New product ideas move through various phases of validation, from initial concept development to product prototype. During this process, there comes a time when your company needs to make a decision about scaling up.
Sales forecasts are similar to concept-product tests but with more measures to determine the dynamics of sales and consumption. If there are multiple SKUs to be tested, each SKU is also evaluated. Research results are used as inputs into the forecasting model.
Is demand for your new product sufficient to scale up?
For either new products or extensions of existing products, we forecast volume and share using a combination of research and modeling, including the impact of cannibalization, distribution, SKU mix, estimates of repeat, and identifying additional opportunities for success.
Sales forecasting can be used in both fast-moving consumer goods (FMCG) and slower-moving industrial products. The important point is that as the financial risks increase, the economics of a sales forecasting exercise become more attractive – both as a hedge and for planning.
Can you afford not to forecast?
If the results are positive, the next steps depend on an assessment of how positive the results are, and the capital required for product introduction. Typically, the next step is a controlled test market. More aggressively, a client could execute a regional roll-out, or even a national launch if speed to market is a strategic advantage. In this latter case, real-time tracking is recommended to make fast changes.
If you are anticipating a market launch and need to understand what the size of the opportunity might be, please give us a call to discuss the details.