SlideShare a Scribd company logo
© Copyright 2016 Milner Strategic Marketing Ltd
Forecasting the Future for Profit
Jonathan Davenport
Milner Strategic Marketing
10th May 2016
2© Copyright 2016 Milner Strategic Marketing Ltd
• Milner Strategic Marketing Ltd is a business
consultancy that specialises in working with
technology companies
• Clients want help with market analysis, strategy
and marketing programmes
• Extensive experience of forecasting markets with
high levels of accuracy
• Acknowledged experts: materials widely published
• I have built over 50 market models over the last 8
years with forecast models containing ~15m cells
Milner Strategic Marketing Ltd
QUESTION:
Forecasting the Future for Profit
Which of your
companies has its
own market model?
WHY A
MARKET
FORECAST
MODEL?
Forecasting the Future for Profit
5© Copyright 2016 Milner Strategic Marketing Ltd
What should Blockbuster’s market forecast have
looked like?
DISCUSSION
POINT:
Forecasting the Future for Profit
Can you think of
other companies that
failed because they
did not understand
how their target
market would
evolve?
7© Copyright 2016 Milner Strategic Marketing Ltd
Consumer adoption of technological innovations
can be predicted
Consumer product S-curves Source: North (2012)
8© Copyright 2016 Milner Strategic Marketing Ltd
A market forecast model provides a detailed understanding
of future consumer and competitive behavior
WHERE TO
GATHER
MARKET
SIZE DATA?
Forecasting the Future for Profit
10© Copyright 2016 Milner Strategic Marketing Ltd
Secondary research collects data on the size of
customer base and competitor position
Customer-focused data Competitor-focused data
Company Website
Company Internal Data
Social Media
Trade Press
Industry Analysts Popular Press
Statistics Authorities
11© Copyright 2016 Milner Strategic Marketing Ltd
Primary research provides insights into customer
behavior and competitor trends
Channel Partners
FOI
Customers
Internal
Experts
Industry
Experts
Internal
Experts
Customers
Customer-focused data Competitor-focused data
Structured Interviews
Surveys and Analysis Suppliers
DISCUSSION
POINT:
Forecasting the Future for Profit
What challenges do
you face in your
company – too much
or too little market
data?
HOW TO
CONSTRUCT
THE MODEL?
Forecasting the Future for Profit
14© Copyright 2016 Milner Strategic Marketing Ltd
Understand your market, which needs to be
precisely defined in the model
Total Available Market, Served Available Market, Target Market
15© Copyright 2016 Milner Strategic Marketing Ltd
Markets are complex. Identify the structural elements
that are relevant and bespoke to your market
Geography
Geography by Sector
by Product Type
2010 2019
MarketSize(Geography,
Sector,ProductType)
Product Type C
Product Type B
Product Type A
2010 2019
Product A
MarketSize(Geography,Sector,
ProductType,Product)
Geography by Sector by
Product Type by Product
2019
Country G
Country E
Country A
MarketSize(Geography)
Country C
Country D
Country B
Country F
Geography by Sector
2010 2019
MarketSize(Geography,
Sector)
Sector E
Sector C
Sector B
Sector D
Sector A
Other Product D
Rest of World
N=6 N=3
Product B
Product C
2010
N=4N=8
16© Copyright 2016 Milner Strategic Marketing Ltd
The model provides a detailed breakdown of sales
volumes by geography, sector, product type and product
DISCUSSION
POINT:
Forecasting the Future for Profit
Would you describe
your market as
emerging or mature?
WHAT ARE
THE KEY
FORECAST
TECHNIQUES
?
Forecasting the Future for Profit
19© Copyright 2016 Milner Strategic Marketing Ltd
Scenario planning helps you anticipate the
dynamics of different potential futures
The Day After Tomorrow
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut dignissim eleifend felis. Maecenas
tincidunt tincidunt nulla at tristique. Nam posuere lobortis mattis. Pellentesque eu quam odio.
Cras dictum enim et condimentum pretium. In commodo id augue nec sagittis. Maecenas
pellentesque metus sit amet ex sagittis sagittis. Ut eros purus, mollis quis sem at, tincidunt
tincidunt nisl.
Nunc id tortor vitae metus iaculis feugiat sed in eros. Suspendisse non sagittis mi, eu tincidunt
diam. Aliquam a massa quis magna tempor fermentum. Ut venenatis turpis id dolor laoreet, et
placerat orci cursus. Sed mi magna, ultricies et rhoncus et, finibus in velit. Quisque sem enim,
egestas consectetur dignissim sed, luctus vel tortor. In hac habitasse platea dictumst. Curabitur
tempus lobortis dapibus. Pellentesque habitant morbi tristique senectus et netus et malesuada
fames ac turpis egestas. Nunc in tortor vestibulum, tincidunt lorem a, feugiat nisi. Maecenas
molestie mattis leo, ut rhoncus orci pellentesque ut. Vestibulum porttitor, dolor eget hendrerit
ultrices, nisl magna porttitor sem, id pretium urna neque vel nisl. Morbi id diam venenatis nulla
vestibulum finibus eu sed diam. Integer hendrerit bibendum libero, sit amet accumsan quam.
Vestibulum egestas molestie velit nec varius. Integer rutrum, arcu vitae posuere finibus, arcu
lacus commodo elit, in posuere eros neque in augue.
Describe each scenario
Analyse potential scenarios
Identify critical variables
