Made in Europe

by Jo Johnson, Fred Kapner, and Richard Mcgregor

Financial Times

Read article A.Almost every fashion label outside the top super-luxury brands is either already

manufacturing in Asia or thinking of it. Coach, the US leather goods maker, is a classic example. Over the past five years, it has lifted all its gross margins by manufacturing solely in low-cost markets. In March 2002 it closed its factory in Lares, Puerto Rico, its last company-owned plant, and outsources all its products.

Burberry has many Asian licensing arrangements. In 2000 it decided to renew Sanyo’s Japanese license for 20 ten years. This means that almost half of Burberry’s sales at retail value will continue to be produced under license in Asia. At the same time however, Japanese consumers prefer the group’s European-made products.

Sanyo is now reacting to this demand for a snob alternative to the Burberry products made in its factories across Asia by opening a flagship store in Tokyo’s Ginza, where it sells Burberry products imported from Europe.

In interviews with the FT, many executives say the top luxury brands will continue to be seen, particularly in Asia, as European. Domenico De Sole of Gucci says “The Asian Consumer really does believe – whether it’s true or not – that luxury comes from Europe and must be made there to be the best.’

Serge Weinberg, Chief Executive of Pinault Printemps Redoute, which controls Gucci, says it will not move Gucci’s production offshore. Yet some in the industry recognize that change may be round the corner even for the super-luxury brands. Patrizio Bertelli, Chief Executive of Prada, says:’ The “Made in Italy” label is important but what we are really offering is a style, and style is an expression of culture.’ He therefore recognizes that quality fashion items may not always need to be produced in Italy.

Amitava Chattopadhyay, professor of marketing at Instead, the business school, says:’ A brand is a set of associations in the mind of the consumer and one of these is the country of origin. For luxury goods, the role of the brand is crucial. To damage it is a cardinal sin and no brand manager will want to get the balance between manufacturing location and the brand image wrong’.

Reading Worksheet (TAKE PICTURE AND SEND TO PHILL March 20 15:00)

A. Pre-Reading Question1. Why do some companies make luxury products abroad rather than at home?

(Write at least 2 sentences)The cost of making the products at home is higher than making them abroad. Often, labor at home is more expensive than labor abroad. Making products abroad often leads to increased profit margins.

B. Read the article quickly and answer these questions.

1. Which brands are mentioned? Which country is each brand from?

Coach (USA), Gucci (Italy), Burberry (Great Britain/UK), and Prada (Italy) are mentioned.

2. Which companies make all of their products in their own country?

Gucci and Prada are made in Italy.

C. Which of these statements is True? Correct the false ones.

1. Coach no longer has a factory in Puerto Rico. True2. Coach, like many other companies, is outsourcing its products to reduce

costs. True3. Some Japanese people choose to buy Burberry products made I Europe

rather than in Japan. True4. Sanyo’s store in Tokyo sells Burberry products made only in Asia. False5. According to Domenico De Sole, the best luxury products are made in Japan.

False6. Gucci is planning to outsource some of its products. False7. Patrizio Bertelli believes that luxury fashion products should always be made

in Europe. False8. Amitava Chattopadhyay says that companies need to pay careful attention to

where they manufacture their products. True

Corrections

#4. Sanyo’s store in Tokyo sells Burberry products made in Asia and imported from Europe (lines 35-37).

#5. According to Domenico De Sole, the best luxury products are made in Europe. (line 42)

#6. Gucci is not planning to outsource its products. (lines 53-54)

#7. Patrizio Bertelli believes that luxury fashion products may not always be need to be produced in Italy because they can be produced in Asia under licensing agreements (lines 66-68)

D. Choose the best summary of the article

a) Asian consumers think that European luxury goods are of high quality. The current trend of making such goods in Asia could damage the reputation of these luxury brands.

b)

GRAMMAR REVIEW (TAKE PICTURE AND SEND TO PHILL March 20 th

15:00)

A. Complete the text with the appropriate passive form of the verbs given.

Guaraná energy drinks ________________ 1 (to sell) at outdoor music festivals in Europe for over a decade. However, it was only in July 2006 that the first Guaraná Shop _______________ 2 (to launch) in Valeport. A wide range of guaraná products can ______________ 3 (to buy) there. The shop is so popular in the Valeport area that it _________________ recently _______________ 4 (to expand). Maybe more Guaraná Shops ______________ 5 (to set up) across the country in the next few years. If that happens, more guaraná products ________________6 (to import) from Brazil. Meanwhile, the people of Valeport are delighted that all guaraná products available locally ___________ 7 (to test) by the Regional Food and Hygiene Commission on a regular basis. So far, all products ______________ 8 (to approve) by the Commission.

