Introduction
Global Container (GC) is a known name in the field of
plastic container manufacturer. It has containers manufactured for a variety of
liquids, from beverages to industrial fluids. It has been operating worldwide
through the well-organized distribution channel. Maiko Sakane, Director of New
Product Development for GC during her vacation in the Bahamas got a new idea
while spending time in the beach about the Snork-All to carry the equipment
needed for Snorkel (diving undersea). The Snork-All is a lightweight product
designed to carry necessary stuff related to Snorkel which can be snap to belt
or bathing suit of the diver.
This idea of carrying container is well appreciated by most
of the team member although the CEO and senior management team were not much
convinced. The uncertainty of the senior members was due to different product
line the company was serving. The major obstacle was to prepare marketing, and
sales forecasting for the product Snork-All since Maiko was not an expert in
marketing and forecasting. So the challenge is to gather knowledge about the
market potential and sales probability.
Discussion
1. How would you estimate the total market potential for
Snork-All? What kind of historical data might help with this project?
Global Container (GC) has been a well-known name as the
plastic container manufacturers for a variety of liquids like beverages, and
industrial fluids. It is attempting to another product category that it has
never attempted before. Sales forecasting is needed to estimate the potential
market for Snork-All.
To estimate the market potential for Snork-All, primary
research should include both qualitative and quantitative analysis should be
done. Consumer demand, intention to buy and market potential should be
predetermined with the help of surveys, questionnaires, or with the help of
experts (Delphi Method). Test marketing can be done before launching the
product, this will help to give the exact need, reactions, and consumption in
the market
For the historical data, there should be a detailed survey
about the products that already existed in the market or not, it existed then
why the consumers were not ready to use it. The frequency of use of similar
products by the users should be determined. Time series data will be best for
the approach since it uses historical data to predict the sales. To be precise,
the periodic movement approach should be used to check the pattern of the use
since people go to do snorkel only during summer.
2. How would you estimate GC's sales potential for
Snork-All? Who from GC should be involved in developing the sales estimate?
Sales potential is the estimated market share that a company
can capture after entering the market. It is the basic factor for a firm to
determine whether the entry in the market is profitable or not. To estimate
sales potential for Snork-All, potential numbers of buyers should be
identified, the average volume per sale should be estimated. Market penetration
through potential prospects by observing and calculating the average number of
customers coming for a snorkel. Using a sales person who is from a specific
territory and have knowledge about snorkel should be used to penetrate the
market. Competitive analysis should be conducted with the competitors in the
industry and future analysis for the new entrants in the market.
The sales person with knowledge who is expert in making
marketing planning and forecasting should be used. Also, the person who has
experience in selling equipment needed for Snorkel can be a suitable person
since he will be aware of sells in a season, target customers can give the
figure how many people come for Snorkel and what amount of Snorkel-All will be
needed initially to start with. The top level Sales manager who has a thorough
knowledge of the subject matter, in-depth touch with technology like CRM, and
who can mine data accurately and implement it properly. He / She should not
either overestimate or underestimate the forecasting.
3. What type of forecasting methods might work best in
developing a sales forecast for Snork-All?
According to Hair, Anderson, Mahta, and Babin (2008), "So,
in selecting the right forecasting method, sales managers should consider
several criteria that include, but are not limited to comprehensibility,
accuracy, timeliness, quality and quantity of information, qualified personnel,
flexibility, and costs or benefits.". The above-mentioned points should be
based while selecting the right forecasting methods. There are two methods to
be considered while choosing the right forecasting top-down approach and the build-up
approach.
Since the product is new and to be sold in the new market, the
build-up approach should be used to do sales forecasting. Build-up approach
uses primary research data taken from the survey with the information regarding
expectation to sell in the future, or buyer purchase intentions. This approach
will help to give accurate information with the comparison, emphasizing
internal capabilities, more structured and realistic prospects.
4. What would you recommend that Maiko do now? What other
information could be used to help develop a better sales forecast for
Snork-All?
Maiko is a Director of New Product Development at GC so she
should concentrate on improvising her idea of Snork-All. She is not an expert
in marketing and sales forecasting but she is brilliant with her idea so from
there on she should hand over her idea to Sales Manager who can take the idea
to the market.
The other information that could be helpful to develop
better sales forecast for Snork-All can be following
·
Keep the quantitative data realistic, know your
resources strength, and capabilities.
·
Keep targeted market and customers in smaller
sale cycles so that the overproduction can be minimized.
·
Always anticipate with historical data and
trends.
·
Monitoring the competitor's existing and
newcomers closely.
·
Frequently monitor and modify sales forecast
with market trends and changes
Conclusion
The right forecasting method is needed to be selected by
considering criteria which might include comprehensibility, accuracy,
timeliness, quality, and quantity of information, qualified personnel,
flexibility, and costs or benefits. The qualitative and quantitative data
should be predetermined using different survey methods. There is a need for
observing and learning the buyer intentions, market history, seasonality,
frequency of the divers, potential market areas. The build-up approach seems to
be more viable for GC to introduce the new product since this method uses
primary research data from the surveys. This method can provide more accurate
data regarding buyer intentions and will provide structured and realistic
information.
References
Unknown. Sales Potential. Retrieved April 23, 2019, from
McGovern, Michele. 4 key metrics to determine your sales
potential. Retrieved April 23, 2019, from
https://www.resourcefulselling.com/sales-potential/
https://www.resourcefulselling.com/sales-potential/
Unknown. What is Sales Forecasting. Retrieved April 24,
2019, from
Cohen, Heidi. (2016, July 14). How to develop your sales
forecast. Retrieved April 24, 2019, from
White, Tim. 7 Ways to Improve Sales Forecasting. Retrieved
April 24, 2019, from