Variables
Historic sales
Consumer
Adoption Theory
Market
penetration
Seasonality
Country
demographics
Economic factors
Forecast the impact of scenarios
1
2
3
4
20© Copyright 2016 Milner Strategic Marketing Ltd
Forecasting Emerging Markets: Diffusion of Innovation and
Market Churn provides a robust approach for new tech
New
Adopters
Total
Demand
Market
Churn
Innovators
(2.5%)
Early
Majority
(34%)
Late
Majority
(34%)
Early
Adopters
(13.5%)
Laggards
(16%)
Market Churn:
Technology has a predictable life cycle. Milner analyses the
churn (replacement) rate, which is affected by product durability
and technology upgrade, to forecast the long-term sales
demand for replacement products.
Total Demand:
The total demand forecast takes into account both sales of new
and replacement products over time.
New Adopters – Diffusion of Innovation:
According to Diffusion of Innovation, the adoption curve can be
broken into five sections of adopters with different
characteristics and behaviours, affecting the market dynamics.
The curve predicts the proportion of the target population that
will adopt the new technology over time.
Diffusion of Innovation and Market Churn Methodology
21© Copyright 2016 Milner Strategic Marketing Ltd
Forecasting Mature Markets: Anchor Metrics can be
used to calculate sector demand
Anchor
Metric
Sector
Demand
Output
Multiplier
Anchor Metric:
A unit which allows us to scale the size of the sector
and understand the market trends e.g. car
production.
Production Output Multiplier:
The amount of product used in a single anchor
metric point e.g. number of widgets per car.
Total Sector Demand for one time period:
The sector’s anchor metric is multiplied by the
appropriate production output multiplier.
Total Sector Demand over time:
The sector demand is anchored to changes in sector
size, by the sector anchor metric. This allows
changes in demand over time to be calculated.
The Anchor Metrics Methodology
DISCUSSION
POINT:
Forecasting the Future for Profit
What are the key
drivers that influence
customer purchasing
behaviour in your
markets?
HOW TO GET
BUY-IN?
Forecasting the Future for Profit
24© Copyright 2016 Milner Strategic Marketing Ltd
Analysis of the results yields valuable and
sometimes unexpected insights into the market
MarketSizeSectorSize
ProductType
Size
ProductSize
Market Units Market Value
25© Copyright 2016 Milner Strategic Marketing Ltd
Building credibility of the model and developing
data-driven recommendations ensures buy-in
Model
results
and
analysis
Conclusions and
recommendationsDiscussion
-20.0%
-10.0%
0.0%
10.0%
20.0%
0
2,000
4,000
6,000
8,000
Country
A
Country
B
Country
C
Country
D
Country
E
Country
F
Country
G
Other
SalesVolume(unit)
Forecasting Accuracy
Forecast 2013 Actual 2013 Forecast 2014 Actual 2014 Forecast 2015
Actual 2015 Accuracy 2013 Accuracy 2014 Accuracy 2015
0%
5%
10%
15%
20%
25%
30%
35%
Country ACountry BCountry CCountry DCountry ECountry FCountry G Other
MarketShareofUnitSales
Triangulation of Model against Analyst
Market Share Estimates (2015)
Analyst Report
Estimate 2015
Milner Model Estimate
2015
Internal Estimate 2015
Data-driven conclusions and recommendationsTriangulation ensures forecasting accuracy
DISCUSSION
POINT:
Forecasting the Future for Profit
How would this sort
of information help
you in your day job?
WHERE ARE
THE
OUTPUTS
USED?
Forecasting the Future for Profit
28© Copyright 2016 Milner Strategic Marketing Ltd
The forecast output is valuable to all departments. Using
one data source means the whole company is aligned
3 key applications of model output
• Supporting an internal
investment decision1
• Developing the
product roadmap2
• Identifying revenue
growth opportunities3
29© Copyright 2016 Milner Strategic Marketing Ltd
2008
Evaluating a Business Unit
- To underpin an internal decision
about whether to invest in or divest
one of its Internet Sector business
units
Practical examples of using a market forecast
model
2014
Forecasting the Smart Phone and
Tablet Markets
- To understand the buying behavior
across different price points,
vendors and operating systems
2015
Gauging Revenue Growth
Opportunities
- To identify the global market
demand for ceramic fibre used in
high temperature and fire protection
• Growth in demand from
emerging markets, e.g. China
and India
• Change in vendor dynamics –
16 key vendors
• Change in consumer buying
behavior – 11 price points, 11
operating systems
• The rise of Android operating
system was identified
• 27 individual countries across 4
regions were analysed to
identify geo hotspots
• Revenue opportunities in 11
sectors by material type (3) by
product form (8) were examined
• Detailed pricing analysis
revealed market trends and
Morgan’s price premium
• Key market forces were outlined
• The impact of the recession on
sales was quantified
• The market size of the unit was
estimated both in volume and
value terms
• Four commercial options were
provided
DISCUSSION
POINT:
Forecasting the Future for Profit
Where does the
strategic decision
making function sit
within your
company?
Forecasting the future for profit - SCIP presentation

