Forecasting new product market potential: Combining multiple methods

Abstract

Multiple measurement approaches are often recommended to forecast market potential for new products; however, methodologies to accomplish this have not been fully developed. In this article, Robert Thomas describes an implementation of a multiple methods approach for combining independent forecasts of new product market potential to improve new product planning decisions. The approach involves (1) defining a concept of market potential for the new product, (2) obtaining independent operationalizations and measures of the concept with multiple methods, and (3) using the concept as a basis for reconciling and combining forecasts obtained from the different methods. In the last step, a systematic procedure linked to the conceptual definition of market potential leads to the estimation of judgmental weights for combining the independent forecasts. A case study for a new type of electronic mail service illustrates the approach.