business cycle

Examples of business cycle in the following topics:

• General Economic Conditions

  • Marketers must be aware of the business cycle, and react appropriately according to which stage of the cycle the economy is in.
  • Fluctuations in our economy follow a general pattern known as the business cycle.
  • The four stages in the business cycle are: prosperity, recession, depression, and recovery (see and try to identify the different stages).
  • We know that the cycles will occur.
  • We just cannot predict exactly when or how severe the cycles will be.

• Decline

  • The decline stage of the product life cycle is the one where the product ultimately 'dies' due to the low or negative growth rate in sales (see ).
  • It is important to note that product termination is not usually the end of the business cycle; rather, it is only the end of a single entrant within the larger scope of an on-going business program.
  • As the market grew, businesses learned to be more efficient in producing the PC and prices came down.
  • This stage of the product life cycle is the terminal stage where sales drop and production is ultimately halted.
  • Identify the characteristics of a product in the decline stage of the product life cycle.

• The Product Life Cycle

  • Product development and product life cycles go hand-in-hand.
  • It is important that businesses continually develop new products to replace those that are declining.
  • The product life cycle (PLC) describes the life of a product in the market with respect to business/commercial costs and sales measures.
  • Products have a limited life and, thus, every product has a life cycle.
  • The product life cycle begins with the introduction stage (see ).

• Buying Situations

  • Companies seek long-term relationships as any experiment with a different brand will have an impact on the entire business.
  • Firms need to be prepared to engage buyers throughout the cycle.
  • The problem is that marketers have to face the realities of the B2B buying cycle, which include:
  • Understanding the buying cycle and the key needs buyers have at each point can help marketers and sales reps to create a knowledge base with relevant content that a sales team can leverage during the sales cycle.
  • Like B2C businesses there are similar buying types in B2B sales activities that include new buys, straight re-buys and modified re-buys.

• Purchase Behavior

  • Business customers - as compared to consumers - tend to be more rational, are more concerned with quality, and look to make lasting relationships.
  • Business-to-business or B2B marketing targets markets where the end users or customers are the purchasers of goods and services.
  • Business customers also purchase a wide variety of different services, depending on their business needs.
  • However, like consumer markets, business marketers monitor and analyze customer purchase behavior to develop segmentation strategies and customer intelligence.
  • Because B2B sales cycles can extend over months and even a few years, the business customers are more cautious and rational in their purchasing decisions than day-to-day consumers.

• Characteristics of Business-Customer Interactions

  • Business-customer interactions occur over a wide range of communication channels, such as phone, email, web, and text.
  • Although business-to-business (B2B) companies use many of the same communication channels as business-to-consumer (B2C) companies, certain characteristics of B2B customer interactions differentiate them within the marketplace.
  • Because the sales cycle can extend much longer than in B2C sales cycles, B2B companies seek long-term relationships with other business brands.
  • Consequently, brand loyalty is much higher than in the consumer goods market due to amount of time invested during the B2B sales cycle.
  • The relationship between a business seller and its business customer does not end after the transaction is finalized.

• Impact of the Product Life Cycle on Marketing Strategy

  • The stage of the life cycle of the product affects how it is marketed.
  • The stages through which individual products develop over time is called commonly known as the "Product Life Cycle".
  • The product life cycle is a well-known framework in marketing.
  • According to Harvard Business School professor Youngme Moon, though the product life cycle concept has been used successfully over the past 40 years, it has made marketers assume that there is only one trajectory for successful products.
  • By viewing the product life cycle in the same way, marketers pursue similar positioning strategies for products and services during each stage of the life cycle.

• Product Life-Cycle Curve

  • It is important for marketing managers to understand the limitations of the product life cycle model.
  • A given product may hold a unique product life cycle shape such that use of typical product life cycle models are useful only as a rough guide for marketing management.
  • Facebook is in the mature phase of the product life cycle.
  • No new or obsoleting technology is expected to appear soon which would put Facebook out of business.
  • The iPod touch is currently in the mature phase of the product life cycle.

• Defining Business Marketing

  • Business marketing includes all activities involved in communicating the value of a business's products and services to another business.
  • Like business-to-consumer (B2C) marketing, business-to-business (B2B) marketing, or business marketing, relies on product, price, placement, and promotion to competitively position the product offerings, promote the brand, and efficiently use company resources.
  • B2B marketing spans all types of businesses and industries.
  • B2B sales cycles can last more than several months and involve numerous stages before the sale is completed.
  • A trade show is a common promotional element in business marketing.

• Types of Buying Decisions

  • Consumer behavior and business behavior can differ because their buying processes are different.
  • Consumers will often buy on emotion or impulse whereas businesses will buy based on need.
  • It will also affect the product life cycle.
  • Emotional tactics don't work well with businesses.
  • Businesses are also worried about price and return on investment.