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0984 Competing in Business

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Complete Transcript
Welcome to English as a Second Language Podcast number 984 – Competing in Business.

This is English as a Second Language Podcast episode 984. I’m your host, Dr. Jeff McQuillan, coming to you from the Center for Educational Development in beautiful Los Angeles, California.

Go to our website at ESLPod.com and take a look at our ESL Podcast Store, where we have some additional courses in Business and Daily English.

This episode is a dialogue between Yoko and Cedric about competition – trying to be the best company, the most successful company, in your area. Let’s get started.

[start of dialogue]

Yoko: We used to be the only game in town. Now we have three competitors and they are luring away our customers.

Cedric: I know. We need to do something before we go under. What about price matching?

Yoko: Our prices are already competitive. If we want to focus on price, we’ll need to undercut our competitors.

Cedric: Slashing prices would be really hard on our profit margin, but these are desperate times. What do you think of a two-for-one deal? We could offer it for a limited time.

Yoko: We can do that if lowering our prices doesn’t work. I’m thinking we could go in another direction. What do you think about offering freebies or gifts with purchase?

Cedric: I think that’s a good idea. The more frills we include, the better our services look. What kind of frills?

Yoko: I’m not sure, but the more bells and whistles the better.

Cedric: And if all of this doesn’t work?

Yoko: Then we’ll be up the creek without a paddle!

[end of dialogue]

Yoko begins by saying to Cedric, “We used to be the only game in town.” The expression “the only game (game) in town” means the only person or only organization involved in this particular business or in this particular field. “To be the only game in town” is not to have any competition. You’re the only company that is doing what you are doing. Yoko says that is no longer true for her company.

She says, “Now we have three competitors and they are luring away our customers.” A “competitor” (competitor) is someone who competes with you. “To compete” is to try to beat someone at something, to be better than someone else. A competitor is a person or a company that does what you do, and tries to do it better than you do. So, if you’re buying a car in the United States, you could buy a Ford or a Chevy or a Toyota or a Mazda – all of those companies are competitors. They’re all trying to do the same thing, which is to sell cars.

Yoko says that her competitors are “luring away” customers. “To lure (lure) away” is a phrasal verb meaning to attract someone away from another person or another business. You can lure someone away by offering them something better, or perhaps the same thing but cheaper. Cedric says, “I know. We need to do something before we go under.” “To go under” is a phrasal verb meaning to go out of business - “to go broke,” we could also say – to no longer have the money to continue. It is especially used when talking about a business.

Cedric says, “What about price matching? Cedric is proposing that their company lower their price, or offer the same price for the product or service they’re selling as their competitors have. That’s what “price matching” is. Yoko says, “Our prices are already competitive.” “To be competitive” is to have similar qualities or characteristics of other companies or other options. When someone says, “We are competitive,” he means they have the same prices or similar prices, in this case, as other companies.

Yoko is saying that that isn’t really a good solution because their prices are already pretty competitive, pretty similar to the other companies. Yoko says, “If we want to focus on price, we’ll need to undercut our competitors.” “To undercut” (undercut) is to sell something at a lower price. So, if you undercut your competitors, you sell what you are selling at a lower or much lower price.

Cedric says, “Slashing prices would be really hard on our profit margin, but these are desperate times.” “To slash (slash) prices” is to lower or reduce or cut prices. “Profit” (profit) is how much your company makes. It’s the difference between the money you take in and the money you have to pay out for your expenses. Your “profit margin” (margin) is basically the amount of money, sometimes expressed as a percentage of money, that you make in your business.

So, if you have a ten percent profit margin, you are making or bringing in ten percent more than you are paying out. You are taking more money from your customers than you are spending to make your product and run your business. If you slash your prices, you may reduce or lower your profit margin. That’s what Cedric means when he says that “slashing prices would be really hard on our profit margin,” meaning it would lower our profit margin.

However, Cedric also says, “These are desperate times.” “Desperate times” refers to a situation where things are going badly quickly, and you need to do something quickly in order to save the situation – in this case, in order to prevent your company from going under. Desperate times are difficult times, challenging times.

Cedric says, “What do you think of a two-for-one deal?” “Two-for-one” means you get two of something for the normal price of one of something. So, if you are buying some pumpkin pies – and by the way, that’s my favorite kind of pie, in case you are looking for something to buy me for my birthday – you may be able to find some stores selling the pumpkin pies at a “two-for-one deal,” or a two-for-one price. That means you would get two pies for the price that you would normally pay for one. That’s what Cedric is proposing here, is suggesting here.

He says, “We could offer it for a limited time.” “For a limited time” means only temporarily, not forever. It’s a very good strategy, when selling, to put some sort of time limit on the price that you are selling something for. It motivates people. It gives people a reason to buy right now. If you don’t don’t give people a reason to buy right now, they’ll say, “Oh, well maybe I’ll buy it in the future,” and then they never actually buy it. That’s one of the things that good marketing does, is to motivate the buyer to buy the product. That’s part of what Cedric is saying here. He’s thinking of offering this two-for-one deal for a limited time.

