NEWS RELEASE February 2018
Advanced Forecasting Maximizes Profitable Growth in the Combust, Flow and Treat (CFT) Markets
The avalanche of digital information now engulfing us can either bury us or be utilized to maximize profits through “Advanced Forecasting”. Market research has in the past been used not as a guide but as an indicator to opportunities. “Advanced Forecasting” makes use of this digital information avalanche to guide capital investments as well as set up promotional budgets and sales quotas.
Markets can be divided into four categories including the three traditional ones and a new one created by the sea change in the business environment.
- TAM or Total Available Market is the total market demand for a product or service.
- SAM or Serviceable Available Market is the segment of the TAM targeted by your products and services which is within your geographical or asset reach.
- SOM or Serviceable Obtainable Market is the portion of SAM that you can capture.
- WOM or Wisdom-based obtainable market is the bigger opportunity created by a sea change in the route to market
Most typical $4,000 reports are based on top-down research and provide only “Possible TAM”. Top–down means that the report is based on interviews, annual reports and broad indicators. However, annual reports and interviews tend to reflect the conclusions from the top down reports. This creates an illusionary consensus. The volatility of the stock market is in part based on peaks caused by illusionary consensus and valleys caused by reality.
Many companies which understand the importance not only of SAM but SOM spend orders of magnitude more for custom market research than for a multi-client report. These large contracts allow very capable individuals to interview the most knowledgeable people and to spend lots of time sifting through the avalanche of data. They also have the funding to acquire multiple top down reports. The problem is that the results are likely to be greatly impacted by the illusionary consensus.
For a much more insightful analysis of SOM you need a bottoms up approach. Such an approach could cost millions of dollars. Fortunately, for many CFT subjects Mcilvaine has made this investment reflected in continuously updated reports compiled over the last 44 years.
Some of these reports are in the form of databases with specific project details and purchasing forecasts for the 1000 customers who buy most CFT. These bottoms up reports are then used in the multi-client market reports to provide bottoms up market forecasting.
This SAM effort leads the way to cost effective SOM forecasts. These analyses for very specific products in each industry in each territory can include several million specific forecast cells. In the case of a new product launch it may be desirable to provide even further segmentation. One example would be forecasts for ball valves for gas pipelines segmented by valve size, geography, large purchasers, trunnion vs floating and side entry vs top entry.
WOM expands Advanced Forecasting to include revenues based on supplemental IIoT products and services and revenues for expanded markets and increased margin in existing markets.
Reliable bottoms up SOM forecasts can contribute greatly to increasing profits through best allocation of capital, personnel, R&D and sales promotion. WOM forecasting will provide even greater rewards.
Mcilvaine can provide cost effective and reliable SOM and WOM forecasts.
More details are available from Bob Mcilvaine at 847 784 0012 ext. 112 This email address is being protected from spambots. You need JavaScript enabled to view it.
The bottoms up approach includes multi-client market reports listed at http://home.mcilvainecompany.com/index.php/markets
It includes databases listed at http://home.mcilvainecompany.com/index.php/databases
There is a five step WOM program to leverage Advanced Forecasting explained at www.mcilvainecompany.com
