DESIGN

OF A NEW

GOOD

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Design of a new good

House decoration

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House of quality

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Forecasting• Forecasting is the process of estimation in

unknown situations.

Seven Steps in Forecasting• Determine the use of the forecast• Select the items to be forecast• Determine the time horizon of the forecast• Select the forecasting model(s)• Gather the data• Make the forecast• Validate and implement results

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Determine the use of the forecastForecasts useful in projecting

• staffing levels• inventory levels• factory capacity

as product passes through life cycle stages.

Select the items to be forecastIn our case, we would study a prediction on sales versus time, to see the evolution, because our product is a really new product to our company.

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vs.

Determine the time horizon of the forecast

For our new good it would be more useful a long term or medium term forecasting.

Select the forecasting model(s)

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Due to the nature of the good which is not an exisiting product in the firm it would be preferable to do a qualitative forecast.However, in order to make a quantitative forecast of the good we will base our analysis in competitors results and in Mango’s increasing tendency in clothes sales.

Gather the data

• As our company has never designed house goods, we can’t gather any historical data about it.

• This is why we based our forecasting in our historical data about clothes sales and taking a glance at our main competitor Zara Home.

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Data offered by Mango

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Make the forecastSo, looking at historical data, and basing on the evolution of our company, we can make the next prediction:

Forecasting

300

320

340

360

380

400

420

440

460

480

500

JULY/S

EPT 08

OCT/D

EC 08

JAN/M

AR 09

APR/JUNE 0

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JULY/S

EPT 09

OCT/D

EC 09

JAN/M

AR 10

APR/JUNE 1

0

Time

Sal

es

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Make the forecastAssuming that Mango’s brand and image is gaining the confidence of customers. Good reputation. We can estimate an increasing tendency , similar to that of clothes, in the sales of our new good.

Moreover, since the first Zara Home opened its doors to the public in 2003, it’s been a great success. This reflected both in the growth of its sales which reached 139 million euros in 2006, with an increase of 78% with respect to the previous year . We can expect that tendency for Mango.

However, periods when more houses are sold can affect positively in sales, or in the other hand, crisis periods in this aspect can paralyse the market.

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Validate and implement results

Sales have been predicted by adding the gain of the new good sales to clothes sales.

Sales have been based on the economic situation during the year and the sales in house goods of our competitors.

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Other ideas

However, in order to increase sales we thought that it might be a good idea to give it an added value and some sort of differentiation from competitors.

For example, following Mango’s marketing policy, it could sell decoration collections designed by celebrities.

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Other ideas

Or maybe, it could focus on the decoration of small apartments trying to take the most of the available space.

And what is more, giving customers the service of proffesional decorators and designers when needed.

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