More Related Content

What's hot

Consumer Segmentation - Introduction to Branding
Consumer Segmentation - Introduction to BrandingConsumer Segmentation - Introduction to Branding
Consumer Segmentation - Introduction to Branding
Rai University Ahmedabad
 
Market Segmentation
 Market Segmentation Market Segmentation
Market Segmentation
DR. SHAJAHAN mba phd
 
Market Segmentation, Targeting and Positioning - Benefits of Segmentation
Market Segmentation, Targeting and Positioning - Benefits of SegmentationMarket Segmentation, Targeting and Positioning - Benefits of Segmentation
Market Segmentation, Targeting and Positioning - Benefits of Segmentation
Mihran Kalaydjian
 
Marketing Management
Marketing ManagementMarketing Management
Marketing Management
Dr. Pratiksha Patil
 
Rediscovering Ma
Rediscovering MaRediscovering Ma
Rediscovering MaAlex_Ko
 
Marketing management complete PPT
Marketing management complete PPTMarketing management complete PPT
Marketing management complete PPTYatin Sharma
 
STP and consumer behaviour
STP and consumer behaviourSTP and consumer behaviour
STP and consumer behaviour
Rachel Mathew
 
Market Segmentation Analysis Example PowerPoint Presentation Slides
Market Segmentation Analysis Example PowerPoint Presentation SlidesMarket Segmentation Analysis Example PowerPoint Presentation Slides
Market Segmentation Analysis Example PowerPoint Presentation Slides
SlideTeam
 
Unit 2 marketing management
Unit 2 marketing managementUnit 2 marketing management
Unit 2 marketing management
Dnyan Bharti society/BMS,Dahanu
 
Marketing process, Mktg mix, NPD,PLC, STP, Distribution
Marketing process, Mktg mix, NPD,PLC, STP, DistributionMarketing process, Mktg mix, NPD,PLC, STP, Distribution
Marketing process, Mktg mix, NPD,PLC, STP, Distribution
shrinivas kulkarni
 
Unit 2 market segmentation - Class 11 - CBSE - 2016/17
Unit 2   market segmentation - Class 11 - CBSE - 2016/17Unit 2   market segmentation - Class 11 - CBSE - 2016/17
Unit 2 market segmentation - Class 11 - CBSE - 2016/17
Lovell Menezes
 
Market segmentation
Market segmentationMarket segmentation
Market segmentation
RimshaKiran1
 
Strategic Marketing versus Tactical Marketing
Strategic Marketing versus Tactical MarketingStrategic Marketing versus Tactical Marketing
Strategic Marketing versus Tactical Marketing
Rodolfo Ybañez
 
1 introduction marketing concepts
1 introduction marketing concepts1 introduction marketing concepts
1 introduction marketing concepts
eyad-gh
 
Marketing management
Marketing managementMarketing management
Marketing management
AlkaSingh207
 
BASICS OF MARKETING - Unit-2- Osmania University
BASICS OF MARKETING - Unit-2- Osmania UniversityBASICS OF MARKETING - Unit-2- Osmania University
BASICS OF MARKETING - Unit-2- Osmania University
Balasri Kamarapu
 
Fundamentals Of Marketing & Customer Service
Fundamentals Of  Marketing &  Customer  ServiceFundamentals Of  Marketing &  Customer  Service
Fundamentals Of Marketing & Customer Service
guest082e19
 
Marketing mix
Marketing mixMarketing mix
Marketing mix
deepu2000
 

What's hot (20)

Consumer Segmentation - Introduction to Branding
Consumer Segmentation - Introduction to BrandingConsumer Segmentation - Introduction to Branding
Consumer Segmentation - Introduction to Branding
 
Market segmentation
Market segmentationMarket segmentation
Market segmentation
 
Market Segmentation
 Market Segmentation Market Segmentation
Market Segmentation
 
Market Segmentation, Targeting and Positioning - Benefits of Segmentation
Market Segmentation, Targeting and Positioning - Benefits of SegmentationMarket Segmentation, Targeting and Positioning - Benefits of Segmentation
Market Segmentation, Targeting and Positioning - Benefits of Segmentation
 
Marketing Management
Marketing ManagementMarketing Management
Marketing Management
 
Rediscovering Ma
Rediscovering MaRediscovering Ma
Rediscovering Ma
 
Marketing management complete PPT
Marketing management complete PPTMarketing management complete PPT
Marketing management complete PPT
 
STP and consumer behaviour
STP and consumer behaviourSTP and consumer behaviour
STP and consumer behaviour
 
Market Segmentation Analysis Example PowerPoint Presentation Slides
Market Segmentation Analysis Example PowerPoint Presentation SlidesMarket Segmentation Analysis Example PowerPoint Presentation Slides
Market Segmentation Analysis Example PowerPoint Presentation Slides
 
Unit 2 marketing management
Unit 2 marketing managementUnit 2 marketing management
Unit 2 marketing management
 
