An exploratory investigation of new product forecasting practices

Abstract

To guide new product forecasting efforts, the following study offers preliminary data on new product forecasting practices during the commercialization stage (prelaunch and launch stage). Data on department responsibility for and involvement in the new product forecasting process, technique usage, forecast accuracy, and forecast time horizon across different types of new products are reported. Comparisons of new product forecasting practices for consumer firms versus industrial firms are also reported. Overall, study results show that the marketing department is predominantly responsible for the new product forecasting effort, there is a preference to employ judgmental forecasting techniques, forecast accuracy is 58% on average across the different types of new products, and two to four forecasting techniques are typically employed during the new product forecasting effort. Compared to consumer firms, industrial firms appear to have longer forecast time horizons and rely more on the sales force for new product forecasting. Additional analyses show that there does not appear to be a general relationship between a particular department’s involvement and higher forecast accuracy or greater satisfaction, nor does it appear that use of a particular technique relates to higher forecast accuracy and greater satisfaction. Countering previous research findings, the number of forecasting techniques employed also does not appear to correlate to higher forecasting accuracy or greater satisfaction. Managerial and research implications are discussed.