ATAR Forecasting Calculator
The ATAR sales forecasting tool is the first online calculator to forecast sales of new consumer products.
Why use the atar calculator?
There are multiple approaches to generate a forecast for initial sales and repeat purchase during the New Product Development Process. Common approaches use top-down or bottom-up forecasting techniques. A forecast built on sales force predictions is one example of the bottom-up approach. A forecast developed from the opinions and predictions of executives is a traditional top-down approach. Building a sales forecast is one of the most important steps in the New Product Development Process, and historical company product performance may not be relevant for the evaluation of new and innovative product success.
ATAR is an assumption-based modeling technique, primarily used to forecast consumer packaged goods. The ATAR model uses target market size to suggest the magnitude of awareness, is proportioned down to those aware and willing to try, and then further assessed for those able to get availability to the product. The estimate is multiplied by the number of purchases expected in a given period to calculate the total new product value for repeat purchases. The initial trial market and repeat market size model generates a total volume estimate (e.g. annual volume).
At Trig, we specialize in services centered on driving innovation with client companies, including opportunity identification, customer research, and ideation facilitation and management. We are dedicated partners with our clients in the evaluation of competitive advantage for new product technologies. We help clients forecast product success based on product performance and customer, competitive, and financial metrics. Although we utilize multiple approaches to forecasting, the ATAR Forecasting model has allowed us to provide clients with a tool that synthesizes the behavior of the market by breaking it down to the market drivers contained within the ATAR acronym.
A leading manufacturer of hardware and security products faced a critical juncture in the life cycle of one of its mature products. The product faced steadily declining sales. Faced with a decision on whether to reinvest critical resources in a declining product with questionable brand equity, the company tasked Trig Innovation with designing and implementing customer research that would provide the client with a statistical forecast based upon the market drivers contained within the ATAR acronym.
Trig's customer research team collaborated with the company's project management team to identify several existing and potential market segments for the product. Once identified, each segment was recruited and surveyed for their overall enthusiasm for the product, as well as certain attributes of the brand and its performance. Upon conclusion of the research, the Trig team was able to help the client make a "Go / No-Go" decision to invest or divest the product/brand, as well as identify the top three segments that would be most responsive to a marketing campaign.
The concept/brand validation survey methodology also informed key variables for product forecasting. An ATAR forecasting model was developed to further inform managerial decision-making on which of the top three segments to pursue, what scale of marketing investment would be needed, as well as the size of channel partner needed to achieve the sales forecast.
Further analysis of channel partner strategy was conducted using portfolio management tools to emphasize the need for multiple products under a compelling brand.
Read more about the project here.
ATAR Forecasting Calculator
To get started, enter the size of your addressable market in the field at the top of the page, then click "Next Question." The ATAR calculator starts with an assumption that the total market can only get smaller as you progress though each stage of the sales funnel. A common market size to start with is 320 million - or the US population in 2015. Out of the US population, can we narrow it down further to demographics that are likely to buy the product? If you're not sure, please feel free to contact us for guidance on selecting quality inputs for a good ATAR forecast.
The ATAR forecast model estimates the percent of sales based on a given market size. We use these estimates to determine the potential success of a new product or service.
The ATAR model (Awareness, Trial, Availability, Repeat), is based on the concept of ‘Diffusion of Innovation.’ For someone to be considered a reliable buyer of a new product or service, they must first know it exists (Awareness). Once someone is aware of the existence of the new product, they need to opt to try it out (Trial). After someone has opted to try it out, they need to be able to actually purchase the product (Availability). If they are happy with the experience, they may adopt the product and become repeat buyers (Repeat).
To access our white paper with more insider tips on using the ATAR model, please enter your information below.
For further reading on the ATAR forecasting technique, please see:
Kahn, Kenneth B., Product Planning Essential, Thousand Oaks, CA: Sage Publications, 2000.
Crawford, Merle and diBenedetto, Antony, New Products Management, Boston: McGraw-Hill/Irwin, 2003