Marketing process, Mktg mix, NPD,PLC, STP, Distribution
Marketing process, Mktg mix, NPD,PLC, STP, DistributionMarketing process, Mktg mix, NPD,PLC, STP, Distribution
Marketing process, Mktg mix, NPD,PLC, STP, Distribution
 
Unit 2 market segmentation - Class 11 - CBSE - 2016/17
Unit 2   market segmentation - Class 11 - CBSE - 2016/17Unit 2   market segmentation - Class 11 - CBSE - 2016/17
Unit 2 market segmentation - Class 11 - CBSE - 2016/17
 
Market segmentation
Market segmentationMarket segmentation
Market segmentation
 
Strategic Marketing versus Tactical Marketing
Strategic Marketing versus Tactical MarketingStrategic Marketing versus Tactical Marketing
Strategic Marketing versus Tactical Marketing
 
1 introduction marketing concepts
1 introduction marketing concepts1 introduction marketing concepts
1 introduction marketing concepts
 
Marketing management
Marketing managementMarketing management
Marketing management
 
BASICS OF MARKETING - Unit-2- Osmania University
BASICS OF MARKETING - Unit-2- Osmania UniversityBASICS OF MARKETING - Unit-2- Osmania University
BASICS OF MARKETING - Unit-2- Osmania University
 
Fundamentals Of Marketing & Customer Service
Fundamentals Of  Marketing &  Customer  ServiceFundamentals Of  Marketing &  Customer  Service
Fundamentals Of Marketing & Customer Service
 
Marketing mix
Marketing mixMarketing mix
Marketing mix
 
Evans berman chapter_04
Evans berman chapter_04Evans berman chapter_04
Evans berman chapter_04
 

Similar to Forecasting the future for profit - SCIP presentation

SCIP UK Presents: Best in Class Competitive Intelligence | Forecasting - An E...
SCIP UK Presents: Best in Class Competitive Intelligence | Forecasting - An E...SCIP UK Presents: Best in Class Competitive Intelligence | Forecasting - An E...
SCIP UK Presents: Best in Class Competitive Intelligence | Forecasting - An E...
milnerltd
 
MARKSTRAT - VER 7.0 - 1st PPT.pptx
MARKSTRAT - VER 7.0 - 1st PPT.pptxMARKSTRAT - VER 7.0 - 1st PPT.pptx
MARKSTRAT - VER 7.0 - 1st PPT.pptx
ManishAggarwal766361
 
Customer success platforms market ppt
Customer success platforms market  pptCustomer success platforms market  ppt
Customer success platforms market ppt
DheerajPawar4
 
Customer success platforms market ppt
Customer success platforms market  pptCustomer success platforms market  ppt
Customer success platforms market ppt
DheerajPawar4
 
3 d mapping and modeling market ppt
3 d mapping and modeling market ppt3 d mapping and modeling market ppt
3 d mapping and modeling market ppt
DheerajPawar4
 
Light meter market
Light meter marketLight meter market
Light meter market
VikasDeshmukh17
 
Light meter market
Light meter marketLight meter market
Light meter market
sagarkangude
 
Real time bidding market ppt
Real time bidding market pptReal time bidding market ppt
Real time bidding market ppt
DheerajPawar4
 
Email encryption market ppt
Email encryption market pptEmail encryption market ppt
Email encryption market ppt
DheerajPawar4
 
Email encryption market ppt
Email encryption market pptEmail encryption market ppt
Email encryption market ppt
DheerajPawar4
 
MARKETING STRATEGY content
MARKETING STRATEGY contentMARKETING STRATEGY content
MARKETING STRATEGY content
Phan Phuong
 
Call center ai market ppt
Call center ai market pptCall center ai market ppt
Call center ai market ppt
DheerajPawar4
 
Call center ai market ppt
Call center ai market pptCall center ai market ppt
Call center ai market ppt
DheerajPawar4
 
Energy and utilities analytics market worth $4.3 billion by 2025
Energy and utilities analytics market worth $4.3 billion by 2025Energy and utilities analytics market worth $4.3 billion by 2025
Energy and utilities analytics market worth $4.3 billion by 2025
DheerajPawar4
 
Smart mining market ppt
Smart mining market  pptSmart mining market  ppt
Smart mining market ppt
DheerajPawar4
 
Smart mining market ppt
Smart mining market  pptSmart mining market  ppt
Smart mining market ppt
DheerajPawar4
 
Connected Mining Market to grow 9.98 Billion USD by 2020
Connected Mining Market to grow 9.98 Billion USD by 2020Connected Mining Market to grow 9.98 Billion USD by 2020
Connected Mining Market to grow 9.98 Billion USD by 2020
DheerajPawar4
 
Robotics and automation actuators marketRobotics and Automation Actuators Mar...
Robotics and automation actuators marketRobotics and Automation Actuators Mar...Robotics and automation actuators marketRobotics and Automation Actuators Mar...
Robotics and automation actuators marketRobotics and Automation Actuators Mar...
KiranDeshmukh42
 
3 d micro battery market
3 d micro battery market 3 d micro battery market
3 d micro battery market
Kalyani Deshmukh
 
Sustainable Clothing Market 2021.ppt
Sustainable Clothing Market 2021.pptSustainable Clothing Market 2021.ppt
Sustainable Clothing Market 2021.ppt
HazelFlores20
 

Similar to Forecasting the future for profit - SCIP presentation (20)

SCIP UK Presents: Best in Class Competitive Intelligence | Forecasting - An E...
SCIP UK Presents: Best in Class Competitive Intelligence | Forecasting - An E...SCIP UK Presents: Best in Class Competitive Intelligence | Forecasting - An E...
SCIP UK Presents: Best in Class Competitive Intelligence | Forecasting - An E...
 
