Approach To New Product Forecasting After The Launch

APProAch to New ProDUct ForecAStiNG AFter the lAUNch By Bill Sichel N N ew Product introductions are an important ingredient in a successful CPG company. In the fashion industry, it is the lifeline for maintaining viable growth and profit. There has been a good amount of research associated with new product forecasting, but most of the research relates to developing a forecast in the “stage gate process,” that is, prior to the launch in stores. The research associated with forecasting a new product after its launch is limited. If a new product has to be considered for discontinuation and relegated to the off-price category, we need an early detection system for a quick action. This article discusses a simple approach to new product forecasting after its launch, which we call the Relative Indexation Method. Most companies prefer using more inhouse methods to produce a heuristically derived forecast rather than focus on a more formalized statistical methodology. These in-house methods include extrapolation of the historical market share, planogram analysis, and like-as analysis whereby a new product is expected to perform in a similar way as the like product, etc. relAtiVe ...