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Unit_07 14/11/05 8:51 am Page 54

UNIT

7

e-commerce

OVERVIEW▼

Listening Success online Vocabulary Internet terms Reading Internet shopping Language review Conditionals Skills Presentations Case study KGV Europe

Technology is the knack of so arranging the world that we don’t have to experience it. Max Frisch, (1911–1991) Swiss architect, playwright and novelist

Starting up

Listening Success online

Discuss these questions. 1 What goods or services do you buy over the Internet? What do you prefer not to buy? 2 What problems have you had buying on the Internet? 3 What kind of products or services are best sold on the Net? 4 Are there any things which could not or should not be sold on the Net? 5 What are the risks of e-commerce for a) the companies involved? b) their customers? A

B

7.1 Listen to the first part of the interview with Jeff Kimbell, Marketing Director Europe, for Dell, and complete the sentences below. 1 Dell has a .......................... .......................... with its customers. 2 They don’t use .......................... to sell their goods. 3 They offer .......................... to customers to help customers make a .......................... .......................... . 4 Customers can buy a system .......................... . 7.2 Listen to the second part of the interview and give four reasons why

Dell has been successful doing business online. C ▲ Jeff Kimbell

7.3 Listen to the final part of the interview and say if the following statements are true or false. 1 People will be less worried about security. 2 People will still want to go to shops to touch and feel products. 3 Advances in technology will encourage people to shop online.

D Do you agree with the statements in Exercise C above? 54


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7 e-commerce

Vocabulary Internet terms

A We often use the words and phrases below to talk about e-commerce.

Check that you understand their meaning. Use a dictionary to help you. browse directories hits keyword online search search engines site

locate surfers

Net traffic

B Topsite is a service that helps companies improve their e-commerce

business. Use the words and phrases above to complete this promotional page from its website.

Has your company started doing business on the ..........................1? Have you spent thousands on a website, more money to register it with all the major ..........................2, but you’re still getting little or no ..........................3? If the answer is ‘yes’, then you need Topsite. The Topsite service places your ..........................4 at the very top of the major search engine listings. So when people do a ..........................5 for a ..........................6 associated with your business or product, your site automatically receives many more ..........................7. What’s more, Topsite delivers targeted visitors. These are not ..........................8 who’ve already visited 35 ..........................9 shopping sites, but people who’ve actually done a search for your business. Remember, we guarantee to achieve top rankings for your company on the most highly travelled search engines, portals, and ..........................10. So when your potential customers ..........................11 the Internet, we make sure they can ..........................12 your website.

C

Discuss these questions. 1 Which search engines do you use? 2 What makes a website easy or difficult to use? Why? 3 What do you like about the sites you visit regularly? 4 How much time do you spend browsing on the Net? 5 How can businesses make sure their websites receive more hits than their competitors?

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7 e-commerce

Reading Internet shopping

A What’s the difference between a ‘bricks and mortar’ and an ‘online’ retailer?

Can you give an example of each? B What do you know about these companies: Amazon, eBay, Sears Roebuck?

