Client's new product forecasts produced highly inconsistent results, deviating as much as 50% from actual sales, despite the use of a well-known simulated test market technique.
Produce forecasts that are more closely aligned with actual in-market performance. Increase forecast consistency (reduce variance) so that estimates can be interpreted and compared; provide a basis for evaluating the relative sales potential across new products in the development pipeline.
A multi-stage solution to the new product sales estimation problem was designed. The answer did not lie in remedying technical inadequacies of any specific analytical tool. Rather, by making assumptions explicit within a stepwise process, forecasts were better understood, and where deviations from expectation occurred, diagnosis was possible.
Thinking Framework -- integrating client's pre-existing new product research in a decision structure
Thinkcast Simulation -- incorporating management assumptions about unmeasured factors
Integrated New Product Tracking Scorecard -- monitoring post-launch performance vs. forecast
Copyright 2013, Applied Thinking LLC
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