Availability in ATAR Forecasts

 

Availability in the ATAR forecasting model

Availability refers to the extent that the new product is available to consumers through retailers, various direct channels and online.

Put simply, it is a measure of the ability of consumers to purchase the new product if they wanted to. Take for example, a new candy bar being brought to market. Most candy bars are sold through convenience stores and supermarkets. A consumer may become aware of the new product through advertising and be interested in trialing the product if and when they see it in a store.

Using availability in the ATAR forecasts

For convenience products

For a simple product, such as our candy bar example, then availability would be the percentage of suitable retailers that are likely to stock and sell the new product. So for our example, it would be the percentage of convenience stores that choose to start retailing the new candy bar.

Therefore, if 50% of retailers are likely to take on the product, then the availability percentage we would use in the ATAR is 50% (the percentage of retailer take-up).

For shopping products

If we have a product that people generally shop around for – such as furniture, where consumers may “browse” through multiple stores looking for the right product – then we need to take this shopping behavior into account.

Say we are marketing furniture and we are bringing a new line to market. If we are likely to get 10% retailer take-up of suitable stores, then we need to multiply that percentage by the number of stores that the average consumer will visit during their purchase decision.

If the average consumer visits three stores while shopping for furniture, then we can include a figure of 30% as our availability – which is 3 stores X the 10% retailer take-up = 30%

For specialty products

Specialty products are usually deliberately sought out by interested consumers. Typically, specialty products have exclusive distribution (meaning that they are not in many retail outlets). But because of the nature of the product, consumers will go out of their way to track down the product.

In this case, such as a luxury car or designer clothing, provided we have some retailer access in the geographic area, we can almost assume close to 100% availability.

For direct or online marketers

Another time we can assume quite high availability is when the firm/brand has its own direct channels and/or has its own online channel or access to online channels.

For most products sold through an online channel, we would generally assume close to 100% availability in the ATAR model (although this may vary in some countries with limited Internet penetration).

For companies with their own physical retail outlets , such as banks and fast food outlets, we would consider the proportion of the population that their branches/stores/outlets service. For example, McDonald’s stores may service as much as 80% (or more in some regions) of the population, whereas a smaller hamburger chain may only reach 20% of the population.

Related topics

Variations of the ATAR forecast – based on business models