Methods of Market Forecasting

 

Making a successful methodology for your marketing efforts doesn't occur at the same point, and neither is it an issue only the marketing department has to deal with. When you carry out the marketing strategy, the whole organization will have to manage with the consequences. A significant part of the marketing strategy is the forecasting process. Maybe the main conjecture is the sales forecast, which estimates how much will be sold by the organization in a given time frame. The rest of the organization should be ready to meet the needs of the sales forecast.

When it comes to preparing forecasts, of the most extreme significance is accuracy. Suppose you overestimate how much consumers will demand your product. In that case, you could end up spending an unreasonably high amount of money on such things as manufacturing and distribution, only to be unable to recover it when the actual sales start to stream in. When you overestimate demand, you might overextend yourself monetarily and find that your revenue is inadequate for paying your vendors, suppliers, and other business creditors. At times, you might need to lay off your employees.

Performing an underestimation of interest levels can also be shocking for your company. When you bring a new product into the market, you have to market it to create demand. If you are incapable of delivering just the right amount of product as demanded by the market, then your market share is at risk of being snatched away from you by your competitors. In case your competitors' products can match or exceed yours in quality, then you might be unable to restore your market share.

Different Market Forecasting Methods

A forecast is an estimate of what is probably going to occur. This sort of estimate, however, is neither arbitrary nor frivolous. It is the product of a complex process. You can make a forecast for many different processes, and most forecasts are arrived at by blending several of these processes.

 

• Historic Trends/ Timeseries Model: We can always project the numbers based on historical data sets, and this forecast can be performed by analyzing the year-on-year growth trend. It can be extrapolated with three different scenarios based on the neutral forecast, lower confidence bound scenario, and upper confidence bound scenario.
• Demand-Supply Analysis: We can also forecast the future market based on demand-supply analysis by mapping the current situation and the factors associated with it like technological and commercial development, price change, etc., for both supply and demand sides. 
• Parent-peer Market Trend Analysis: This forecast can be performed by identifying the trends for parent and peer markets and understanding the similarities and differences between the respective trends. 
• Correlation Analysis: It can be performed by looking at the relationship between variables, one which will be called a dependent variable (in the market forecast, that would be our target segment or title), another one is an independent variable, a factor that will cause a change to the dependent variable.
• Model-Based Forecast: It is customized and combines various individual forecasting techniques such as Correlation Analysis, Historic trend/time series analysis, and factor analysis.
• Probabilistic Approach: It is based on the probabilities of future scenarios. In this technique, we forecast the market in the 3-future system. 

1. Pessimistic Scenario
2. Optimistic Scenario
3. Neutral Scenario

• Visionary Forecast: It is non-scientific and is characterized by imagination and subjective guesswork. In this technique, experts' opinions, subjective insights, and judgment are used in forecasting.
• Survey and Judgement Forecasting: This is based on the opinion and judgment of the various industry experts. This forecasting technique is used to study the unavailability of historical data or wholly new and unique market conditions.

An Ingenious e-Brain market forecast is based on a market model specific to the dynamics of a particular market segment. It recognizes the key influencing factors about which presumptions are made. These conjectures are informed by numerous fact bases, such as primary and secondary research, inquiry analysis, and extensive industry contacts. We aim to assist you in understanding a market's future spending patterns and provide quantified insight to support your business decision-making.