The COVID-19 pandemic has greatly affected the whole world many ways, medically and financially. In fact, the worldwide lockdown and quarantines have significantly affected every fiber of our society, especially our economy. Economic experts and observers are forecasting that if this will continue, another recession is most likely to happen. However, before we panic about economic stability and job security, let’s get the facts straight first about recession. Better yet, how do we know if we are already in a recession? The often-cited indicator of a recession is when two consecutive quarters have negative GDP.
Real income Employment industrial
Production, and wholesale-retail sales.” How do B2B companies react to recession? During recession, companies have one default decision – cut their spending to mitigate any losses, go out of business, and prevent layoffs. B2B buyers will still be making purchases but they will be more careful. According to the Harvard Business Review, consumers usually sort products into four categories during a recession: Essentials – these are the must-haves to the survival General Merchandise Stores Email List and the well-being of the company Treats – indulgences whose purchase are justifiable Postponables – wants and desires that are not necessary and can be bought at a later time Expendables – things that are both unnecessary and unjustifiable Based on the definitions above, the products and services that will be the first one to get cut are those that fall into the “Expendables” category while those that are.
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Factor in how these must-haves are defined. In light of the COVID-19 pandemic, the “essentials” are face masks, immune system booster, and Vitamins. To tech companies, for example, “essentials” are software that allows their employees to work from home immediately and seamlessly. An interesting finding on the buying behavior During a recession, a lot of companies are thrown into chaos and confusion. Companies are asking whether they should increase be Country List a or decrease pricing. Here’s something interesting, though: Although most B2B buyers say that they are sensitive to price increase, they seldom change suppliers when it happens. In a study conducted by Julia Cupman of B2B International, B2B buyers, especially in the industrial sector, tend to be passive during a price increase, even during a recession.