Forecasting demand for new products

The forecast of demand for the products with which you plan to enter the market is key information for decision-making. The study will allow you to avoid risks, which means you will save several tens of thousands of dollars. It will also provide information on which direction to develop and an understanding of the financial horizon for your products.

Many companies planning to launch a new product or service on the market are faced with the question of justification for their investment. Demand can be predicted with a confidence level of 80 to 95% using marketing research.

Based on the results of the study, in order to forecast demand for new products, pessimistic, average and optimistic scenarios are usually calculated. This allows you to analyze the company’s financial results and make a final decision on introducing a product or service to the market.

In addition to forecasting demand, it is also recommended to evaluate the market potential. Market potential is the maximum possible capacity in a given market in a given region. Indicators are assessed using mathematical models that take into account the likelihood of consumers overestimating or underestimating interest in products, the size of the average check or average purchase, and the influence of competitive offers. To assess the potential - correction for rising prices, economic growth, macroeconomic trends and much more.

The minimum size of a representative sample for such projects per region is 400 questionnaires, the number of in-depth interviews is at least 8-12 per region and segment of the target audience (if conducted), the number of focus groups is at least 2-3 ( if carried out). By region we mean any territory for which separate analytics is required (this could be, for example, a city or country). The minimum period for collecting data for the specified amount of data is 5 working days.

The cost of a project to forecast demand for a new type of product consists of the cost of collecting a selected number of in-depth interviews, focus groups, questionnaires (fees are charged only for fully completed questionnaires) and the cost of analytics (usually no more than 15% of the cost of data collection)

You can calculate the cost of one questionnaire yourself using our calculator (you will need to enter the number of open and closed questions in the questionnaire, quotas)

The cost of such a study is from 2000 £ (the cost is indicated for a minimum sample).

Methods for forecasting demand for new products may be different. This is usually a combination of qualitative (focus groups, in-depth interviews) and quantitative approaches (surveys) to data collection. In addition, the choice of methodology depends on the presence of a product or service on the market: it often happens that there are no analogues on the market.

The most accurate method of forecasting demand is the consumer method. To make calculations based on it, it is necessary to conduct a survey of a representative sample of consumers. The analogy method is used for new markets, assessing demand for new, unique products in addition to the specified survey. In this case, a region is taken that is similar in all respects: population, productivity, consumption standards, level of development and other parameters important for the market in question.

BCGroup's work to forecast demand for new products is structured as follows:

1. An NDA (confidentiality agreement) is signed between BCGroup and the company;
2. A BCGroup specialist studies product features and international experience;
3. A BCGroup specialist agrees with the customer on the research methodology, the version of the questionnaire for the survey and the guide for focus groups or in-depth interviews;
4. BCGroup conducts the qualitative stage of the research, determines the first reactions of the target audience, and, if necessary, edits and approves the final version of the survey questionnaire;
5. BCGroup interviewers conduct a survey (personal, telephone or online survey) of the target audience (possible survey of up to 5,000 people per day);
6. Next, the BCGroup employee transfers the data array to the customer’s representative in Excel or SPSS format;
7. After 10-15 days, a BCGroup employee sends an analytical report to the customer based on the results of forecasting demand for a new type of product. Usually this is a full version of the report with a detailed description of the calculations and an executive version in the form of a presentation of up to 20 slides (sample reports)