Many marketing managers like to use methods that do not rely on data to help make forecasts. These methods are called "qualitative" forecasting techniques, in the sense that they make use of judgements and opinions.
The two main qualitative techniques are summarised below:
A hunch is more than a guess – though it might be described as an "educated guess". A forecast based on a hunch is likely to be influenced by the experience of the forecaster, perhaps influenced by market research or from discussions he/she has had with others in the market.
An experienced marketing manager with many years of experience in an industry will have strong insights into the sales prospects for individual products, business units and so on. The starting point for a hunch forecast is often the previous years' or period data.
2. Delphi Method
The Delphi method involves getting a group of market experts to provide an opinion on the forecasting task – e.g. to estimate future sales growth in a market.
The method involves a series of steps where the experts first give a confidential opinion on the task and then revise their forecasts based on the submissions of each expert to the group.
Ultimately the aim of the Delphi method is to reach a "consensus" forecast.
Qualitative forecasting techniques are widely used and are particularly useful when:
- There is little accurate or predictable historical data available (e.g. in the case of a new product launched into a new market)
- Where a market is subject to wide fluctuations in demand (e.g. unexpected surges or shocks)
- Where a market experiences significant change (e.g. shortened product life cycles, rapid changes in technology)
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