1. Discuss the impact of economic environment on business.
to atratemic decision
Answers
Explanation:
3. Recession:
Recession is a period of economic activity when income, production and employment tend to fall. Demand for products and services are reduced. Specific activities cause recession. The slowdown in the high-tech sector, rising fuel prices, excessive consumer credit and terror attacks resulted in recession in America in 2001. Marketing strategies to counter recession are:
ADVERTISEMENTS:
i. Companies should improve existing products and introduce new ones. The idea is to reduce production hours, waste and the cost of materials so that companies can offer products at lower prices. Recession increases the demand for products and services that offer good value at lower prices. Business buyers buy products that are economical and efficient, offer value, help them to streamline practices and procedures, and improve their services to their customers. The idea should be to prompt consumers and business customers to buy more. The most potent way to end a recession cycle is to make it attractive for customers to buy more.
ii. In recession, business buyers postpone the purchase of new equipment’s and materials because they do not know if there will be demand for their products and services. Sellers should be willing to extend credit to buyers to get over their reluctance to purchase. In recession, sales of replacement parts and other services may become an important source of income.
iii. Companies should emphasize their top-of-the-line products and should promote product value. Customers with less to spend will look for demonstrated quality, durability and capability to save time and money. High priced, high value items do well during recession.
ADVERTISEMENTS:
iv. Companies should understand that though there are specific causes that trigger recession, it is perpetuated because consumers and businesses become uncertain about the future and are reluctant and scared to buy. They want to save for the worst time that will descend on them. Companies selling to consumers have special responsibility during recession. Once consumers start buying, businesses will start buying automatically. Therefore companies selling to consumers should generate confidence among them by offering them high quality products and services at reasonable prices and also extend credit to them. Companies should be prepared to do whatever it takes to make the consumers buy from them.