Demand Forecast Planning is the end-point of an ancient process of forecasting. Demand forecasting is a well developed combination of art and science that has its roots deep in ancient Greece. When the Greeks wanted to know what to expect of the future they would go to the Oracle at Delphi to consult the voice of Apollo, the god of prophecy. Precise demand forecasting is vital but challenging, demanding precise knowledge of past performance and insight into future conditions.
Wisdom of Crowds Methods:
One of the principle methods of demand forecasting is called the Delphi method. A panel of experts, kept anonymous from each other, answer predictive questionnaires. Their answers are described and compared by a moderator. Over several rounds a kind of negotiation process takes place in which the experts are encouraged to come to a consensus. The process ends when they converge on a common prediction or after failure in a set number of rounds.
The Focus Group is another application of the crowd-source principle of prediction. Small groups of targeted consumers are paid to discuss the viability, potential modification, and general usefulness of products. Analysis of crowd consensus forms the basis for market prediction.
Public prediction markets have also been used to predict the future viability of products. Investors are asked to gamble on the future of a product, sometimes by making real stock purchases. There are a number of commercial prediction markets, the largest being the Betfair in Great Britain and the Iowa Electronic Market in the USA. The television program, “Dragon’s Den” is an example of a prediction market on a small-scale.
Quantitative forecasting methods predict demand from past performance data. These methods use available market penetration data to assess seasonal trends and analysis of the long-term direction of markets as an index of the direction of future demand.
Consumer data methods rely on consumer surveys and data mining methods to assess how current products are being used and what kinds of improvement or new products should be introduced to fill unmet demand.
Experts advise companies to develop marketing staff to continuously assess the way their products are actually used in the marketplace in order to plan for future markets.
MaxQ Technologies, Inc offers the software supports to aid in precise characterization of the marketplace. Please contact us to discuss your challenges.