MARKSTRAT - VER 7.0 - 1st PPT.pptx
MARKSTRAT - VER 7.0 - 1st PPT.pptxMARKSTRAT - VER 7.0 - 1st PPT.pptx
MARKSTRAT - VER 7.0 - 1st PPT.pptx
 
Customer success platforms market ppt
Customer success platforms market  pptCustomer success platforms market  ppt
Customer success platforms market ppt
 
Customer success platforms market ppt
Customer success platforms market  pptCustomer success platforms market  ppt
Customer success platforms market ppt
 
3 d mapping and modeling market ppt
3 d mapping and modeling market ppt3 d mapping and modeling market ppt
3 d mapping and modeling market ppt
 
Light meter market
Light meter marketLight meter market
Light meter market
 
Light meter market
Light meter marketLight meter market
Light meter market
 
Real time bidding market ppt
Real time bidding market pptReal time bidding market ppt
Real time bidding market ppt
 
Email encryption market ppt
Email encryption market pptEmail encryption market ppt
Email encryption market ppt
 
Email encryption market ppt
Email encryption market pptEmail encryption market ppt
Email encryption market ppt
 
MARKETING STRATEGY content
MARKETING STRATEGY contentMARKETING STRATEGY content
MARKETING STRATEGY content
 
Call center ai market ppt
Call center ai market pptCall center ai market ppt
Call center ai market ppt
 
Call center ai market ppt
Call center ai market pptCall center ai market ppt
Call center ai market ppt
 
Energy and utilities analytics market worth $4.3 billion by 2025
Energy and utilities analytics market worth $4.3 billion by 2025Energy and utilities analytics market worth $4.3 billion by 2025
Energy and utilities analytics market worth $4.3 billion by 2025
 
Smart mining market ppt
Smart mining market  pptSmart mining market  ppt
Smart mining market ppt
 
Smart mining market ppt
Smart mining market  pptSmart mining market  ppt
Smart mining market ppt
 
Connected Mining Market to grow 9.98 Billion USD by 2020
Connected Mining Market to grow 9.98 Billion USD by 2020Connected Mining Market to grow 9.98 Billion USD by 2020
Connected Mining Market to grow 9.98 Billion USD by 2020
 
Robotics and automation actuators marketRobotics and Automation Actuators Mar...
Robotics and automation actuators marketRobotics and Automation Actuators Mar...Robotics and automation actuators marketRobotics and Automation Actuators Mar...
Robotics and automation actuators marketRobotics and Automation Actuators Mar...
 
3 d micro battery market
3 d micro battery market 3 d micro battery market
3 d micro battery market
 
Sustainable Clothing Market 2021.ppt
Sustainable Clothing Market 2021.pptSustainable Clothing Market 2021.ppt
Sustainable Clothing Market 2021.ppt
 

Recently uploaded

Sharpen existing tools or get a new toolbox? Contemporary cluster initiatives...
Sharpen existing tools or get a new toolbox? Contemporary cluster initiatives...Sharpen existing tools or get a new toolbox? Contemporary cluster initiatives...
Sharpen existing tools or get a new toolbox? Contemporary cluster initiatives...
Orkestra
 
Bonzo subscription_hjjjjjjjj5hhhhhhh_2024.pdf
Bonzo subscription_hjjjjjjjj5hhhhhhh_2024.pdfBonzo subscription_hjjjjjjjj5hhhhhhh_2024.pdf
Bonzo subscription_hjjjjjjjj5hhhhhhh_2024.pdf
khadija278284
 
Bitcoin Lightning wallet and tic-tac-toe game XOXO
Bitcoin Lightning wallet and tic-tac-toe game XOXOBitcoin Lightning wallet and tic-tac-toe game XOXO
Bitcoin Lightning wallet and tic-tac-toe game XOXO
Matjaž Lipuš
 
International Workshop on Artificial Intelligence in Software Testing
International Workshop on Artificial Intelligence in Software TestingInternational Workshop on Artificial Intelligence in Software Testing
International Workshop on Artificial Intelligence in Software Testing
Sebastiano Panichella
 
Announcement of 18th IEEE International Conference on Software Testing, Verif...
Announcement of 18th IEEE International Conference on Software Testing, Verif...Announcement of 18th IEEE International Conference on Software Testing, Verif...
Announcement of 18th IEEE International Conference on Software Testing, Verif...
Sebastiano Panichella
 
Eureka, I found it! - Special Libraries Association 2021 Presentation
Eureka, I found it! - Special Libraries Association 2021 PresentationEureka, I found it! - Special Libraries Association 2021 Presentation
Eureka, I found it! - Special Libraries Association 2021 Presentation
Access Innovations, Inc.
 
