Forecasting the Demand for New Convenience Products

Abstract

The author's stochastic evolutionary adoption model (STEAM) is briefly described. Methods for estimating its parameters from panel data covering the first part of the introductory period are outlined. A method by which the future purchase history of each panel household can be simulated and the results projected into a total market forecast is reported. Results obtained by applying the model and simulation procedure to live data for a new product are shown and compared with the product's actual sales during the years after its introduction.