Internet shopping – the sequel By Neil Buckley

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Pets.com; Webvan; Boo.com. The road to the online retailing future is littered with the wrecks of Internet start-ups once seen as the pioneers of a retailing revolution. The shape of e-tail, however, is very different from what was predicted a few years ago. Apart from Amazon and eBay – the web’s biggest forum for buying and selling, though it is an auction house not a retailer – most of the biggest online retailers are not Internet start-ups but traditional shop or mail-order groups. Retailers have brought their investment commerce in partnership capacity and trusted with bricks-and-mortar brand names to bear on Internet shopping - thus 65 retailers such as Target, Nordstrom, Borders and boosting public Circuit City. confidence. Many have That blending of online integrated online sales and offline is offering into a ‘multichannel’ strategy that may link a 70 consumers new ways to shop. They may research website, shops and a mailand order their purchase order catalogue. online, but have it ‘There was a time when delivered to a nearby everybody said the Internet was going to 75 shop - a service offered by retailers such as Sears steal purchases from Roebuck and Circuit City shops. But the opposite is – so as to avoid delivery happening: multichannel charges and allow them retailing is the reality today,’ says Darrell Rigby, 80 to see or try it on first. Some of the biggest US head of the global retail retailers are developing practice at Bain & Co, the integrated operations. JC management consultants. Penney, the century-old ‘Many classic bricks-andmortar retailers actually 85 department store chain, saw its Internet sales started making money on reach $600m last year. It their online operations offers 200,000 items that long before Amazon did.’ can be delivered to A prime example of the fusion of the online and 90 customers’ homes or any of its 1,020 shops. so-called ‘offline’ retail Steve Riordan, a worlds is Amazon itself. consultant at AT KearThe company has ney, says traditional expanded well beyond its roots as a seller of books 95 retailers that have not yet embraced the online and CDs, acting as an world face heavy online mall selling everyinvestment and some thing from gourmet foods tough choices. Are they to clothing. Evolving from pure retailer to 100 going to run online operations themselves or ‘retail platform’, it now outsource them? Do they conducts its online

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use the same sourcing model from the same factories? Do they have different distribution centres? While the US still leads the way, it does not have a monopoly on successful Internet retailers. Tesco, the British supermarket chain, has the world’s biggest online grocery business. It has helped Safeway, the third-largest US supermarket chain, set up its Internet operations. The biggest e-commerce site in Japan is Rakuten, a home-grown online shopping mall that began life in 1997 with just 13 shops. Today, it has more than 10,000 and a share of the e-commerce market three times bigger than secondranking Yahoo Japan, according to a report by JP Morgan. Some pure Internet retailers are also continuing to grow. Yoox.com – which sells end-of-season and exclusive goods from designers such as Armani, Prada and Dolce & Gabbana - has proved that designer labels will

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sell online and that European e-tailers can succeed internationally. It chose to launch in Europe first, close to the designers whose goods it sells. Yoox now sells in seven languages to 25 countries in Europe, North America and Japan. Its stylish site – which it calls an ‘e-concept store’ – enables shoppers to ‘zoom’ in on clothes and see them from different angles, and includes video and music. Federico Marchetti, the Italian former investment banker who is Yoox’s founder and chief executive, says that anyone selling online does not just have to get the technology and orders right. They also have to provide fun and entertainment. ‘What we have been trying to do with Yoox is build a very nice customer experience,’ he says. ‘The online retailer always has to be doing something interesting and different.’ From the Financial Times


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C

Match the summaries below to the first six paragraphs of the article. a) People mistakenly thought that Internet sales would take sales away from traditional stores. b) A large number of Internet companies were unsuccessful. c) A well-known American retailer is getting an increasing amount of revenue from online sales. d) The largest online sellers are well-established businesses. e) Consumers are taking advantage of the new partnerships by shopping online but using traditional retailers to collect their goods. f ) Some well-known Internet companies have joined with established companies to sell a wide range of products.

D Now read the rest of the article and answer the questions below.

1 What issues should traditional retailers consider before going online? 2 What facts show that a) Tesco and b) Rakuten have been highly successful in selling online? 3 According to Federico Marchetti, what do Internet businesses need to do to be successful? E Match the following word partnerships.

1 2 3 4

distribution online designer delivery

a) labels b) charge c) retailing d) centre

5 6 7 8

supermarket shopping auction mail-order

e) catalogue f ) houses g) chains h) mall

F Check your answers in the article. Complete the following sentences with one

of the word partnerships above. 1 Unless you collect the goods from the retail store, there is an additional .......................... . 2 Sotheby’s and Christie’s are probably the most famous .......................... in the world. Their sales of antiques and paintings are legendary. 3 In the US many people spend the whole day at their local .......................... because it is easy to park and you can buy everything there. 4 Some traditional businesses have found that they can make a lot of money from .......................... with a small investment in an easy-to-use website. 5 These days many .......................... sell not only food, but also services such as insurance and banking. 6 Goods with .......................... command premium prices in the shops. 7 From our .......................... just outside Paris we supply a network of wholesalers across Europe. 8 Many people like the convenience of ordering goods from home using a .......................... . G Discuss these statements.