Acorn Recovery: Restore IT infra within minutes
Acorn Recovery: Restore IT infra within minutesAcorn Recovery: Restore IT infra within minutes
Acorn Recovery: Restore IT infra within minutes
IP ServerOne
 
Competition and Regulation in Professional Services – KLEINER – June 2024 OEC...
Competition and Regulation in Professional Services – KLEINER – June 2024 OEC...Competition and Regulation in Professional Services – KLEINER – June 2024 OEC...
Competition and Regulation in Professional Services – KLEINER – June 2024 OEC...
OECD Directorate for Financial and Enterprise Affairs
 
Obesity causes and management and associated medical conditions
Obesity causes and management and associated medical conditionsObesity causes and management and associated medical conditions
Obesity causes and management and associated medical conditions
Faculty of Medicine And Health Sciences
 
Getting started with Amazon Bedrock Studio and Control Tower
Getting started with Amazon Bedrock Studio and Control TowerGetting started with Amazon Bedrock Studio and Control Tower
Getting started with Amazon Bedrock Studio and Control Tower
Vladimir Samoylov
 
Doctoral Symposium at the 17th IEEE International Conference on Software Test...
Doctoral Symposium at the 17th IEEE International Conference on Software Test...Doctoral Symposium at the 17th IEEE International Conference on Software Test...
Doctoral Symposium at the 17th IEEE International Conference on Software Test...
Sebastiano Panichella
 
0x01 - Newton's Third Law: Static vs. Dynamic Abusers
0x01 - Newton's Third Law:  Static vs. Dynamic Abusers0x01 - Newton's Third Law:  Static vs. Dynamic Abusers
0x01 - Newton's Third Law: Static vs. Dynamic Abusers
OWASP Beja
 
somanykidsbutsofewfathers-140705000023-phpapp02.pptx
somanykidsbutsofewfathers-140705000023-phpapp02.pptxsomanykidsbutsofewfathers-140705000023-phpapp02.pptx
somanykidsbutsofewfathers-140705000023-phpapp02.pptx
Howard Spence
 

Recently uploaded (13)

Sharpen existing tools or get a new toolbox? Contemporary cluster initiatives...
Sharpen existing tools or get a new toolbox? Contemporary cluster initiatives...Sharpen existing tools or get a new toolbox? Contemporary cluster initiatives...
Sharpen existing tools or get a new toolbox? Contemporary cluster initiatives...
 
Bonzo subscription_hjjjjjjjj5hhhhhhh_2024.pdf
Bonzo subscription_hjjjjjjjj5hhhhhhh_2024.pdfBonzo subscription_hjjjjjjjj5hhhhhhh_2024.pdf
Bonzo subscription_hjjjjjjjj5hhhhhhh_2024.pdf
 
Bitcoin Lightning wallet and tic-tac-toe game XOXO
Bitcoin Lightning wallet and tic-tac-toe game XOXOBitcoin Lightning wallet and tic-tac-toe game XOXO
Bitcoin Lightning wallet and tic-tac-toe game XOXO
 
International Workshop on Artificial Intelligence in Software Testing
International Workshop on Artificial Intelligence in Software TestingInternational Workshop on Artificial Intelligence in Software Testing
International Workshop on Artificial Intelligence in Software Testing
 
Announcement of 18th IEEE International Conference on Software Testing, Verif...
Announcement of 18th IEEE International Conference on Software Testing, Verif...Announcement of 18th IEEE International Conference on Software Testing, Verif...
Announcement of 18th IEEE International Conference on Software Testing, Verif...
 
Eureka, I found it! - Special Libraries Association 2021 Presentation
Eureka, I found it! - Special Libraries Association 2021 PresentationEureka, I found it! - Special Libraries Association 2021 Presentation
Eureka, I found it! - Special Libraries Association 2021 Presentation
 
Acorn Recovery: Restore IT infra within minutes
Acorn Recovery: Restore IT infra within minutesAcorn Recovery: Restore IT infra within minutes
Acorn Recovery: Restore IT infra within minutes
 
Competition and Regulation in Professional Services – KLEINER – June 2024 OEC...
Competition and Regulation in Professional Services – KLEINER – June 2024 OEC...Competition and Regulation in Professional Services – KLEINER – June 2024 OEC...
Competition and Regulation in Professional Services – KLEINER – June 2024 OEC...
 
Obesity causes and management and associated medical conditions
Obesity causes and management and associated medical conditionsObesity causes and management and associated medical conditions
Obesity causes and management and associated medical conditions
 
Getting started with Amazon Bedrock Studio and Control Tower
Getting started with Amazon Bedrock Studio and Control TowerGetting started with Amazon Bedrock Studio and Control Tower
Getting started with Amazon Bedrock Studio and Control Tower
 
Doctoral Symposium at the 17th IEEE International Conference on Software Test...
Doctoral Symposium at the 17th IEEE International Conference on Software Test...Doctoral Symposium at the 17th IEEE International Conference on Software Test...
Doctoral Symposium at the 17th IEEE International Conference on Software Test...
 
