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Welcome back. This is Managing
New Product Launches.
I am Ed Addison from
NC State University.
This is session 6 on
sales forecasting.
The one thing that you
want to know about
sales forecasting is that
almost all sales
forecasts are wrong.
But some are useful
and you want to
do the best job that
you possibly can.
It's very difficult for new
products to forecast sales.
But we're going to
give it our best shot.
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Some of you may have heard of
the satellite phone Iridium that
was invented and launched in
the marketplace in the
late '90s and early 2000s.
Iridium was a satellite
based cell phone
and it is notorious for
having made a ridiculously
bad sales forecast
just about tanking the company.
Reason it made a
bad sales forecast
is because Iridium
assumed that just
because a satellite covered
the world that everyone
would want to use theirs.
But what they didn't see
ahead of time is that
their big handsets were weighty
and expensive and when
smartphones came out,
nobody wanted the Iridium
phone except people who
needed to make calls out in
the mountains or the desert.
Their sales forecast
was completely
wrong and the reason why was
because they made false
assumptions about
their market and about what
their market would want.
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The same thing was
true of Tesla.
There was an over exuberance in
the beginning about how many
people would buy a Tesla.
The difference between
Iridium and Tesla however is
that after Tesla discovered
that the demand wasn't as high,
they were able to take
corrective action
in terms of getting the
word out and getting
the infrastructure out for
their product including charging
stations and then demand
eventually grew successfully.
Whereas for Iridium,
the correction was
never really made and
bankruptcy and legal litigation
occurred in that case.
Now we're going to
talk a little bit
