Why a Recession Might Be the Best Time to Launch a New Product

The Summer 2025 issue of MIT Sloan Management Review examines an unexpected marketing strategy — launching new products during economic downturns. At a time when most companies instinctively cut budgets, freeze innovation, and focus on survival, some choose to do the opposite: they release new products right in the middle of a recession. And as the evidence shows, this approach often leads to long-term strategic gains.

The article presents data showing that during periods of declining consumer demand, competitive noise also shrinks — ad costs drop, media space becomes less crowded, and consumers become more open to new options. Launching a product under such conditions increases visibility and strengthens early brand loyalty. Essentially, when others pause, the few who move can capture attention far more efficiently.

This idea is especially relevant in the Georgian context, where economic cycles, lari volatility, and external shocks frequently reshape consumer behavior. However, launching during a downturn is often avoided — startups hold off investment, larger firms freeze new product lines, and FMCG brands focus on retaining existing market share rather than expanding.

Yet this hesitation might be a missed opportunity. With fewer competitors advertising and lower barriers to attention, new brands can establish a foothold and grow faster once recovery begins. Additionally, consumer psychology shifts in downturns — buyers seek value, relevance, and innovation that speaks to their current needs, not just price.

For Georgia’s small and medium businesses — often limited in resources but agile in operations — this strategy could provide real advantage. In sectors like food and beverage, where local production meets shifting demand patterns, or in value-driven service offerings, a well-timed launch could outperform more resource-intensive campaigns during boom periods.

Of course, success doesn’t depend on timing alone. It requires a focused product, sharp positioning, and efficient channel strategies. But one thing is clear: economic decline should not automatically signal a freeze. It might just be the opening that lets your product break through.

Originally published in MIT Sloan Management Review, Summer 2025 (Volume 66, Number 4), the insights are based on analysis of companies that found growth mechanisms amid crisis. The contextual adaptation for Georgia was developed by BTUAI.