0x01 - Newton's Third Law: Static vs. Dynamic Abusers
0x01 - Newton's Third Law:  Static vs. Dynamic Abusers0x01 - Newton's Third Law:  Static vs. Dynamic Abusers
0x01 - Newton's Third Law: Static vs. Dynamic Abusers
 
somanykidsbutsofewfathers-140705000023-phpapp02.pptx
somanykidsbutsofewfathers-140705000023-phpapp02.pptxsomanykidsbutsofewfathers-140705000023-phpapp02.pptx
somanykidsbutsofewfathers-140705000023-phpapp02.pptx
 

Forecasting the future for profit - SCIP presentation

  • 1. © Copyright 2016 Milner Strategic Marketing Ltd Forecasting the Future for Profit Jonathan Davenport Milner Strategic Marketing 10th May 2016
  • 2. 2© Copyright 2016 Milner Strategic Marketing Ltd • Milner Strategic Marketing Ltd is a business consultancy that specialises in working with technology companies • Clients want help with market analysis, strategy and marketing programmes • Extensive experience of forecasting markets with high levels of accuracy • Acknowledged experts: materials widely published • I have built over 50 market models over the last 8 years with forecast models containing ~15m cells Milner Strategic Marketing Ltd
  • 3. QUESTION: Forecasting the Future for Profit Which of your companies has its own market model?
  • 5. 5© Copyright 2016 Milner Strategic Marketing Ltd What should Blockbuster’s market forecast have looked like?
  • 6. DISCUSSION POINT: Forecasting the Future for Profit Can you think of other companies that failed because they did not understand how their target market would evolve?
  • 7. 7© Copyright 2016 Milner Strategic Marketing Ltd Consumer adoption of technological innovations can be predicted Consumer product S-curves Source: North (2012)
  • 8. 8© Copyright 2016 Milner Strategic Marketing Ltd A market forecast model provides a detailed understanding of future consumer and competitive behavior
  • 10. 10© Copyright 2016 Milner Strategic Marketing Ltd Secondary research collects data on the size of customer base and competitor position Customer-focused data Competitor-focused data Company Website Company Internal Data Social Media Trade Press Industry Analysts Popular Press Statistics Authorities
  • 11. 11© Copyright 2016 Milner Strategic Marketing Ltd Primary research provides insights into customer behavior and competitor trends Channel Partners FOI Customers Internal Experts Industry Experts Internal Experts Customers Customer-focused data Competitor-focused data Structured Interviews Surveys and Analysis Suppliers
  • 12. DISCUSSION POINT: Forecasting the Future for Profit What challenges do you face in your company – too much or too little market data?
  • 14. 14© Copyright 2016 Milner Strategic Marketing Ltd Understand your market, which needs to be precisely defined in the model Total Available Market, Served Available Market, Target Market
  • 15. 15© Copyright 2016 Milner Strategic Marketing Ltd Markets are complex. Identify the structural elements that are relevant and bespoke to your market Geography Geography by Sector by Product Type 2010 2019 MarketSize(Geography, Sector,ProductType) Product Type C Product Type B Product Type A 2010 2019 Product A MarketSize(Geography,Sector, ProductType,Product) Geography by Sector by Product Type by Product 2019 Country G Country E Country A MarketSize(Geography) Country C Country D Country B Country F Geography by Sector 2010 2019 MarketSize(Geography, Sector) Sector E Sector C Sector B Sector D Sector A Other Product D Rest of World N=6 N=3 Product B Product C 2010 N=4N=8
  • 16. 16© Copyright 2016 Milner Strategic Marketing Ltd The model provides a detailed breakdown of sales volumes by geography, sector, product type and product
  • 17. DISCUSSION POINT: Forecasting the Future for Profit Would you describe your market as emerging or mature?
  • 19. 19© Copyright 2016 Milner Strategic Marketing Ltd Scenario planning helps you anticipate the dynamics of different potential futures The Day After Tomorrow Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut dignissim eleifend felis. Maecenas tincidunt tincidunt nulla at tristique. Nam posuere lobortis mattis. Pellentesque eu quam odio. Cras dictum enim et condimentum pretium. In commodo id augue nec sagittis. Maecenas pellentesque metus sit amet ex sagittis sagittis. Ut eros purus, mollis quis sem at, tincidunt tincidunt nisl. Nunc id tortor vitae metus iaculis feugiat sed in eros. Suspendisse non sagittis mi, eu tincidunt diam. Aliquam a massa quis magna tempor fermentum. Ut venenatis turpis id dolor laoreet, et placerat orci cursus. Sed mi magna, ultricies et rhoncus et, finibus in velit. Quisque sem enim, egestas consectetur dignissim sed, luctus vel tortor. In hac habitasse platea dictumst. Curabitur tempus lobortis dapibus. Pellentesque habitant morbi tristique senectus et netus et malesuada fames ac turpis egestas. Nunc in tortor vestibulum, tincidunt lorem a, feugiat nisi. Maecenas molestie mattis leo, ut rhoncus orci pellentesque ut. Vestibulum porttitor, dolor eget hendrerit ultrices, nisl magna porttitor sem, id pretium urna neque vel nisl. Morbi id diam venenatis nulla vestibulum finibus eu sed diam. Integer hendrerit bibendum libero, sit amet accumsan quam. Vestibulum egestas molestie velit nec varius. Integer rutrum, arcu vitae posuere finibus, arcu lacus commodo elit, in posuere eros neque in augue. Describe each scenario Analyse potential scenarios Identify critical variables Variables Historic sales Consumer Adoption Theory Market penetration Seasonality Country demographics Economic factors Forecast the impact of scenarios 1 2 3 4