Yoko says, “We can do that if lowering our prices doesn’t work.” Yoko wants to start by lowering the price, and then if that doesn’t help, they can try this two-for-one deal. Yoko says, “I’m thinking we could go in another direction,” meaning we could do something different. “What do you think about offering freebies or gifts with purchase?” A “freebie” (freebie) is, you may already have guessed, something you get for free. Some stores give away samples of their products.

If you go to the grocery store in the United States, sometimes the store will give you a cracker or a piece of cheese. That’s a freebie. You don’t have to pay anything for it. Of course, they’re doing that to get you to try the product so that eventually you will buy some. “Gift with purchase” is when you get something extra when you buy a certain product. So, a woman who goes to a store to buy some makeup – things to make her face look beautiful – the store may offer her a gift with purchase. If she buys this 50 dollar package of makeup, they will give her a two-dollar lipstick. Or ten-dollar lipstick. I don’t know how much lipsticks cost. I don’t buy lipstick. Not anymore.

Technically, a “gift” is something that someone gives you without you having to pay for it or give anything in return. So, “gift with purchase” doesn’t really make a lot of sense, because you are actually having to buy something. It’s really just another way of lowering the price of the thing you are buying. There’s also a very popular expression in advertising in English: “free gift.” Once again, gifts are free by definition. If you had to pay for the gift, it wouldn’t be a gift. But that’s just something that advertisers do to emphasize that it is free.

Cedric says, “I think that’s a good idea. The more frills we include, the better our services look.” A “frill” (frill) is something additional that’s nice to have, but isn’t necessary. If you stay in a hotel, it’s necessary for you to have a bed and a room and a bathroom. It’s not necessary for you to have a spa or a swimming pool or a restaurant or a lot of other things that many hotels have. Those extra things are called “frills.” That’s what Cedric is referring to.

Yoko says, “I’m not sure” after Cedric asks, “What kind of frills?” Yoko says, “The more bells and whistles the better.” “The more” here means the more that we have. The phrase “bells and whistles” is an old one to refer to the same basic idea as frill – additional items that make something more interesting or more exciting, but aren’t really necessary.

We often use this term when talking nowadays about technology. You can buy a phone that makes a phone call, or you could buy a phone that makes a phone call and Sends email and allows you to check the Internet, and so forth. Those extra things would be “bells and whistles.” They’re not, strictly speaking, necessary for a phone, but people like to buy phones that have those bells and whistles, those additional features.

Cedric says, “And if all of this doesn’t work?” meaning what happens if we try all of these things and we still don’t make money. Yoko answers, “Then it we’ll be up the creek without a paddle!” “To be up a creek (creek) without a paddle (paddle)” means to be in a very difficult situation, a situation that is going to be very difficult to get out of. A “creek” is a small river. A “paddle” is something you use to move a boat in the water just with your arms and hands. You use a paddle with small boats, typically. The whole expression taken together, however, means to be in a difficult or challenging situation.

Now let’s listen to the dialogue, this time at a normal speed.

[start of dialogue]

Yoko: We used to be the only game in town. Now we have three competitors and they are luring away our customers.

Cedric: I know. We need to do something before we go under. What about price matching?

Yoko: Our prices are already competitive. If we want to focus on price, we’ll need to undercut our competitors.

Cedric: Slashing prices would be really hard on our profit margin, but these are desperate times. What do you think of a two-for-one deal? We could offer it for a limited time.

Yoko: We can do that if lowering our prices doesn’t work. I’m thinking we could go in another direction. What do you think about offering freebies or gifts with purchase?

Cedric: I think that’s a good idea. The more frills we include, the better our services look. What kind of frills?

Yoko: I’m not sure, but the more bells and whistles the better.

Cedric: And if all of this doesn’t work?

Yoko: Then we’ll be up the creek without a paddle!

[end of dialogue]

Our scripts are full of bells and whistles thanks to our wonderful scriptwriter, Dr. Lucy Tse.

From Los Angeles, California, I’m Jeff McQuillan. Thank you for listening. Come back and listen to us again right here on ESL Podcast.

English as a Second Language Podcast was written and produced by Dr. Lucy Tse, hosted by Dr. Jeff McQuillan. Copyright 2014 by the Center for Educational Development.

Glossary
the only game in town – the only person or organization involved in a particular business or field, without any competitors

* Our restaurant used to be the only game in town, but in the past four years, more than 10 other Italian restaurants have opened.

competitor – a business that offers similar products and services to similar customers, so that two companies are trying to sell to the same customers

* How can we prevent our competitors from copying everything we do?

to lure away – to attract someone away from another person or business

* Aren’t you worried that Sean’s attractive new receptionist will lure him away from you?

to go under – to go broke; to become bankrupt; to become unprofitable and have to close a business

* The bad weather has made a lot of orange growers go under.

price matching – the practice of selling one’s product for the same price that other companies are selling it for

* This store has a great price matching policy, so if you see another store advertising that it will sell something for less, they’ll adjust the price.

competitive – with similar characteristics and qualifications, making something equally attractive

* You’ll need to have at least a master’s degree if you want to be competitive in this job market.

