I-CORE Research Guide

This page will walk you through the process of creating a sales forecast using secondary market research with suggested sources. Before you begin you should complete the sales forecast modules on the I-CORE Canvas site. 

Content covered in Canvas module:

• Different forecasting methods
• Process for determining a sales forecast using secondary market research
• Research strategies for determining market potential, sales potential, and your sales forecast.

This page of the guide supports the canvas learning module and will help you do the necessary research and analysis needed for the sales forecast component of your deliverable.

Finding Market Potential Using a Top Down Approach - Roofing for Existing Residential Homes

Finding Market Potential for Niche Product or Service using a Bottom Up Approach: Vertical Gardening Containers

Market potential is the projected sales for an industry within a geographic area. You hopefully found this information when conducting your target market analysis.

Most of you will be calculating market potential for selling to businesses. However if you are selling to a retail chain, you may want to also understand the consumer market potential for the product as well as their behavior (such as where they shop) as you analyze your B2B market potential.

To calculate market potential there are two things that analysts need to understand

1. The number of potential customers within that industry and geography
2. How much are those customers willing to spend

You may find market research reports where market potential is provided especially at especially at the national level. In those reports you may be able to drill down deeper to figure out the potential for a specific segment. For instance. if you are looking at the Roofing Contractor report in IBISWorld, if you go to the products/markets page you can figure out the potential for the residential market.

Help but I need to find local market information? Follow the guidance on the Target Market Analysis page of this guide.

Sources that can help you determine B2B (business-to-business) market potential:

Sources to help you determine consumer market potential:

Sales potential is the company's share of the industry's market potential (aka market share).

Two ways to determine the market share:

• If you know the company's current market share and it is appropriate for the new product, this may be used.
• You can determine the number of competitors. For instance if there are 9 competitors and you'd be the 10th, then your market share would be estimated at 10% (average market share).
  • However, when analyzing consider if there are any very dominant players within the market. If that is the case you may want to give a competitor more weight in your market share calculation (e.g. you have two players that have a significant portion of the market where there are 9 current competitors. Perhaps you give the two strong players a value of 2 as opposed to all the other players have a value of 1, when you fact this in the calculated market share for your client is 8.33%.)

Database resources to located competitors:

Web resources for locating competitors

When developing a sales forecast you need to consider adoption rates. Sales potential will not be reached in the first year.

• May get adoption rates from client contact.
• May come across adoption rates in secondary market research.
• If unable to find adoption rates, use the default that is provided in your I-CORE deliverable guidelines.

Secondary market research resources you can search to find adoption rates of new products:

Trade journal and market research articles found in:

B2B Market Research

Once you create a draft of your forecast, you should get an expert opinion!

Calculations for sales forecast should be part of an appendix to your deliverable. Be sure to include any assumptions you make in calculating market potential, sales potential, and your forecast. Be sure to cite any sources you use in your calculations. Citations should be endnotes using the Chicago Manual of Style. For more information on citations go to the Citations and Business Writing page of this guide.

Refer to the product deliverable requirements on the I-CORE canvas site. You will use your target market and persona research to help inform the decisions your make on your product analysis. It is okay to use Google, Amazon, and other web resources to understand competitive offerings as you figure out how to appeal to your customer.