Product forecasting
Encyclopedia
Product forecasting is the science of predicting the degree of success a new product will enjoy in the marketplace
. To do this, the forecasting model must take into account such things as product awareness, distribution
, price
, fulfilling unmeet needs and competitive alternatives.
where,
Multivariate techniques such as regression can be used to determine the values of p, q and N if historical sales data is available.
model is another method used to estimate product sales.
The left-hand-side of the equation is the volume of purchases per unit time (usually taken to be one year). On the right-hand-side, the first parentheses describes trial volume, and the second describes repeat volume.
HH is the total number of households in the geographic area of projection, and TR ("trial rate") is the percentage of those households which will purchase the product for the first time in a given time period. TU ("trial units") is the number of units purchased on this first purchase occasion. MR is "measured repeat," or the percentage of those who tried the product who will purchase it at least one more time within the first year of the product's launch. RR is the repeats per repeater: the number of repeat purchases within that same year. RU is the number of repeat units purchased on each repeat event.
Assessor is owned by M/A/R/C Research ( http://www.marcresearch.com/ ) and can be used for concept screening, testing and volumrtric forecasting. In combination with Choice Modeling it can be used to optimize offers and products.
of advertising in multiple vehicles, the ultimate brand awareness can be projected through time.
Marketplace
A marketplace is the space, actual, virtual or metaphorical, in which a market operates. The term is also used in a trademark law context to denote the actual consumer environment, ie. the 'real world' in which products and services are provided and consumed.-Marketplaces and street markets:A...
. To do this, the forecasting model must take into account such things as product awareness, distribution
Distribution (business)
Product distribution is one of the four elements of the marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user.The other three parts of the marketing mix are product, pricing,...
, price
Price
-Definition:In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.In modern economies, prices are generally expressed in units of some form of currency...
, fulfilling unmeet needs and competitive alternatives.
Bass model
Bass model is one type of forecasting method primarily used in new product forecasting. In general, there will be no historical demand for new product. Then, Bass model tries to capture shape of demand of existing product and apply new product.where,
- F(t) is the probability of adoption at time t
- f(t) is the rate at which adoption is changing with respect to t
- N(t) is the number of adopters at time t
- m is the total number of consumers who will eventually adopt
- p is the coefficient of innovation
- q is the coefficient of imitation
Multivariate techniques such as regression can be used to determine the values of p, q and N if historical sales data is available.
Fourt-Woodlock model
The Fourt-WoodlockFourt-Woodlock equation
The Fourt-Woodlock equation is a market research tool to describe the total volume of consumer product purchases per year based on households which initially make trial purchases of the product and those households which make a repeat purchase within the first year...
model is another method used to estimate product sales.
The left-hand-side of the equation is the volume of purchases per unit time (usually taken to be one year). On the right-hand-side, the first parentheses describes trial volume, and the second describes repeat volume.
HH is the total number of households in the geographic area of projection, and TR ("trial rate") is the percentage of those households which will purchase the product for the first time in a given time period. TU ("trial units") is the number of units purchased on this first purchase occasion. MR is "measured repeat," or the percentage of those who tried the product who will purchase it at least one more time within the first year of the product's launch. RR is the repeats per repeater: the number of repeat purchases within that same year. RU is the number of repeat units purchased on each repeat event.
Preference
By examining the brand preference for each brand in a competitive context, preference shares for each brand can be determined.Assessor is owned by M/A/R/C Research ( http://www.marcresearch.com/ ) and can be used for concept screening, testing and volumrtric forecasting. In combination with Choice Modeling it can be used to optimize offers and products.
Awareness Model
Based on the brands planned marketing mixMarketing mix
The term "marketing mix" was coined in 1953 by Neil Borden in his American Marketing Association presidential address. However, this was actually a reformulation of an earlier idea by his associate, James Culliton, who in 1948 described the role of the marketing manager as a "mixer of ingredients",...
of advertising in multiple vehicles, the ultimate brand awareness can be projected through time.
Sources
- Frank Bass (1969), "A New Product Growth Model for Consumer Durables" Management Science, 15, 215-227
- A. J. Silk and G. L. Urban (1978), “Pre-Test-Market Evaluation of New Packaged Goods: A Model and Measurement Methodology,” Journal of Marketing Research, 15 (May) 171-191.