Product cannibalization in the ATAR forecast Product cannibalization is when the firm’s new product “wins” a proportion of its sales (market share) from the firm’s other existing products – that is, the new product “eats away” the market share of the firm’s other products. We must take product cannibalization into account in the ATAR forecast … Read more…
What drives trial levels? There are numerous factors that will impact the percentage of consumers that trial a product, which marketers can influence and drive. Some of the factors to take into account include: Is this a product line extension? Product line extensions would generally have higher trial rates. Does this new product belong to … Read more…
Because of the nature of the structure of the ATAR forecasting model, the marketing department will become accountable for delivering the various ATAR components if the new product is approved for development and launch. This means, therefore, if you have indicated that the new product will generate a 25% level of awareness in the first … Read more…
Do I need to use the financial metrics? As you will see when you use the free Excel template for your ATAR forecasts, there are several financial metrics automatically produced at the bottom of the spreadsheet. As you can see, these financial metrics include: net present value (NPV) pay-back period (in years) internal rate of … Read more…
How important are the financials in the overall NP decision? The ATAR financial forecasting model for new products is simply one of the areas of evaluation for the go/no-go decision on whether or not to develop the product and take it to market. If you are currently studying new product marketing, or are actively involved … Read more…
Limitations of the ATAR forecasting model While there are numerous benefits of using the ATAR forecasting model for new products and marketing, there are also some limitations and cautions that you need to be aware of when using this approach. It is a highly sensitive forecasting model Probably the most significant concern with using the … Read more…
Why use the ATAR forecasting model for new products? Obviously there are many ways of approaching a financial forecast. However, the ATAR forecasting model is one that is explicitly designed for marketing purposes. So let’s explore the key advantages and benefits of using this particular forecasting model for new products and marketing. It aligns financial … Read more…
Repeat/rebuy in the ATAR forecast I tend to use the terms repeat purchases or rebuy interchangeably on this website, as they essentially communicate the same intention. Out of the four ATAR components, this one is the most important and the most critical one for the long-term financial success and viability of the product. As we … Read more…
Availability in the ATAR forecasting model Availability refers to the extent that the new product is available to consumers through retailers, various direct channels and online. Put simply, it is a measure of the ability of consumers to purchase the new product if they wanted to. Take for example, a new candy bar being brought … Read more…
The T in the ATAR forecasting model stands for trial. What is a trial? A trial in marketing terms may mean slightly different things at times; therefore we need to clarify what is a suitable input into the ATAR model. In most cases a trial refers to a first-time purchase by a consumer. This is … Read more…