1 All retailers will have to sell online. 2 There is no safe way of buying goods online. 3 Online businesses will never be able to guarantee delivery on time because they rely on postal services. 4 Some products and services cannot be sold online.

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7 e-commerce

Language review Conditionals

There are many different types of conditional sentence: • First conditional: If we get that designer, we’ll have a winning team. • Second conditional: If we relaunched our website, we’d get better results. • Third conditional: If we’d prepared properly, we wouldn’t have lost the contract. • ‘Zero’ conditional: When markets crash, everyone suffers. The following are also examples of conditional sentences: • Lose that password and we’ll never be able to access that file again. • Tell us what you need to get the job done and you’ll have it. • Should you need any further information, please contact our helpline. • Had the market conditions been better, the share offer would have been a success. • Given time, our factory can meet all those orders. page 133

A Match sentences 1–12 to the six headings below.

promise invitation / request speculating about the future bargaining reflecting on the past advice / warning / threat 1 They would’ve gone bust if they’d taken his advice. 2 If I were you, I’d redesign your website. 3 We’ll deliver within 24 hours if you order online. 4 We’ll be able to expand if they come up with the finance. 5 If you reduced your price by 8%, we’d increase our order substantially. 6 Your money back if not 100% satisfied. 7 If we go online our overheads will fall. 8 If you would like to apply, call Human Resources on 020 7753 3420. 9 If you order by the end of the month we can give you a discount. 10 I wouldn’t do that if I were you. 11 If we’d had a better website, we’d have attracted more customers. 12 I would be grateful if you would advise your staff as soon as possible. B Decide whether each of the situations below is a) likely or b) unlikely to

happen to you. Then, tell your partner what you will or would do. 4 you travel abroad next year 1 you get a pay rise next year 5 you have to give a presentation in English 2 you win a lot of money 6 your company is taken over by a competitor 3 your computer gets a virus C

Discuss what went wrong in the following situation. Use the notes from the job list extract below. For example, If they’d set up the site properly, they wouldn’t have had so many complaints. ClickShop.com is in the Internet shopping business. In order to save money when it redesigned its website six months ago, it decided not to employ a specialist design company. Instead, the work was done by some of its own employees who had limited experience. Technical problems have now led to customer complaints, which have impacted on sales.

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set site up properly use an expert allocate a bigger budget listen to customer feedback

-

plan carefully not try to cut corners recognise problems earlier do more research


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7 e-commerce

Skills Presentations

A

7.4 Roger Marris, Head of Business Development at Smarterwork, gives

a presentation to some customers. Listen to the first extract and answer these questions. 1 What service does Smarterwork offer? 2 What do these figures refer to? a) 14 b) 60,000 c) 90 3 Who are its two types of users? B

7.5 Listen to the second extract and complete the stages in the process. • The client posts a project. • Suppliers visit the site and make bids. • .......................................................................................... • ..........................................................................................

▲ Roger Marris

• The client transfers the fee to a holding account. • .......................................................................................... • The task gets completed and the client signs off the work. • .......................................................................................... • Smarterwork takes a commission.

C

7.4 Listen again to the first extract.

1 Which of the following does Roger do at the start of his presentation? a) introduce himself c) tell a story b) greet the audience d) ask a question 2 Complete what Roger says at the start of his presentation. This morning, ................ 1 talk to you about Smarterwork. I’m going to ................ 2 an overview of Smarterwork, then ................ 3 you about our two types of users and finally ................ 4 how it all works. Feel free to ask any questions you like as we go along. D

7.5 Listen again to the second extract. Note down the language Roger uses to introduce the stages in the process. For example, Firstly …

E Match these expressions from the presentation to headings in the Useful

language box. 1 Can you just raise your hands? 2 The great thing about the Internet is … 3 What that means is …

4 Right. The next thing I’d like to do is ... 5 As you can see, it outlines the steps involved.

Useful language Commenting I think that’s interesting because ... I think what this means is ...

