Introduce New Products

New product forecasting is the science of predicting the degree of success a new product will enjoy in the marketplace.

The product life cycle (PLC) is the cycle through which every product goes:

Product Life Cycle Effects

  1. Development: Product is being built; not yet on the market.
  2. Introduction: Product is brought into the market. In this stage, there is heavy marketing activity and product promotion. Typically, sales take off slowly during this stage.
  3. Growth: Sales increase, the market knows the product; other companies are attracted, profits begin to come in and market shares stabilize.
  4. Maturity: Sales slow and finally stabilize. In this stage, products are differentiated, price wars and sales promotion become common, and a few weaker players exit the market.
  5. Decline: The product is no longer relevant or useful. Sales drop, as consumers may have changed.

Time Series Forecast records generally capture one of these stages. Other techniques and record types may be more useful for other stages of the product life cycles better, as shown in the graph above (Log Theta, Holt's, Vanguard Dampened Trend). For example, Adoption records forecast the Growth and Maturity stages.

Following are various options in CCH Tagetik Supply Chain Planning for introducing new products:

Introducing New Product Trends

Option Description
Comparable Use when a new product is similar to another established product. The comparable product’s historical patterns and trends are overlaid on the new product’s forecast. This does not capture new product launch effects. See Supplement Historical Data with Comparable Data.
Spread curve Apply the pattern of a demand factor (for example, seasonality) to the forecast of a new product. See Spread Curve Record.
Supersession Use when a new product is likely to cannibalize or replace an existing product or products. This is especially useful for technology products or certain seasonal items that have multiple iterations. See Add a Supersession Adjustment.
CAGR model Forecast the growth rate of an investment or product over a specific period. See CAGR Record.
Adoption model See Adoption Record.