Benchmarking New Product Forecasting

New are now the most important component in the success of any business. The world has become highly competitive, fueled by the growing trend toward globalization, advancements in technology, shorter life cycles, and rapidly changing consumer demand. The best way to drive consumers away from competitors is by introducing more and more and better As such, a large number of are coming into the market every year. When someone asked Michael Dell, CEO of Dell Computer, about his recipe for success, his immediate response was: Taking risk and staying one step ahead of competitors. A good way to stay ahead of competition is to introduce and better So, product introduction is not an option any more, it is a necessity. For many companies it is the way to survival. DEFINING NEW PRODUCTS There is no standard definition of products. Generally, a product or service is defined as new when it results from product improvement, line extension, market extension, and/or when it is to the company and to the world. New coming from improvement may result from changes that may be either technological or psychological. New fashions and car models continue to be the main source of energizing declining sales in their industries. Many go through different phases of their life cycle. As they mature, their sales start falling unless something is done to reverse it. New are often launched to give a lease on life to declining In the case of a line extension, the number of product lines remains the same while the number of product variations within a line increases. For example, a company adds a flavor, color, or size to an existing line of Pepsi-Cola has now expanded its existing line of cola by adding Diet Pepsi, Pepsi One, Diet Pepsi Twist, and so on. Market extension is when the product market is expanded either within the current market by a advertising campaign, a package design, a distribution channel, or by going to altogether markets. For example, Quaker State now offers its motor oil in a translucent plastic container with a pour spout. Arm & Hammer promotes its baking soda as a refrigerator deodorant and a drain cleaner. Proctor & Gamble has changed its advertising campaign for Pampers from offering convenience to mothers to ensuring babies' dryness and happiness. Among all products, a very small percentage of them are really new-new to the company and/or to the world. Most products fall in the first three categories described above. By contrast, prime examples of that were to the company and to the world when first introduced were the electric typewriter, the photocopy machine, and the personal computer. WHY NEW PRODUCT FORECASTING New are by far the most difficult to forecast, because we don't have any history or experience to base on. This doesn't mean that we shouldn't forecast them. Forecasting is a must. You have to determine, before introduction, whether or not a given product would be viable. After you decide to launch a product, you have to decide how much to produce, when, and where. Each decision requires some kind of a forecast about the future, so we have no choice about whether or not to prepare a forecast. …