Seasonal marketing and timing new product introductions

Virtually every product is seasonal; seasonality often dictates business strategy. In this article, the authors (1) show how to add known seasonal patterns to any dynamic model parsimoniously and without changing the fundamental model assumptions, (2) illustrate how their method provides strategic implications for timing new product introductions, and (3) provide an empirical application. The authors transform time so that, during high seasons, time is moving faster than normal time. Traditional methods only adjust sales, independent of the underlying sales model. The authors' method also changes the product's growth along its life cycle and suggests that timing introduction decisions are dependent on the shape of the product's life cycle. The authors' empirical work compares their theoretical results with empirical observations. With data for ail major films released between July 1993 and 1995 (673 films), the authors estimate the seasonal pattern for the motion picture industry and compare their theory with studio behavior.