How to make the prognosis of the demand

25 November 2008 - 17:41

The prognosis of the demand consists of making an estimation of our future sales (or of PU or monetary) of one or several products (generally all), for a period of certain time (generally a month).

Realizing the prognosis of the demand, will allow us to make our projection or budget of sales (demand in PU multiplied by the price of the product) and, from this one, to be able to make the other projections or budgets.

For example, when foretelling or calculating to how much they will promote our future sales, we can calculate how much it will be our production (how many products we will need to produce), to how much will promote our costs, what amount of personnel we will need to contract, to how much it will promote our yield, etc.

And, that way, to obtain a better control, a greater coordination, to diminish risks, and all the other advantages that a good planning entails.

Methods to foretell the demand

We see next some of the methods more used to find the prognosis of the demand:

Analysis of historical registries

It consists of to analyze our sales past and to do projection of the same, for example, if we have noticed that our sales in the last months have increased in a 10%, then, the logical thing would be that for this month that also comes near they increase in a 10%, but in addition we noticed that this next month is of high season for the type of product that we commercialized, and that in addition we have decided to invest more in publicity, then we could foretell that for this next month our sales will increase in a 20%.

This method requires that the business or has a time of operations, to find the prognosis of the demand for a new business or for the launching of a new product, we continue seeing the other methods.

Method of the potential demand

It consists of finding the first potential demand (maximum possible demand that it would be possible to be given in a market) of all the products similar to ours that exists in the market to which we went, and then, on the basis of this potential demand, to determine the demand of our products, considering limiting aspects such as the size of our investment, our capital of work, our capacity of factory (maximum capacity of production), our capacity of supplying (availability of raw material and manpower), our effort of marketing, etc.; but also, considering other aspects such as the demand of our competition, our experience in the businesses, opinions of people with experience in the same type of business, etc.

For example, if we wanted to foretell the demand for our business of restaurant, first we would find the potential demand that exists for all the restaurants that conform our objective market (for example, a district, an avenue, a commercial center), and then, on the basis of this potential demand and to other aspects like the size of our business, our investment in publicity, the information which we have compiled of the competition, etc., determined or foretold our demand.

For example, once we have found the potential demand, we determined that we will work to catch 20% of this potential demand, that is to say, said 20% it will be our prognosis of demand.

Method of the investigation of markets

It consists of foretelling our sales through an investigation or study of market, we can, for example, make use of surveys, where some of the questions could be:

• “you have interest in acquiring this product”
• “he would be arranged to prove this new product or service”
• “how much he would be arranged to pay by this product”
• “each how long consumes or acquires similar products”
• “how much it spends in average when going to similar businesses”
• “whereupon frequency goes to similar businesses”

Or also we can make use of other techniques of market, for example, we can visit businesses similar to ours and calculate the average of clients who have and the average of consumption of each, or can make small interviews to clients of our main competitors or people whom there are been before in the same type of business that ours, etc.

Like final note, we must say that to find the prognosis of the demand, a method or specific formula does not exist, but we must be creative, being able, for example, to make use of several methods, in the end does not matter which method we found used, the important thing is to obtain the possible approximate major.

Image: michelhrv

Labels: Concepts, Study of market, Marketing

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Related contents:

1. How to find the potential demand
2. How to make a survey
3. How to let grow a business
4. The prognosis of sales
5. How to make a budget familiar