Forecasting is the process in business marketing and web development of determining what the business market that you are engaged in looks like demographically. It can also involve attempting to predict the movements of the existing market going forward so market strategies and business plans can be developed to anticipate and meet the changing demands. Many different forecasting strategies are used, and each market will have specific models that have worked in the past.

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Qualitative Forecasting Methods

Qualitative forecasting methods attempt to use actual data to determine a qualitative or actual market trend toward a certain position or function in the market. These methods involve looking at non-numerical data. For example, if you were attempting to forecast whether a new product would be successful, you could review customer surveys in which customers have described their views of the ideal product function. Qualitative forecasting methods are not as effective as quantitative methods, which are the most common methods and which come in a variety of different formats. They are often applied when a great deal of data are available on the target market.

Explanatory Methods

Explanatory forecasting methods use data to attempt to explain trends and to forecast future market direction based on existing data. These consider past performance and marketing trends, such as consumer spending reports and consumer confidence indexes, to attempt to determine the future path for a certain product, website or company. Explanatory methods involve looking at market activity to explain how and why trends occurred, not just to predict what will occur. Because the how is important here, this method is different than a time-series method which just considers what the future trends will be.

Time-Series Methods

References

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