A market forecast is a core component of the market analysis. It projects the future numbers, characteristics, and trends in your target market.
Broadly, there are two categories used by marketers: Methods Based on Judgment and Methods Based on Statistical Sources.
Within Methods Based on Judgment, there are Intention Surveys, Role Playing, Expert Opinions, Conjoint Analysis, and Judgmental Bootstrapping methods. Within Methods Based on Statistical Sources, there are Extrapolation Methods, Rule-based Forecasting, Analogies, Expert Systems, Multivariate Time Series, and Econometric Methods.
Choose, describe, analyze, and critique one method each from Methods Based on Judgment and Methods Based on Statistical Sources. Discuss which method you would use for forecasting new product sales. Why?
One of the modern marketing based on judgment is the customer survey. This method is often used to determine how the customer is going to buy when they are going to buy, and the products that the customer is going to buy. Customer surveys provide an excellent opportunity to learn about the behavior of consumers and how to approach them through marketing. The main intention of a consumer survey is to collect information about consumer behavior patterns. It is a method widely used today by several organization and has been useful in the determination of the behavior of consumers and their alignment.
Another method based statistical sources is the rule-based forecasting. This is an expert system that employs judgment to create and apply rules for combining explorations. It combines domain knowledge and statistics to provide a more forecasting technique. It uses time series features to choose and weigh exploration techniques. Domain knowledge is acquired in a structured manner, e.g., the expectation of managers about trends. This approach is most useful when it is based on good domain knowledge. The good thing about RBF is that some of its rules can be used alongside traditional exploration procedures.
In the forecasting of new product sales, I would use a customer survey. Consumer needs and preferences often change with time and location. Therefore, customer survey would describe the actual behavior of the consumers at that time and place. Customer survey gives an opportunity for a business to gain insight into its brand, or a future product. It would help determine whether your product would meet the demands of the market. The only way to know whether your product would be sold widely is to decide whether or not it would fit the needs of the consumers. This can be achieved through customer surveys to know what they like, prefer, and what they intend to have. The result of the study would be weighed with what the new product can offer to forecast the rate of sales.