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    Week Five: Measuring Market Opportunities: Forecasting and Market Knowledge

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    Week Five: Measuring Market Opportunities: Forecasting and Market Knowledge

    Uploaded by

    Nguyen Anh
    34 views12 pages

    Original Title

    MStr 05

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    Copyright:

    © All Rights Reserved
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    Download as ppt, pdf, or txt
    34 views12 pages

    Week Five: Measuring Market Opportunities: Forecasting and Market Knowledge

    Uploaded by

    Nguyen Anh

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 12

    5

    WEEK FIVE
    Measuring Market Opportunities:
    Forecasting and Market Knowledge

    McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
    A Forecaster’s Toolkit

    o Importance of knowing the size of the


    potential market
    o Market potential estimate as a starting
    point for preparing a sales forecast

    5-2
    Sales Forecast

    o Two broad approaches for preparing a sales


    forecast are:
    o Top-down approach
    o A central person takes responsibility for
    forecasting and prepares an overall forecast
    o Bottom-up approach
    o Each part of the firm prepares its own sales
    forecast, and the parts are aggregated to create
    the forecast for the firm as a whole
    o Common in decentralized firms

    5-3
    Methods for Estimating Market Potential and
    Forecasting Sales

    o Statistical methods
    o Observation
    o Surveys or focus groups
    o Market tests

    5-4
    Statistical Methods

    o Advantages
    o Useful in established firms for established
    products
    o Likely to result in a more accurate forecast than
    other methods under stable market conditions
    o Limitations
    o Assumes the future will look very much like the
    past
    o Requires history
    o Not useful for new products with no history

    5-5
    Observation

    o Advantages
    o Based on what people actually do
    o Limitations
    o Typically not possible for new-to-the-world
    products
    o Requires prior examples to observe

    5-6
    Surveys or Focus Groups

    o Advantages
    o Many different groups of respondents can be
    surveyed
    o Does not require history or prior examples
    o Limitations
    o What people say is not always what they do
    o People may not be knowledgeable, but when
    asked their opinion, they may provide it
    o What people imagine about a product concept in
    a survey may not be what is actually delivered
    once the product is launched
    5-7
    Market tests

    o Advantages
    o Closest forecasting method to the true
    market
    o Limitations
    o Expensive to conduct
    o Competitors can deliberately distort
    market conditions to invalidate the test

    5-8
    The Adoption Process

    o Involves the attitudinal changes


    experienced by individuals from the
    time they first hear about a new
    product, until they adopt it

    5-9
    The Adoption Process (continued)

    o Adoption rate of the process depends


    heavily on:
    o Risk
    o Relative advantage
    o Relative simplicity
    o Compatibility with current ideas and
    behavior
    o Ease of small-scale trial
    o Ease of communication of benefits

    5-10
    Diffusion of Innovation Curve

    5-11
    Marketing Research

    o Intended to address carefully defined


    marketing problems or opportunities.
    o Questions to be asked by a critical user of
    marketing research:
    o What are the research objectives? Will the
    proposed study meet them?
    o Are the data sources appropriate? Secondary
    or primary? Qualitative or quantitative?
    o Is the research itself well designed?
    o Are the planned analyses appropriate?

    5-12

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