielding share accounts offered by money market mutual funds, and Super NOWs may carry prevailing market rates on short-term liquid funds. Both can be drafted by check, automatic withdra­wal, or telephone transfer, but the number of permissible withdra­wals from MMDAs is limited. MMDAs may be held by an individual, business firm, or unit of government, but Super NOWs can be held only by individuals, governments, and nonprofit organiza­tions.

Each of the different types of deposits carries a different rate of interest or yield to the depositor. In general, the longer the maturity of a deposit, the greater the yield that must be offered. For example, NOW deposits and MMDAs are subject to immediate withdrawal by the customer and, accordingly, their offer rate to bank customers is among the lowest of all deposits. In con­trast negotiable CDs and deposits of a year or longer to matu­rity often carry rates higher by a full percentage point or more. The size and perceived risk exposure of the offering banks also play an important role in shaping deposit interest rates.

1. Why are deposits so important?

2. What are the advantages and disadvantages of the current account from the point of view of a bank customer?

3. What are the main types of deposits in the U.S.?

4. Why are demand deposits often referred to as checking accounts?

5. What do checking accounts in the U.S. and current accounts in Great Britain have in common and in what do they differ?

6. What is the difference between the two main forms of savings deposits in the U.S.?

7. Do all the deposits sold by American banks carry the same yield?

8. What are the factors that influence the shaping of deposit interest rates?

Text 3

Read the text and identify the problem discussed in the text. Be ready to answer the questions given below.

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