The PDMA Handbook of Innovation and New Product Development, 4th Edition

CHAPTER THIRTY-ONE FORECASTING NEW PRODUCTS

Kenneth B. Kahn

31.1 Introduction

Forecasting is an elemental part of the new product development process because most, if not all, go/no-go decisions during the process require some kind of forecast on which to base these decisions. However, many companies tend to overlook the requirements leading to better new product forecasting and instead simply accept as fact that any new product forecast will be characteristically inaccurate due to uncertainties related to market acceptance, technical feasibility, and company capability to bring the new product to fruition. Successful new product forecasting is possible if the respective company has the proper understanding. Indeed, those companies successful at new product forecasting manifest such success by establishing forecasting parameters; applying appropriate techniques; using a cross-functional, systematic process; and focusing more on generating meaningful new product forecasts versus a preoccupation with accuracy. New product forecasting cannot be avoided nor ignored.

In the present chapter, the topic of new product forecasting is outlined along with how a company may achieve a better, more meaningful new product forecast. The chapter begins by establishing and defining the parameters of the new product forecasting effort. Next, the linkage between new product forecasting and the product ...