Bullying can affect a child right through their lives, even into adulthood, really is a scourge! Bullies are the ones with major issues, not the other way around so it's vital to let one's children understand that there's nothing wrong with them, rather it's the bully that has an inferior complex. Do nice people go around punching others playfully? I think not!
How to stop this? Difficult as most times the parents of these bullies also have issues!