Demand forecasting for new products is a challenging task. Here, there is no reliable data to base demand calculations. Experiences of other firms also are not available Therefore, firms introducing new products will have to rely on new techniques of demand forecasting. The important methods of demand forecasting for new products are the following:
1. Test marketing : This is a proven method of demand forecasting for new products Test marketing involves marketing the new products as a test case in some chosen markets. For test marketing, the product is either produced in small quantities , or imported. If test marketing is successful, then method forecasting is done on the basic of the data obtained in test marketing.There have been many instances where certain products with were successful in some countries did not succeed in other countries. That is why test marketing is done to forecast demand.
2. Opinion poll : If the new products is a capital good with a few potential customers, instead of test marketing, the potential buyers can be directly approached and asked whether they would be interested in buying the products, Since the opinion of the potential buyers is polled in this approach, it is called opinion poll approach.
3. Evolutionary approach : In the evolutonary approach, as the name implies, the new product is seen as evolution from an existing product. In computers, the lap top is an evolution from desk top and the tablet is an evolution is an evolution from lap top
4. Substitute approach : Substitute approach of demand forecasting is used when the new products is a substitute for an existing products. For example : liquid soap is a substitute for toilet soap cake , liquid mosquito vapouriser is a substitute for mosquito coil
5. Vicarious approach : Vicarious approach relies on gut feeling. This approach relies on the product knowledge and experience of the dealers of products. Since dealers come into contact with thousands of customers. they know from experience dealer with be in a position to say whether a new product
