Qualitative or Judgmental methods

In this age of management science and computers, why must we resort to qualitative methods to make some of the most important predictions of future demands for products and services, predictions on which great risks involving large investments in facilities and market development hinge? Further, past data even we have no historical records, statistical methods have no validity, Further past data even when they exist may not be representative of future conditions. Estimates of what people think, samplings of how they react to market tests, knowledge of consumers’ behavior, and analogies to similar situations may be the best we can do. Given this situation, the most scientific approach is to bring as much order as possible to these kinds of judgments. We cannot create data that do not exist. The qualitative methods are of considerable significance, then, because they provide a basis for some important decisions.

The Delphi Method:

Technological forecasting is a term used in conjunctions with the longest term predictions, and the Delphi technique is the methodology often used as the vehicle for such forecasting. The objective of the Delphi technique is to probe into the future in hopes of anticipating new products and processes in the rapidly changing environment of today’s culture and economy. In the short range, such predictions can also be used to estimate market sizes and timing.

The Delphi technique draws on a panel of experts in a way that eliminates the potential dominance of the most prestigious, the most verbal, and the best salespeople. The object is to obtain expert opinion in the form of a consensus instead of a compromise. The result is pooled judgment, in which both the range of opinion and the reasons for difference of opinion can be seen. The Delphi technique was first developed by the RAND Corporation as a means of achieving these kinds of results. In contrast to conferences and panels where the individuals involved are in direct communication, this technique eliminates the undesirable effects of group interaction.

The panel of experts can be organized in various ways, and it often includes individuals from both inside and outside the organization. Each panel member is an expert on some aspect of the problem, but no one is an expert on the entire problem. In general, the procedure involves the following.

1. Each expert in the group makes independent predictions in the form of brief statements.

2. The coordinator edits and clarifies these statements.
3.The coordinator provides a series of written questions to the experts that include feedback supplied by the other experts.

4. Steps 1 to 3 are repeated several times. In practice, convergence is usually obtained after a small number of rounds.

5. One of the most extensive probes into the technological future was reported by TRW, Inc (North and Pyke, 1969).

6. Market Surveys: Market surveys and analyses of consumer behavior have become quite sophisticated, and the data that result are extremely valuable inputs for predicting market demand. In general, the methods involve the use of questionnaires, consumer panels, and tests of new pro-ducts and services. The field is a specialty in itself and beyond our scope.

There is a considerable amount of literature dealing with the estimation of new product performance based on consumer panels and analytical approaches as well as simulation and other techniques (Bass, King, and Pessemeier, 1968). Proposed products and services can be compared with the products and known plans of competitors and new market segments can be exploited with variations of product designs and quality levels,. In such instances, comparisons can be made using data on existing products. These kinds of data are often the best available to refine the designs of products and facilities for new ventures.