Answer to Question #65665 in Economics of Enterprise for Ram Sharan
What do you understand by demand forecasting? Survey method is one of the techniques of demand forecasting. Discuss its different types.
Demand forecasting is scientific estimation of customer demand to predict product sales. One of the demand forecasting techniques is survey method which undertakes such types as consumer intention, expert opinion and market experiment.
Consumer intension. Sales of products are projected through approaching its end-users. Using this method, relevant group of consumers may be questioned about their tastes and buying plans. This method is quite expensive and time consuming.
Expert opinion. Demand predictions are based on the opinions of sales representatives who are close to consumers, know their perceptions and plans, understand how they react on changing market conditions. It is simple and less expensive method, but may take into account subjective judgments and require essential experience. Expert opinion technique includes Delphi method under which group of experts are repeatedly asked until a consensus is obtained.
Market experiment is used to make specific observation. It is conducted to understand consumer behavior in actual or artificial market condition. By using this method forecaster may observe responses of the consumers to different factors and capture them for demand forecast. It is quite expensive methods and consumes a lot of time, but provide representative information about product demand.