SALES
FORECASTS FOR EXISTING CONSUMER PRODUCTS AND SERVICES: DO PURCHASE
INTENTIONS CONTRIBUTE TO ACCURACY?
by V. Kumar, J. Scott Armstrong, and Vicki G. Morwitz
Purchase intentions are routinely used to forecast sales of existing
products and services. While past studies have shown that intentions
are predictive of sales, they have only examined the absolute
accuracy of intentions, not their accuracy relative to other forecasting
methods. For example, no research has been bale to demonstrate
that intentions-based forecasts can improve upon a simple extrapolation
of past sales trends. We examined the relative accuracy of four
methods that forecast sales from intentions. We tested these methods
using four data sets involving different products and time horizons;
one of French automobile sales, two of US automobile sales, and
one of US wireless services. For all four products and time horizons,
each of the four intentions-based forecasting methods was more
accurate than an extrapolation of past sales. Combinations of
these forecasting methods using equal weights lead to even greater
accuracy, with error rates about one-third lower than extrapolations
of past sales. Thus, it appears that purchase intentions can provide
better forecasts than a study, the consistence of the results
in our study suggest that intentions are a valuable input to sales
forecasts.
International
Journal of Forecasting, Vol. 16 (Year 2000)
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