Abstract:

This paper will look at two markets as case studies (microwave ovens and 3-in-l vacuum cleaners) and attempt to show that an accurate prediction could have been made of when the markets would peak. In each case study the prediction is made when the markets were growing at their fastest - the most difficult time to make such a forecast. The experiences gained from the case studies are then used to make a prediction for the camcorder market in Great Britain - a market which itself is currently undergoing a period of rapid volume growth. The principal device used to forecast the market peaks is a mathematical equation often referred to as the logistic equation. More commonly this particular tool is used in population forecasts but it works very well here too, providing the input data is accurate enough. Accurately predicting the market peak is one thing, but what happens after the peak also needs to be understood. Analysis of continuous consumer data can highlight whether the market is likely to go into rapid decline or to stabilize into a mature replacement market. The data used throughout comes from two sources: 1) Lek-Trak GfK's census based monthly retail audit of the electrical durables markets in Britain and 2) Home Audit GfK's quarterly consumer measurement. Home Audit acquisitions data is based on 100 postal/telephone interviews per year; the ownership comes from 10 face-to-face interviews per year.