In what ways can each of the business cycle stages affect consumers’ reaction to marketing strategies? Discuss with example
Business cycles are an important phenomenon that affects both the firms and customers. The different business cycle stages affects customer’s reaction to marketing strategies in the following ways;
The first way is through prosperity. In this stage the spending power of customers is high because of the low inflation. For instance, the customers respond positively to the marketing by making purchases.
The second way is depression where by the buying power of customers is the lowest and the unemployment rate is the highest. Customers tend to buy only essential items and reduce their spending to the minimum.
Another way is recovery. In this stage, the economy starts moving towards prosperity from depression. Employment rises and so is the daily spending capacity of people. Therefore, customers start to get involved in buying more goods and services.
The last way is recession where by the buying power of customers start to decline and unemployment rate rises. For example, customers become less attracted to advertisements and other promotion strategies.