In today’s tech world, few products being
introduced into the market that have a finite (or limited) life cycle with new
features from time to time in order to show case their innovations or for brand
enhancement.
So, how does their sales/demand cycle
look alike and what manufacturers
need to understand about their demand behavior/forecasts. Towards
the same,
first
one need to understand that new product sales/demand forecasting/behavior
becomes an issue due to mainly, a) non-availability of recent data, b) product
is not exactly same as old offer, and c) further, it will have distinct phases
such as i)
introduction with/without promotion phase, ii) growth phase (or growth due to
heavy promotions), and iii) decline phase with/with out season ending sales
(discounts). In addition to above, till few time points (e.g. first few
days/weeks of its launch), it is difficult to understand its recipient nature
in the market. Thus, one can generalize their demand with respect to two
scenarios as depicted in the below figure.
In the above figure, orange line
represents unsuccessful product ending up with more promotions/discount to
clear out produced supply,
where, as green line represents successful product ending up with less
promotions/discounts. Remember, one need to understand that till left of
green/orange dotted line is a phase of low promotions/discounts, after that, it
moves to higher promotions/discounts phase.
Views expressed here are from author’s industry experience. Author trains on and blogs Machine (Deep) Learning applications; for further details, he will be available at mavuluri.pradeep@gmail.com for more details.
Find more about author at http://in.linkedin.com/in/pradeepmavuluri
