Expert's Panel

A collection of timely and important topics posed to our panel of experts.

What is the best way to forecast sales on the adoption of a new widget or widget upgrade?

 (ep1057)
1. If you have 1,000 machines out there and you know they all need this upgrade. With a bit of awareness you can predict that pretty well. If it is a new product and you don't have any good primary market research, I don't think you have a prayer of doing a good job of it. In 1976 we introduced the LPCVD product to the market and it was 100 fold improvement on what existed in the market place. But it wasn't until 1981 that it was a hot property. When it is brand new it is difficult to predict. But, you have a lot of numerical things you can look at. You know how many customers there are; how many wafers go through that step. Just be aware that adoption never takes place as fast as you think it will. Everybody remember the 12" wafer program in 1997. It was supposed to be in production in 1998-99. Be conservative about your estimates. It's real easy to let your enthusiasm to carry you away and you over commit the company.
2. I would also say if you haven't been in the industry too long, which might even be 5 years, go to your senior management and ask for their advice. Intuition built on experience is invaluable.
3. Hopefully your company does some market research before your finish building the product. You will never answer the forecasting question with secondary research. You have to use primary research. You have to go out to the field and listen to your customers. Note I didn't say you have to talk to your customers, you have to listen to them. Then you have to interpret what they tell you. You go to a rural area and ask a guy what he wants to drive and it looks like a Mercedes. But, he is not going to buy a Mercedes. He's going to buy a pickup truck with dual wheels on the back so it can haul two tons of cherries. So you have to go out and do the primary research and then have someone in your company who is cleaver enough to look at the questions and the total of the answers and deduce this is what they will accept. Then there are three other things that will be of concern. One is the honesty of your own company. Microsoft said Windows 98 is the best system ever and you'll never need another one because it is bug-free. They lied to their own people and the market. Number two is the product life cycle—where the customer is on the PLC, where you are on your PLC and where the competitors are on their product life cycle. The third thing is timing. Call it dumb luck, but there is nothing more powerful than a product whose time has come, even if it is a crummy product.
4. This sounds to me like a product that didn't have an MRS (Market Requirement Statement). If you did it up-front like you should, you have a least some idea where you are going to focus the product, and some idea on how will buy it and when.
5. The Market Requirement Statement is part of selling the product development in the company. It contains an explanation or projection of what the market for the product is.