1. have been sold (pr pf)2. was launched (past simp)3. be bought (pres perf)4. has (recently) been

expanded 5. will be set up (fut simp)

6. will be imported (fut simp)

7. are tested (press imp)8. have been approved (pr

prf)

B. Match the sentence halves to make appropriate sentences.

Circle the numbers that have a dependent clause first.

1. I wouldn’t recommend investing there

a. after we’ve interviewed all the candidates.

2. Our visitors would like to see our new laboratory

b. maybe you could phone our new supplier.

3. As soon as the goods have arrived,

c. until the government offers adequate tax incentives.

4. Until their economy is stable,

d. we’ll let you know.

5. While I go through the contract,

e. when salaries go up.

6. In some countries, you never talk business

f. you shouldn’t invest in that region.

7. We can only decide who’s best for the job

g. before they return to Beijing tomorrow.

8. Demand for luxury goods h. while you’re having lunch.

often increases

1. c

2. g

3. d

4. f

5. b

6. h

7. a

8. e

GRAMMAR WORKSHEET 2 (TAKE PICTURE & SEND TO PHILL March 20 th

15:00)

A. Make one sentence or question from two. If a sentence does not require who/ which/ that/ where, leave it out.

EXAMPLE. I work with a few people. You might know them.

I work with a few people who you might know.

1. We stayed at a hotel. It was a very cheap hotel.The hotel we stayed at was a very cheap hotel. 2. I lent you some money. Have you got it?Have you got the money I lent you?3. The milk has gone bad. It is still in the fridge.The milk which/that has gone bad is still in the fridge.The milk which/that is still in the fridge has gone bad.4. Last night, we went to a restaurant. It serves Italian food.Last night, we went to a restaurant which/that serves Italian food.5. I'm going to visit a town. I was born there.I’m going to visit the town where I was born. 6. Tom is a computer scientist. He has a lot of experience.Tom is a computer scientist who/that has a lot of experience.7. I sent you an email. Have you received it?Have you received the email I sent you?8. You like the girl's dog. Have you heard from her?Have you heard from the girl whose dog you like?

B. Rearrange the words to complete sentences. Box the relative pronoun in each sentence.

EXAMPLE. author John Milton the Paradise Lost book wrote who favorite is

John Milton who wrote the book Paradise Lost is my favorite author. 1. remember time I when went the hiking we

I remember the time when we went hiking.

2. company makes closed store its that handbags The recently

The company that makes handbags recently closed its store.

3. which table the I from ugly IKEA is bought

The ugly table which I bought is from IKEA.The table which I bought from IKEA is ugly.

4. sunglasses my where favorite I The beach my lost is

The beach where I lost my sunglasses is my favorite.

5. hurt his man who leg went hospital to The the

The man who hurt his leg went to the hospital.

6. passport is whose woman The green Korean might a beThe woman whose passport is green might be a Korean.

Feedback

In part A, you can change articles to ‘the’ if you know what they are. o I’m going to visit a/the town where I was born.

You know which town (the one where he was born)o Last night, we went to the/a restaurant which serves Italian

food. You do not know which restaurant. If you choose ‘the,’ it

means there is only one restaurant that serves Italian food.

Remember, relative clauses describe the noun in front of them.o The woman whose passport is green might be a Korean.

(correct)o The woman might be a Korean whose passport is green.

(incorrect) Are we describing a Korean’s passport, or the woman’s

passport? The sentence is about the woman, and her

passport is green.

o The milk has gone bad which is still in the fridge. (incorrect)o The milk which is still in the fridge has gone bad. (correct)

The relative pronoun should go after a noun. ‘bad’ is an adj.

Pay attention to the meaning of the sentences when you write relative clauses.

o The company that recently closed makes is store handbags. (Incorrect)

o The company that makes handbags recently closed its store. (Correct)

If the company recently closed, it cannot make handbags. If the company closed its store, it can still make handbags

at its other locations. o The woman whose green passport might be a Korean (incorrect)

‘green passport might be a Korean’ means that the passport is a person (护照=人). The passport is not a person.

