New products over the business cycle

Studies of new product innovations and new product strategy have traditionally abstracted from the impact of general economic conditions on marketing decision making. Despite the obvious importance of the role that the business cycle plays in determining product profitability, it is relegated to ancillary discussion. Timothy Devinney feels that part of this neglect is due to a lack of academic study of the influence of macroeconomic influences in the determination of marketing strategy. This article attempts to fill a portion of this gap by examining the role that the business cycle plays in new product introductions. The results show that new product introductions, in the aggregate, vary systematically over the business cycle, where the cycle is defined as having income, price, and investment components.