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Trading up and down and the Business Cycle

Trading up and down are product strategies and are closely related to the business cycle. It seems that firms trade up during periods they are doing well and then trade down during recession. Why do all business seem to follow the same?

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Interesting question! Please see my response attached, which is also presented below. Good luck with your continued studies and take care.

RESPONSE:

1. Trading up and down are product strategies and are closely related to the business cycle. It seems that firms trade up during periods they are doing well and then trade down during recession. Why do all business seem to follow the same?

This is because successful businesses pay attention to (and do their own) marketing research, which informs business decisions. Product strategies are proven marketing strategies that have worked over time and are, indeed, grounded in years of economic and marketing research. In fact, theories develop out of these research findings, which is a valid and reliable source of information (if the research is done in a scientific way) to make business decisions. For examples, studies that look at consumer buying behavior, like who's trading up in comparison to income and economic trends, have informed theory and product ...

Solution Summary

Trading up and down are product strategies and are closely related to the business cycle. It seems that firms trade up during periods they are doing well and then trade down during recession. This solution explains several reasons why all (or most) businesses seem to follow the same.

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