Visionary Research, Inc.

Demand Estimation in Research-Based Forecasts

noreply@blogger.com (Matt Kerwick) — Wed, 03 Feb 2010 17:29:00 +0000

I have had the honor and privilege of teaching research methods, statistics, and economics at The University of Texas at Austin and St. Edward's University over the past several years. I have taught undergraduate and MBA students, all while maintaining my full-time consulting practice. In this post, I reflect on the synergies produced between these various endeavors, in particular focusing on forecasting as a common consulting engagement that draws heavily from all three areas.

While there are many elements that go into the development of a forecast, I will address demand estimation as an input to a research-based forecast model in this post. When I teach economics, we cover a variety of methods that include conducting surveys of consumers or other decision makers about future events or decisions and reviewing historical data.

Surveys can be used to test the market's likely response to future events. These experiments can be simple and direct: would you purchase X at $Y if Z happened? They can also be more subtle and complex, involving the establishment of baseline behavior followed by the presentation of one or more scenarios involving product launches, price changes, communication campaigns, and/or product/service specifications. These more complex survey designs often include experimental plans that support conjoint analysis or discrete choice modeling, wherein scenario dimensions and product/service characteristics are varied in accordance with principles of balance and orthogonality to support predictions for ranges of possibility not explicitly covered by the survey design. At the end of the research process, however, you have still basically asked the same question: would you purchase X at $Y if Z happened? And, thus, the answer, or space of answers, is based on hypothetical, prospective estimates of future behavior. Such results are generally viewed as optimistic estimates of steady-state, efficient market conditions that need to be tempered in order to calibrate a forecast to real-world dynamics that delay adoption while word of mouth spreads (or confirms) what is known about the product/service tested in the research setting. After all, research, by design, generally strives to fully engage respondents in the decision process that we are studying, a state that is far less controllable in the real-world marketplace.

Regression analysis and other related approaches can be used to produce demand curves that are functions of a variety of measureable market conditions. Examples include recent period sales of the same or similar goods or services, broader market and economic conditions, production costs, levels of promotion and selling, and price point, just to name a few. Such historical models can be used in conjunction with models or results from surveys to allow a forecast to be informed by the rate of adoption experienced by precedent products under various real-world market conditions.

Taken together, along with common sense business acumen, these research methods can produce sound predictions about the likelihood that an individual or organization will adopt or purchase a product or service. The final factor, at least that I will discuss in this post, needed to inform a research-based forecast is an estimate of the size of the addressable market. Here we also turn to research, usually drawing on a variety of secondary sources to establish the number of consumers, patients, or organizations that broadly define a market and any established relevant segmentation schemes. Additional primary research then explores and subsequently quantifies the various decision flows and process steps that might be required to bridge the gap between the broadly defined marketplace and one that more closely resembles the relevant real-world situation. As an example, census data can provide estimates of households by geography and income; other research reports can provide estimates of the prevalence of high speed Internet access cut along those same dimensions. Primary research can then establish the relative size of consumer segments that have been shown to require differentiated marketing communications strategies.

Fantastic Austin Clients

noreply@blogger.com (Matt Kerwick) — Tue, 19 Jan 2010 15:26:00 +0000

As 2010 begins, we are working on projects for two fantastic Austin clients: SXSW and Austin Energy. Both of these clients could be case studies in the type of research opportunities that we seek. Both have a collaborative philosophy, both are allowing us to be deeply integrated into their planning process, and both are conducting research among their customers as a means of improving their already outstanding levels of service. These organizations are highly visible in our community and, each in their own way, make enormous contributions toward making our city one of best places to live, work, and play. Thank you for the opportunity to serve you!

The Visionary Engine

noreply@blogger.com (Matt Kerwick) — Tue, 12 Jan 2010 19:51:00 +0000

Our core competencies have common sense as a foundation, and building from the fundamentals of qualitative, quantitative, and secondary research, we address a number of vital planning areas for our clients. As a research and strategy consultancy, we will pick the gear or gears needed for your situation.

Common Sense Research Acumen
Market Segmentation
Satisfaction and Loyalty
Product Optimization
Price Elasticity of Demand
Forecasting

Segmentation Methods

noreply@blogger.com (Matt Kerwick) — Wed, 06 Jan 2010 18:50:00 +0000

Segmentation models and schematics have several principle uses, usually addressing most if not all of the research objectives listed here:

Identification and sizing of differentiated groups in the marketplace
Identification of market structures that can be leveraged in the optimization of product and service offerings by targeting unmet needs and associated attitudes
Identification of key messages that will resonate with various market segments
Identification of primary vehicles for communications
Screening of prospects so as to optimize the consideration and selling process

When planning a segmentation study, the first consideration is which approach best addresses your business planning context:

a priori based on an established world view
derived based on needs and attitudes as well as usage, purchase plans, etc.

Common segmentation measurements, usually taken in a survey of customers and prespective customers:

Satisfaction with what is available today, overall and at the feature, attribute, or benefit level
Importance of attributes, features, or benefits
The likelihood of taking action, via consideration &/or purchase in the near term
Frequency of action
Volume/sizes involved
Desirability of options available or prospectively specified
Agreement with various attitudinal statements
Agreement with various brand statements

What We Do

noreply@blogger.com (Matt Kerwick) — Fri, 13 Nov 2009 15:14:00 +0000

How satisfied are your customers? How will the market react to your product? Is your price optimal? Do you understand how the essential needs of your strategic segments differ?

As a research and business strategy consultancy, we provide insight through original solutions and customized approaches using diverse experience from the technology, healthcare and utility industries. We draw on comprehensive ranges of research methodologies and analytics to develop customized and affordable approaches that optimize the actionable insights for our clients. We begin each project by listening to our clients to fully understand their goals. Building from our library of proven baseline models and techniques, we develop custom designs that economically and comprehensively transform research data into concrete recommendations. Our research plan is the solution to the informational needs of your business decision-making problem.

Visionary Research's philosophy is simple: our success requires absolute commitment to the delivery of service unequaled in this industry. We seek clients who are willing to work with us as partners so that we can understand their business situation, then provide the best, most efficient research and planning for their decisions. We understand that research data alone should not be the sole basis for decision-making. Our cumulative 20+ years of research and business-consulting experience not only allows us to provide our clients with the quantitative information they need, but also the qualitative, commonsense insight that can only come from experience. Our business model is designed so that our profitability depends upon timely delivery of actionable insights accompanied by comprehensive consultation and commonsense recommendations.

We bring a unique combination of expertise to our clients' research and planning process. In addition to our years of research and strategic planning, our founders have been engineers, scientists, and managers in companies like yours with client-side expertise in software and hardware development, laboratory research, manufacturing, database design, operations planning, and financial modeling. Our vision includes the totality of our clients' business challenges.