The most sensible approach is to look at the actual past demands. Some demands show some kind of trend or cycles, which could be used for our advantage and to forecast more accurately.
The common behaviors of the demand is as following:
Each one of these cases has its own way to forecast.
Technically speaking, you cannot really forecast the demand of a new product.
What you could do though, is do a survey, explaining the new product, maybe test it on a few hundred people, and then check out all that data, age groups which prefer it, social status which prefer it, etc..etc.. and you would be able to get a rough picture about the general demand.
You also have to consider factors about your product, is it a durable product? or a food? can it be considered as a necessity? or an alternative to another product? (Like chicken is an alternative to red meat).
There are many many factors to consider when and while launching a new product.
A company is selling a particular brand of tea and wishes to introduce a new flavor. How will the company forecast demand for it ?
The demand for a new product. A market survey of customer need analysis of sales records of competing products. The basis for making an estimate or a prediction of a new product can be used from a comparable product
Derived demand occurs when there is a change of customers' demand on particular product and produces have to buy new production equipment, which means that the change in consumer demand for a product affects demand for all firms involved in the production of that product. Joint demand has nothing to do with changing the production equipments. In this case, demand of the product depends on demand of its compliment. For example, demand on inc depends on demand on printers.
why is demand estimation and forecast important for managerial decision making
Public demand is the demand placed on something by the public. It may be a product, a new law, or almost anything, and is the level to which the public does or does not want something.
A company is selling a particular brand of tea and wishes to introduce a new flavor. How will the company forecast demand for it ?
Their newness and long lead times make it very difficult to forecast product demand accurately. In many cases, the project may be of special interest because it would give the company an option to break into a new market.
Manpower demand forecast refers to how many employees you project you will need at a future date. This is often times driven by whether or not the company is projecting an increase or decrease in production of their product or service. The less a company is projecting to produce, the less employees or "manpower" they will need to produce it.
Forecasting sales would be 3 type. 1. Seasonal ( festivals, events, famous dates, sports events, movie manias.. etc) 2. Demand based ( Completely depends on the demand our product has now and in the future). 3. Creating new waves (People get behind the new and happenings like crazy).
The demand for a new product. A market survey of customer need analysis of sales records of competing products. The basis for making an estimate or a prediction of a new product can be used from a comparable product
Derived demand occurs when there is a change of customers' demand on particular product and produces have to buy new production equipment, which means that the change in consumer demand for a product affects demand for all firms involved in the production of that product. Joint demand has nothing to do with changing the production equipments. In this case, demand of the product depends on demand of its compliment. For example, demand on inc depends on demand on printers.
forecast are wrong, because of some factors that may occur during the forecasting period. This factors may include, promotion, when company advertise their product without planning for the number of customer they can get during this period, even though, they have planned for the product to be sold during this period, there will still be an error in the forecast, because they may eventually get more customer or low customer.Also introduction of new product may make a forecast to be wrong since there is no historical data, that may suggest what the demand has been in the past, with this forecast may be wrong. Another reason is that customer may not want to buy the product again, this may due to fact that they have alternative product or a product that the price is reduced from the competitor, and if the customer did not buy the product,it will make the forecast to be wrong. One final point is that, unexpected event may make the forecast to be wrong. for example, it is believe that between December and November in the UK, snow must fall, if for a particular year there is no snow and a company has prepared to sell worm cloth, what would happen to that company during the period that snow does not fall,there forecast will definitely be wrong and they may loss.
It's known that despite the time and effort put into forecasting, in a dynamic market with lots of volatility, the forecast will always be inaccurate. [ It is not uncommon to hear of companies within High-Tech struggling to get demand forecast accuracy above 50 percent. The primary reason for this volatility is the Long Tail effect caused by short product life cycle and mass customization on the product side, and globalization and outsourcing on the operations side. The most sensible approach is to look at the actual past demands. Some demands show some kind of trend or cycles, which could be used for our advantage and to forecast more accurately. The common behaviors of the demand is as following: Stationary: here the demand show a smooth pattern where no increase or decrease in the demand. Linear: an steady increase or decrease in the demand Nonlinear: Where the demand takes a weird increasing or decreasing slopes. Trends: Seasonal: Where the demand is repeated after a certain period Cycle: this is easily detected graphically where the demand repeats in each cycle. Random: The most annoying type. it maybe meaningless to forecast such kind of behavior
Pull Advertising
flava girls bought a pair of shoes that call demand for new prouduct...
the market demand for the product. undefined. more inelastic than the market demand for the product. more elastic than the market demand for the product
demand forecasting is crucial for sales forecast