to undercut – to sell something at a lower price than one’s competitor

* We’re already selling these gadgets for less than the cost of manufacturing them. How could anyone undercut us?

to slash prices – to reduce prices very quickly by a very large amount; to lower the price of something a great deal

* The furniture store is slashing prices to reduce inventory before the start of the next year.

profit margin – the difference between the sales price and the cost of producing that good or service; the net proceeds from a sale

* We can increase our profit margin by raising the sales price or reducing the manufacturing cost.

desperate times – periods of time that are very difficult or challenging and leave one with few options, requiring people to do things they might not normally do

* These are desperate times for many homeowners who are forced to sell their home for less than they bought it for.

two-for-one deal – an arrangement where customers buy one item and get a second item for free as an incentive to buy more than they normally would

* The drugstore is offering a great two-for-one deal on makeup this week.

for a limited time – temporarily; not permanently; not forever; with a defined amount of time

* For a limited time, the car dealership is offering three years of oil changes and other car maintenance with any new car purchase.

freebie – something that is given to someone at no cost, especially to encourage that person to come into a store and buy something while he or she is there

* What percentage of people came in just for the freebie, and what percentage bought something else while they were here?

gift with purchase – something that is given to a customer when he or she buys something, used to show appreciation for their business and to encourage people to buy more than they normally would

* Jas buys new lipstick only when she knows the department store is offering gifts with purchase.

frill – additional things that are nice to have, but are not necessary

* The spa offers a lot of frills, like champagne, chocolate-covered strawberries, scented lotion, and relaxing music.

bells and whistles – additional items that make something more interesting, exciting, and attractive, but are not necessary, especially when talking about technology

* These new smart phones have so many bells and whistles, it’s hard to figure out how to call someone!

up the creek without a paddle – in a difficult or challenging situation with few or no opportunities to find a solution; without an easy way to fix a problem

* Both Paula and her husband lost their jobs last month, and now their mortgage payment is due and they’re up the creek without a paddle.

Comprehension Questions
1. Which of these incentives does not require the customer to buy something?
a) A two-for-one deal.
b) A freebie.
c) A gift with purchase.

2. What does Yoko mean when she says “we’ll be up the creek without a paddle”?
a) They’ll have to think of more creative solutions.
b) They’ll probably be fired.
c) They won’t have any other options.

Answers at bottom.

What Else Does It Mean?
to go under

The phrase “to go under,” in this podcast, means to go broke and become bankrupt, or to become unprofitable and have to close a business: “What percentage of restaurants go under in their first five years?” The phrase “to be under age” means to be too young to do something legally: “The law says it’s illegal to drink alcohol before turning 21 years old, but many teenagers are under age when they begin drinking.” The phrase “to be under the influence” means to be drunk or to have one’s thinking and decision-making skills be affected because one has used alcohol and/or other drugs: “If someone is clearly under the influence, it’s your responsibility to take away his or her car keys.”

to slash prices

In this podcast, the phrase “to slash prices” means to reduce prices very quickly by a very large amount, or to lower the price of something dramatically: “This computer was really expensive two years ago, but now retailers are slashing prices to make room for the newer models.” The verb “to slash” means to cut with a strong, quick movement: “The knife slashed through the air.” The phrase “to slash (one’s) wrists” means to cut one’s wrists (the body part between the arm and the hand) to try to kill oneself: “Fortunately, they found Emma right after she slashed her wrists, so they were able to take her to the hospital in time.” Finally, when talking about punctuation, a “slash” is a diagonal line (/): “Start the URL with http-colon-slash-slash, like this: ‘http://’.”

Culture Note
How Small Businesses Fight Undercutting Prices

Many “mom and pop businesses” (small, family-owned businesses) are being “edged out” (forced out of business) by large national or multinational “retailers” (stores that sell items to consumers) that use “economies of scale” (when the prices falls when large amounts are purchased) to sell their products at a lower price. But others are “fighting back” (working to not let something bad happen) even as those larger retailers are undercutting their prices.

One way for small business to fight is to improve their “customer service” (how customers are treated). The employees of large retailers may not be trained to provide good customer service, but the employees of small businesses “tend to” (usually) “take pride in” (feel good about) their work and may even know their customers personally. Customers who “value” (think something is important) good customer service may choose to shop at smaller businesses even if that means paying a little bit more.
Other small businesses whose prices are being undercut “react” (respond) by “filling a gap” (addressing a need that other businesses are not meeting) in the marketplace for a specific product or service. These businesses might become highly “specialized” (focused in only one area). Larger retailers sell the most popular items to the “masses” (large numbers of people), but smaller businesses can focus on selling less common products that have higher profit margins, but are purchased by a smaller group of consumers.

Finally, small businesses might try to “stay afloat” (remain profitable) by reducing “overhead” (expenses that are incurred regardless of sales volume, such as rent, utilities, and management). These businesses “count on” (rely on; depend on) larger retailers having several levels of management that add to their overhead which, “ultimately” (eventually) is “passed onto consumers” (included in the prices customers pay) in the form of higher prices.

Comprehension Answers
1 - b

2 - c