Referring to visuals Emphasising Involving the audience OK, what is Smarterwork? I’d just like to highlight ... Let’s look at the chart. Let me draw your I’d like to stress the How many of you have attention to the table. importance of ... heard of ...? Changing subject OK, I’ll move on to ... Turning now to ...

F Prepare a three-minute presentation on a subject of your choice. For example,

a product or service, your organisation or institution, or a city you know well. 59


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CASE STUDY

7

KGV Europe

Background

Market study

KGV is a traditional high-street music retailer. Based in Amsterdam, it has 12 stores in the Netherlands, three of which are megastores. Some years ago, it expanded into the rest of Europe and now owns 65 stores – eight of these are megastores. The company is at present going through a difficult period. Over the last three years, profits have steadily fallen, from e450 million to e290 million. The megastores’ sales have risen by 8%, accounting for 55% of the company’s turnover, but the increased revenue has been achieved only by heavy expenditure on advertising and promotion. Fierce competition, a narrow product range and a lack of innovation are some of the reasons for KGV’s poor performance. The management are concerned, especially, that they are not exploiting the opportunities offered by selling through the Internet.

A study by KGV’s Marketing Department was recently carried out and it produced the following findings:

KGV CUSTOMER PROFILE 50

1 It is estimated that, in five years’ time, 70% of all music products will be bought via the Internet. 2 Sixty-five percent of consumers under the age of 30 prefer to do their shopping via the Internet. 3 KGV’s customers would like stores to provide a wider product range (see chart 1). 4 Average spending per month in KGV’s medium-sized stores is highest among the 41– 60 age group (see chart 2). 5 Spending on music products by the over60 age group will increase significantly in the next ten years in Europe. 6 The various age groups have clear preferences as to the type of music they enjoy and purchase (see chart 3).

% of annual sales

40 30 20 10 0 under 30

31–40

41–50

Age group

60

over 50

7.6 Listen to a conversation between Michael Johnson, a director of KGV, and Hanna Driessen, the recently appointed Financial Director of the company. They are discussing the company’s strategy before a forthcoming management meeting about KGV’s future. Make short notes on the opinions they express.


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7 e-commerce CHART 1: Preferences for additional products / services (% of respondents for each category)

CHART 3: Preferences of consumers for music products Key

Age 18–40 spoken word (talking books) computer games holiday information computer software banking services concert tickets

Age 41 +

4 62 35 58 25 70

44 15 48 32 12 75

25%

Classical Dance music Jazz Pop / Rock Soul / Reggae

5%

35%

30% 5%

18–25 years

20%

CHART 2: Average spending per month in a medium-sized store 60

26–40 years

10%

20%

40%

50

10%

40

15%

g

20%

30 33%

20

41–60 years

27% 5%

10 0 18–25

26–40

41–60

20%

60+

7% 3%

Age 60+ years 70%

Task A You are a member of KGV’s management. In small groups, prepare and give a presentation for your colleagues concerning KGV’s future strategy. Your presentation should consider the following questions: 1 Should KGV keep some of their stores but sell at least 50% of their goods via the Internet? 2 Should they close all their stores and offer a total online service? If so: a) what risks would be involved? b) how would the costs of the business change? c) what organisational changes would the company have to make? 3 Should KGV stay as it is, but follow Hanna’s advice: a) outsource advertising and promotion. b) introduce new products. If so, which ones? c) consider targeting new segments of the market. 4 What are the consequences of the chosen strategy? How can the problems be minimised? B Meet as one group. One of you should lead the meeting. Decide what KGV’s future strategy should be and work out an action plan for the next year.

Writing You are the Managing Director of KGV. Write an e-mail to a director of the company who was unable to attend the management meeting. In the e-mail, summarise the discussion and decisions of the meeting and ask the director for his/her comments. Writing file page 139

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UNIT 7 MARKET LEADER  

UNIT 7 MARKET LEADER

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