Forecast refers to peep into the future, only having past trends and present analysis to understand from. It allows us to see the changes and obstacles beforehand to combat them prior to them happening. It is a very significant part of market analysis. Based on the target customer segment, future values and trends are estimated and attributed. It is only an estimate, on the lines of prediction. Using annual growths of the previous years and research on population, forecasting can be carried out.

While completely based on predictions and estimates, one might question the accuracy of such a forecast. Its accuracy can be verified by extending numbers to the segment size and address each by using the information from competitor sales. This forecasting, if done right, can influence Pricing, Policing and positioning.
Concepts such as Market Minimum and Market Potential greatly help in calculating the market demand. Market Minimum is the value of the solution that can be generated even without any sales or marketing. It works under properly defined parameters. A very important part of finding the market minimum deals with a measure called ‘Leverage’. Leverage can be calculated based on brand, the need of the market, and existing distribution channels.

Succeeding the sales and marketing strategies that are fully functioning, the amount of revenue generated is termed the Market Potential. Beyond the fulfillment of the Market Potential, there can be no upward inflation in sales.

The Current demand for a solution can be estimated by two methods. Beginning with the identification of potential customers and their revenue in the market is a part of the Market Buildup Method. Multiple-Factor Index method is done by giving weightage to the variable values of sales, population, and cost.

Future demand, on the other hand, can be estimated by recording various surveys and interviews for a selected sample group in the population. Previous trends and history are also studied thoroughly to estimate the same.