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Market Potential Forecasting for Strategic Planning

Explore the importance of forecasting in organizational demand analysis, learn about market potential, sales forecasts, and the role of forecasting in planning strategies. Discover various methods, such as statistical series and market research, to determine market and sales potentials.

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Market Potential Forecasting for Strategic Planning

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  1. Organizational Demand Analysis Chapter 6

  2. Forecasting • Why is forecasting important?

  3. Organizational Demand Analysis • Market Potential • “Maximum possible sales of all sellers of a given product in a defined market during a specific time period.” • Sales forecast • “Maximum share of market potential an individual company might expect for a certain product or product line.” • Example

  4. Forecasting • Where to get information? • Internet • Census bureau • Competitors • Customers • Issues

  5. Forecasting • Potential for Planning Strategy • Forecast helps to plan: • Engineering design and implementation • Marketing and commercial development • External stakeholders • Potentials: Planning and Controlling by Segment • Segment market • Allocate expenditures

  6. Forecasting • Life Cycle Potential • Role of the Sales Forecast • What does it do? • Applying Market Potential and Sales Forecast • Market potential • Sales forecast • Supply chain implications

  7. Determining Market & Sales Potentials • Statistical Series Methods • Easy if • Example • Single Series Method • Make sure series is related to demand for product • Determine the relationship • Estimate future values • Independently forecasting • Rely on government or industry forecasts 4. Determining market potential

  8. Market Research • Surveys • Advantages • Disadvantages • Role of Forecasting

  9. Market Research • Forecasting Methods • Qualitative methods (AKA management judgment and subjective techniques) • Executive judgment • Advantages • Disadvantages • Sales force composite • Advantages • Disadvantages • Delphi method • Advantages • Disadvantages

  10. Market Research • Forecasting Methods • Quantitative methods (systematic or objective forecasting) • Time series • Historical data to project future • Components • Trend • Cycle • Seasonal • Irregular

  11. Market Research • Regression or causal techniques • Determine relationship between sales and an outside variable • Requirements • Limitations • Spurious relationships • Historical data • May not work • Several methods= Better accuracy

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