SURVEY METHODS OF DEMAND FORECASTING

1. SURVEY METHODS OF
DEMAND FORECASTING
VIVEKANAND VAISH
M.E.E. (SEMESTER-I)
EXAMINATION ROLL NO.- 19421EEC020
DEPARTMENT OF ECONOMICS (FSS)
BANARAS HINDU UNIVERSITY

2. SURVEY METHODS
OF DEMAND
FORECASTING
COLLECTIVE
OPINION METHOD
DELPHI METHOD
CONSUMERS’
INTERVIEW
METHOD
COMPLETE
ENUMERATION
METHOD
SAMPLE SURVEY
METHOD
CONSUMERS’ END-
USE METHOD
TEST MARKETING

3. Survey Method
• The following are the important survey
methods used for forecasting demand:
Collective opinion method
Delphi method
Consumers interview method
Test marketing

4. Collective Opinion Method
• This method is also known as “Sales Force
Opinion” or “Sales Force Polling” or “Reaction
Survey” method.
• Under this method the responsibility for
estimating the expected sales is placed on
salesmen.
• Salesmen being closest to the consumers have the
knowledge of the requirements of the consumers,
their reactions to the product.
• These estimates of individual salesmen are
consolidated to find out the total estimated sales.

5. Advantages of Collective Opinion
Method
The method is simple and easy to be used.
It involves minimum of statistical work and
hence, does not require any technical expertise.
It does not cost much.
It is realistic because it is based on personal
and first hand knowledge of salesmen.
It is useful in forecasting the sales of
new products.

6. Disadvantages of Collective Opinion
Method
Being Subjective, the forecast is likely to
be influenced by the personal bias of the
salesmen.
Salesmen may understate the forecast if their
sales quotas are to be based on it.
Its usefulness is limited to the short
period only.
The salesmen may not be aware of wider
economic changes which affect demand.

7. Delphi Method
• This technique was developed by Olaf Helmer,
Dalkey and Gordon in the late 1940s.
• Under this method a panel of internal and
external experts are selected and they kept
physically away from each other.
• There is a coordinator who acts as an
intermediary among the panellists.
Coordinato
r
Internal
Experts
External
Experts

8. • Coordinator prepares a questionnaire and
sends it to the panellists. They express their
views anonymously.
• Each expert will be given an opportunity to
react the reasons advanced by others.
• The process will be repeated until some sort
of unanimity is among all experts or issue
causing the disagreement are clearly defined.
• It is more popular in forecasting non-economic
rather than economic variables.

9. Advantages of Delphi Method
1. It does not take much time.
2. The cost is low.
3. The method is useful for new products

10. Disadvantages of Delphi Method
• The opinions are subjective
• Good and Bad estimates are given equal
weightage

11. Consumers’ interview method
• It is the most direct method of estimating the
demand for the short period.
• It is also known as “Survey of Buyers” or
“opinion Survey” method.
• In this method the consumers are contacted
personally to know about their plans and
preferences regarding the purchase of he
product.

12. • Consumer survey method has three different
types:
Consumer
survey
method
Complete
enumeration
method
Sample
survey
method
Consumers’
end-use
method

13. Complete enumeration method
• Under this method all the consumers of the
product are interviewed and on the basis of the
information collected, the demand forecast is
made.

14. Sample survey method
• When the number of consumers is large, this
method is used.
• In this method few selected consumers are
interviewed.
• The selection of the consumer is done through
random, stratified sampling technique.
• This method is based on the assumption that
the selected sample represent the population.

15. End – use method
• The consumers end use method is used to
obtain use wise or sector – wise demand
forecasts.
• In this method it is possible to forecast demand
separately for different sectors.

16. Advantages of Consumer survey
method
This method is free from any personal bias of
the forecaster.
The forecast is based on the first hand
information from the consumers.
The sample survey is less costly and less time
consuming than complete enumeration, but
equally reliable if the sample is representative
in character.

17. Disadvantages of Consumer survey
method
The Complete enumeration method is very costly
It is time consuming
 the manpower required for the survey is also large
The method cannot be used if the number of
consumers is very large and scattered
The method is not reliable because,
 In the case of household consumers, there is no
regularity of intentions
 Faced with multiple choices or alternatives, they cannot
predict their own choices.

18. Test marketing
• Test marketing is used to forecast the demand or
sales for the new product
• In this method a test is selected. It may be a
region, city or state which is the representative of
the total market
• After the selection of test area product will be
launched in the area
• If the product is successful in the test area, the
forecast will be that similar levels of success will
be achieved in the total market.

19. Advantages of Test marketing
• It is a real life experiment
• It is possible to know the reactions of
consumers

20. Disadvantages of test marketing
• It is costly
• It is time consuming
• There is the danger of making of false forecasts
from the initial response of the consumers
• It is difficult to select the test area which is
representative of the whole market
• It is possible for rivals to immediately imitate the
product and take advantage of test marketing
without incurring the cost of this exercise.

21. Criteria for a good forecasting
method
Accuracy
Plausibility
Economy
Availability
Durability
Flexibility

22. QUERIES ??
(IF GENUINE PLEASE THEN ONLY)