  • 20. 20© Copyright 2016 Milner Strategic Marketing Ltd Forecasting Emerging Markets: Diffusion of Innovation and Market Churn provides a robust approach for new tech New Adopters Total Demand Market Churn Innovators (2.5%) Early Majority (34%) Late Majority (34%) Early Adopters (13.5%) Laggards (16%) Market Churn: Technology has a predictable life cycle. Milner analyses the churn (replacement) rate, which is affected by product durability and technology upgrade, to forecast the long-term sales demand for replacement products. Total Demand: The total demand forecast takes into account both sales of new and replacement products over time. New Adopters – Diffusion of Innovation: According to Diffusion of Innovation, the adoption curve can be broken into five sections of adopters with different characteristics and behaviours, affecting the market dynamics. The curve predicts the proportion of the target population that will adopt the new technology over time. Diffusion of Innovation and Market Churn Methodology
  • 21. 21© Copyright 2016 Milner Strategic Marketing Ltd Forecasting Mature Markets: Anchor Metrics can be used to calculate sector demand Anchor Metric Sector Demand Output Multiplier Anchor Metric: A unit which allows us to scale the size of the sector and understand the market trends e.g. car production. Production Output Multiplier: The amount of product used in a single anchor metric point e.g. number of widgets per car. Total Sector Demand for one time period: The sector’s anchor metric is multiplied by the appropriate production output multiplier. Total Sector Demand over time: The sector demand is anchored to changes in sector size, by the sector anchor metric. This allows changes in demand over time to be calculated. The Anchor Metrics Methodology
  • 22. DISCUSSION POINT: Forecasting the Future for Profit What are the key drivers that influence customer purchasing behaviour in your markets?
  • 23. HOW TO GET BUY-IN? Forecasting the Future for Profit
  • 24. 24© Copyright 2016 Milner Strategic Marketing Ltd Analysis of the results yields valuable and sometimes unexpected insights into the market MarketSizeSectorSize ProductType Size ProductSize Market Units Market Value
  • 25. 25© Copyright 2016 Milner Strategic Marketing Ltd Building credibility of the model and developing data-driven recommendations ensures buy-in Model results and analysis Conclusions and recommendationsDiscussion -20.0% -10.0% 0.0% 10.0% 20.0% 0 2,000 4,000 6,000 8,000 Country A Country B Country C Country D Country E Country F Country G Other SalesVolume(unit) Forecasting Accuracy Forecast 2013 Actual 2013 Forecast 2014 Actual 2014 Forecast 2015 Actual 2015 Accuracy 2013 Accuracy 2014 Accuracy 2015 0% 5% 10% 15% 20% 25% 30% 35% Country ACountry BCountry CCountry DCountry ECountry FCountry G Other MarketShareofUnitSales Triangulation of Model against Analyst Market Share Estimates (2015) Analyst Report Estimate 2015 Milner Model Estimate 2015 Internal Estimate 2015 Data-driven conclusions and recommendationsTriangulation ensures forecasting accuracy
  • 26. DISCUSSION POINT: Forecasting the Future for Profit How would this sort of information help you in your day job?
  • 28. 28© Copyright 2016 Milner Strategic Marketing Ltd The forecast output is valuable to all departments. Using one data source means the whole company is aligned 3 key applications of model output • Supporting an internal investment decision1 • Developing the product roadmap2 • Identifying revenue growth opportunities3
  • 29. 29© Copyright 2016 Milner Strategic Marketing Ltd 2008 Evaluating a Business Unit - To underpin an internal decision about whether to invest in or divest one of its Internet Sector business units Practical examples of using a market forecast model 2014 Forecasting the Smart Phone and Tablet Markets - To understand the buying behavior across different price points, vendors and operating systems 2015 Gauging Revenue Growth Opportunities - To identify the global market demand for ceramic fibre used in high temperature and fire protection • Growth in demand from emerging markets, e.g. China and India • Change in vendor dynamics – 16 key vendors • Change in consumer buying behavior – 11 price points, 11 operating systems • The rise of Android operating system was identified • 27 individual countries across 4 regions were analysed to identify geo hotspots • Revenue opportunities in 11 sectors by material type (3) by product form (8) were examined • Detailed pricing analysis revealed market trends and Morgan’s price premium • Key market forces were outlined • The impact of the recession on sales was quantified • The market size of the unit was estimated both in volume and value terms • Four commercial options were provided
  • 30. DISCUSSION POINT: Forecasting the Future for Profit Where does the strategic decision making function sit within your company?