Pre-Concept New Product Forecasting By Steven Shugan† Revised, February 1999 † Russell Berrie Foundation Professor Marketing Department, The University of Florida College of Business Administration, 212 Bryan Hall Gainesville, FL 32611-7150, Telephone: 392-1426 x1236 Campus Fax: 352-846-0457,
[email protected] The author would like to thank participants of the workshops at University of Southern California, University of Los Angeles, McGill University and University of Florida for their many helpful suggestions. The author thanks Russell Berrie for financial assistance. 1 Pre-Concept New Product Forecasting Abstract This paper's goal is to provide an approach for very early predictions for new products, which includes conformance uncertainty. It makes predictions before formulating the new product concept. Although we would not expect to resolve all or most of the uncertainty at this early stage, we hope to provide significant reduction in development uncertainty. The advocated approach explains 27.8% of the outcome variance in one empirical study. By adding a measure of expected marketing effort, the approach explains 40.2% of the outcome variance. (KEYWORDS: New product models, forecasting, new product teams, motion pictures and new product design) 2 Introduction Existing new product forecasting models are extraordinarily useful for forecasting the success of new products that are close to their finished form (e.g., Silk and Urban 1978, Urban et. al., 1997), or early after market introduction (Blattberg and Golanty 1978, Xie et. al 1997). These forecasts provide important information for launching decisions (Urban and Hauser 1995) and the likely level of sales after launch. Some models help predict the flow of information after launch (Urban, Hauser, and Roberts 1990).