Page 60 - DMGT521_PROJECT_MANAGEMENT

Unit 4: Project Analysis and Selection

(d) Owing to limited experience, usually in their employment, salesperson may not Notes
have the requisite knowledge and experience
This method may be useful for long-term forecasts. It is also used for new products or new
variants of existing products.
2. Survey of Customers Intention: Another method of demand forecasting is to carry out a
survey of what consumers prefer and intend to buy. If the product is sold to a few large
industrial buyers, survey would involve interviewing them. If it is a consumer durable
product, a sample survey is carried out for questioning a few representative consumers
about what they are planning or intending to buy. It is neither realistic nor desirable to
query all consumers either through direct contact or through printed questionnaire by
mail.
These surveys serve useful purpose in establishing relationships between:

(a) demand and price
(b) demand and income of consumers
(c) demand and expenditure on advertisement etc.
This method is preferred when bulk of the sales is to institutions and industrial buyers and
only a few of them have to be contacted.
Disadvantages are that customers may not know total requirements; in some cases they
are not certain about quantity to be purchased. Besides during shortages there is a tendency
to inflate their requirements. Survey method is not useful for households - interviewing
them is not only difficult out but also expensive. They are not able to give precise idea
about their intentions particularly when alternative products are available in the market.
3. Delphi Method of Demand Forecasting: Delphi method is a group process and aims at
achieving a consensus of the members. Herein experts in the field of marketing research
and demand forecasting are engaged in analyzing economic conditions carrying out sample
surveys of market conducting opinion polls.
Based on the above, demand forecast is worked out in following steps:
(a) Coordinator sends out a set of questions in writing to all the experts co-opted on the
panel who are requested to write back a brief prediction.
(b) Written predictions of experts are collated, edited and summarized together by the
Coordinator.
(c) Based on the summary, Coordinator designs a new set of questions and gives them
to the same experts who answer back again in writing.

(d) Coordinator repeats the process of collating, editing and summarizing the responses.
(e) Steps 3 and 4 are repeated by the Coordinator to experts with diverse backgrounds
until consensus is reached.

If there is divergence of opinions and hence conclusions, Coordinator has to sort it out
through mutual discussions. Coordinator has to have the necessary experience and
background as he plays a key role in designing structured questionnaires and synthesizing
the data.
Direct interaction among experts is avoided nor their identify is disclosed. Procedure also
avoids inter-personnel conflicts nor strong-willed experts are able to dominate the group.
This method is also used for technology forecasting.

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