Demand Forecasting
Calibrating Survey-Derived Demand
Estimates
Survey-derived demand estimates can be very effective
tools for product development, marketing, and sales. However,
demand estimates that are not adjusted for sources of error
can be misleading and very costly. Consider the following
example:
- There are five million diagnosed heart failure patients
in the U.S.
- A survey of physicians who treat heart failure produces
an unadjusted estimate that 40% of all heart patients would
receive drug X if it were available.
- Anticipating more than two million patients, pharmaceutical
firm A invests heavily in advertising, promotion, and sales
reps.
- Three years after introduction, only 200,000 patients
receive drug X.
Pharmaceutical firm A learned an expensive lesson about adjusting
survey-derived demand estimates for various sources of potential
error. Some of the more common sources of error pharmaceutical
A should have adjusted for include:
- The gap between intention to acquire and actual acquisition.
- Inaccurate assumptions about market, competitor, product,
and/or economic conditions.
- Assumptions about awareness and availability.
While some research and consulting firms claim to have a
formula for various forms of error, National Analysts has
found that variations in product, market, and competitive
conditions make canned approaches unreliable. In fact, our
most reliable calibrations for error are customized using
a combination of forecasting experience and modeling expertise
supplemented by a healthy dose of product, industry, and market
knowledge.
For more information on National Analysts, feel free to e-mail
us today or call (215) 496-6800.
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