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Management article
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Reference no. 88401
Authors: William Barnett
Published by: Harvard Business Publishing
Published in: "Harvard Business Review", 1988

Abstract

Forecasting total market demand can be crucial to creating a smart marketing strategy. Some companies - and even whole industries - have learned the hard way that a product''s historical demand curve doesn''t necessarily predict future demand. An accurate total market demand forecast can yield clues about future product performance. Here are the four steps to creating one: 1) define the market, 2) divide total industry demand into segments, 3) find out what drives demand in each segment and project how those drivers might change, and 4) assess the risks to the forecast and decide which assumptions are most critical to success. Just going through this process can help managers better understand the real world in which they operate.

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Abstract

Forecasting total market demand can be crucial to creating a smart marketing strategy. Some companies - and even whole industries - have learned the hard way that a product''s historical demand curve doesn''t necessarily predict future demand. An accurate total market demand forecast can yield clues about future product performance. Here are the four steps to creating one: 1) define the market, 2) divide total industry demand into segments, 3) find out what drives demand in each segment and project how those drivers might change, and 4) assess the risks to the forecast and decide which assumptions are most critical to success. Just going through this process can help managers better understand the real world in which they operate.

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