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Market Potential and Sales Forecasting. Chapter 06. Forecasts versus Potential. Five major uses of potential estimates. To make entry/exit decisions To make resource level decisions To make location and other resource allocation decisions To set objectives and evaluate performance - PowerPoint PPT Presentation
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McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Market Potential and Sales Forecasting
Chapter 06
6-4
Five major uses of potential estimates
To make entry/exit decisions To make resource level decisions To make location and other
resource allocation decisions To set objectives and evaluate
performance As an input to forecasts
6-6
Useful Sources for Potential Estimates
Government Sources Trade Associations Private Companies Financial and Industry Analysts Popular Press The Internet
6-8
Methods of Estimating Market and Sales Potential
Determine who are the potential buyers or users of the product
Determine how many are in each potential group of buyers defined by step 1
Estimate the purchasing or usage rate
6-10
Uses of Sales Forecasts To answer “what if” questions To help set budgets To provide a basis for a monitoring
system To aid in production planning By financial analysts to value a
company
6-12
Judgment-based Forecasting Methods
Naïve extrapolation Sales force composite Jury of expert opinion Delphi method Electronic Markets
6-15
Customer-Based Methods Market Testing
Situations in which potential customers are asked to respond to a product or product concept
Market Surveys A form of primary market research in
which potential customers are asked to give some indication of their likelihood of purchasing a product
6-25
Developing Regression Models Plot sales over time Consider the variables that are
relevant to predicting sales Customer status and traits “Our” marketing programs Competitive behavior General environment
Collect data Analyze the data
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