LibGuides: O'Neill Capstone Guide: Sales Forecast

Sales Forecast Process Using Secondary Market Research

This page will walk you through the process of creating a sales forecast using secondary market research with suggested sources.

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.

Calculating Market Potential

Market potential is the projected sales for an industry within a geographic area.

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 you need to understand:

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

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

IBISWorld This link opens in a new window
Industry research, industry risk rating reports, and business environment reports.
MarketResearch.com Academic This link opens in a new window
Market trends and qualitative insights in consumer and business markets. Features market research publishers Kalorama Information (Healthcare / Life Sciences), Mind Commerce (Technology), Freedonia Focus Reports (industry research, and Packaged Facts (Consumer).
MRI SImmons This link opens in a new window
Survey data on U.S. consumers including adults, kids, and teens providing demographics, attitudes, behavior, media use, use of digital and mobile technologies, and buying habits. Includes consumer segmentation analysis. Limit to 10 concurrent users. Tutorial videos are available at their Youtube channel.

Business Expense Surveys - US Census
Search using NAICS codes. Access retail, manufacturing, wholesale, and service annual expense surveys. Data is cumulative for the entire US industry for a given year. Can be useful in determining target market potential and in financial analysis.
Economic Census

Sources to help you determine consumer market potential:

MRI SImmons This link opens in a new window
Survey data on U.S. consumers including adults, kids, and teens providing demographics, attitudes, behavior, media use, use of digital and mobile technologies, and buying habits. Includes consumer segmentation analysis. Limit to 10 concurrent users. Tutorial videos are available at their Youtube channel.
DemographicsNow (Gale) This link opens in a new window
U.S. Demographic data and reports from the national to local level. Useful for market analysis and segmentation. Create interactive maps, and radius based maps and reports. Current year estimates and five-year projections of key demographics. Includes access to Mosaic Segmentation.
Mintel Academic This link opens in a new window
Consumer U.S. market research including market sizes and trends, market segmentation, consumer attitudes and purchasing habits, and assessing the future of the market.
United States Census Bureau This link opens in a new window
Search, browse, retrieve, view, map, print, and download Census data (formerly American FactFinder).

Determining Sales 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:

Reference Solutions (formerly ReferenceUSA) This link opens in a new window
Consumer and business information including market information. Search by company name, type of business, geography, business size, and more.
Known issues with Google Chrome Browser: a latest update to Chrome may interfere with this resource; you may wish to try a different browser.
IBISWorld This link opens in a new window
Industry research, industry risk rating reports, and business environment reports.
MarketResearch.com Academic This link opens in a new window
Market trends and qualitative insights in consumer and business markets. Features market research publishers Kalorama Information (Healthcare / Life Sciences), Mind Commerce (Technology), Freedonia Focus Reports (industry research, and Packaged Facts (Consumer).

Web resources for locating competitors

ThomasNet
Can search by supplier and product.
MacRae's Blue Book
Kompass

Creating your Sales Forecast

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:

ABI/INFORM Collection (ProQuest) This link opens in a new window
Full-text business database of scholarly journals, trade publications, and industry, market, and country profiles. Also contains news (from global to local) of advertising, marketing, economics, human resources, industry, finance, taxation, and management topics.
Business Source Complete (EBSCO) This link opens in a new window
Full-text business database, covering management, economics, finance, accounting, and international business. (Access provided by INSPIRE: Indiana's Virtual Library.)

B2B Market Research

IBISWorld This link opens in a new window
Industry research, industry risk rating reports, and business environment reports.
MarketResearch.com Academic This link opens in a new window
Market trends and qualitative insights in consumer and business markets. Features market research publishers Kalorama Information (Healthcare / Life Sciences), Mind Commerce (Technology), Freedonia Focus Reports (industry research, and Packaged Facts (Consumer).