Use past history to forecast

2 approaches: Top down and future

bottom up sales forecasts
1. Statistical and Quantitative - assumes future will look like the
methods past
+ new forecasting methods
developed (statistical)
+ based on what consumers do
in the product market of interest
1. make explicit the assumption 2. Observation
Use macro trends analysis & on which forecasts are based - cant use this for new to world
porters 5 competitive forces products
Step 1 - ID managerial problem Keys to good forecasting - What people say is not what
& establish research objectives 2. use multiple methods Evidence based forecast they always do
3. Surveys
Observation, surveys & interview Survey of buyers intention
- new product is not exactly the
Primary same as compared to & market
internet docs Forecasters toolkit
conditions may have changed
Secondary 4. Analogy
new product is compared to
Step 2 - Determine Data sources similar product where historical
Qualitative and Quantitative data is available
small samples of data use as a Marketing Research
guide for subsequent quantitative - difficult to defend against
research (e.g focus groups & 5. Judgement evidence based
interviews) - Open to competitor getting
same info
determine data colection method 6. Market tests Expensive to run
used for new markets

Internet has aided this method

determine contact method
who sampling Step 3 - Design research report on geographical area %
Module 8
Buying Power Index (BPI)
What size Design sampling plan report on ratio of consumption in
Measuring Market a category
Category Development Indices
Probability sampling Opportunities (CDIs)
Mathematics in forecasting Brand Development Indices Compare sales for a given brand
Random sampling what method
(BDIs

Convenience sampling take care not to have collector Step 4 - Collect data Internal Records Systems
bias

Compiled databases
statistical software Step 5 - Analyse Data
Market knowledge Marketing databases
Data mining
systems
Step 6 - Report results

Competitive Intelligence Systems e.g through other co's financials

Client ContactManagement Sales Automation software

systems
e.g Act / Goldmine