‘whose green passport might be a Korean’ describes the woman, so it is not a sentence. It has no verb (sbj, adj, verb

The woman [whose green passport might be a Korean]________.

Vocabulary Worksheet (TAKE PICTURE AND SEND TO PHILL)

A. Match these word partnerships to their meanings.

Vocabulary Definition1. brand loyalty a. the name given to a product by the company that

makes it2.brand image b. using an existing name on another type of product3.brand stretching c. the ideas and beliefs people have about a brand4. brand awareness d. the tendency to always buy a particular brand5. brand name e. how familiar people are with a brand6.product launch f. the set of products made by a company7. product lifecycle g. the use of a well=known person to advertise

products8. product range h. when products are used in films or TV programs9. product placement i. the introduction of a product to the market10. product endorsement

j. the length of time people continue to buy a product

B. Complete these sentences with word partnerships form Exercise A.

1. The creation of Virgin Cola, Virgin Air, Virgin Rail, and Virgin Bride is an example of brand stretching.

2. Consumers who always buy Levi’s when they need a new pair of jeans are showing brand loyalty.

3. Not enough people recognize our logo; we need to spend a lot more on raising brand awareness.

4. David Beckham advertising Vodaphone is an example of product endorsement.

5. A product lifecycle consists of introduction, growth, maturity, and decline.

6. The use of BMW cars and Nokia phones in James Bond films are examples of product placement.

Feedback

Product placement is not the same as product endorsement.

Product placement occurs when a company pays to have its product used in a movie or on a TV show.

o Above, the Corona Beer is being drunk in the movie Fast and Furious.

o Nobody is ‘selling’ Corona beer.o The company hopes that people who see Corona beer at the

movies will buy Corona beer for themselves.

Product endorsement occurs when a celebrity sells the product. o The celebrity’s face, image, words, or actions SELL the product.o The celebrity basically says “You should buy this because I use

it.”o Below is David Beckham’s product endorsement of Vodaphone.

Product stretching means all the products use the same name.

Product range may have products from the same company, but using different names.

Listening Worksheet (TAKE PICTURE AND SEND TO PHILL March 20 15:00)

LISTEN to track 1.5 to do activities A, B, and C. https://qiba.space/market-leader-intermediate-unit-1/

A. Four marketing executives at a cosmetics company, Marvel Plc, are talking about licensing their ‘Luc Fontaine’ product range to an Asian manufacturer. Listen to the conversation and answer the questions.

1. Why do the marketing executives at Marvel Plc want to license their ‘Luc Fontaine’ product range?They want to increase revenue.

2. What advantages does Susan Li offer to Marvel?Susan Li is well known in Asia, has a good reputation, has a modern factory, and a large customer base. She is also good at marketing and is a hard worker.

3. According to Barbara, what is the disadvantage of offering a license to Susan Li? a. Her products are at the lower end of the market. b. Susan’s products are in the cheap price range. c. Luc Fontaine is expensive and is sold to the high-end of the market, and Susan Li won’t be able to sell this kind of product.

4. What suggestion does Barbara make to her colleagues?Barbara suggests that her colleagues contact Mr. Takahashi from Japan. He makes skin care products and sells them under European labels.

B. Listen again and complete the extracts.

Marcia: Alain, how do you feel (1) about this? Is she the right person for us?

Alain: Definitely. In my opinion, she’s ideal.

Marcia: Right. Valerie, what do you think (2)?

Valerie: I agree. (3) because she’s very good at marketing. I’ve met her several times.

Marcia: Barbara, you’re shaking your head. What’s your opinion? (4)

Barbara: I’m afraid I can’t (5). I don’t think she is suitable at all.

Marcia: So what do you suggest then?

Barbara: I think we should (6) find someone else. I do have someone in mind.

Barbara: In my opinion, his company has a lot to offer. Why don’t we (7) meet him an see if he is interested?

C. Which of the phrases in Exercise B are:

1. asking for opinions? 1, 2,4

2. giving opinions? 3

3. agreeing or disagreeing? 3, 5

4. making suggestions? 6, 7