Demand Forecasting For A New Product

There are many approaches we can adopt in order to exercise an accurate demand forecasting for a new product. Generally, firms apply the following approaches to forecast their products.

• Substitute Approach -The demand may be estimated based on the demand of its substitute existing in the market.
• Evolutionary Approach – Assessing the demand for a new product,  the growth and evaluation of the existing product will be taken into account
• Buyers or consumers view – The firm takes the review from its customers about the products.
• Vicarious approach (or Experts’ opinion) – The firm takes the opinions from the experts in the related field about the products.
• Sales experience approach (or Market test method) –  Demand will be estimated on the basis of sales in the sample market.

In other word of presentation, the following methods could be applied as the product demand forecasting for a new product.

1. While assessing the demand for a new product the growth and evaluation of the existing product will be taken into account. For example, the demand for LED T.V. sets may be estimated from the demand for CRT Box TV sets.

2. The use of opinion poll of the knowledgeable persons can be used for demand forecasting for a new product.

3. The demand for a new product may be estimated based on the demand of its substitute existing in the market.

4. The demand for a new product may be estimated by offering the new product for sale in a sample market. Total demand will be estimated on the basis of sales in the sample market.

Most used Demand forecasting softwares in United States of America, United Kingdom, Canada and Australia are: QuickBase, Megaventory, SAP Supply Chain Management, Logistically TMS, Infor.