FORECASTING THE DEVELOPMENT OF THE MARKET FOR BUSINESS TELEPHONES IN THE UK

The problem of producing medium- to long-term forecasts of the market for business telephones is examined. Growth curves are generally appro priate for forecasting developing markets. However, this market is par ticularly sensitive to the state of business confidence and the feasib ility of incorporating explanatory economic variables into the forecas ting model is investigated. Three different model types art compared: growth curves with a fixed saturation level, multivariate linear model s and growth curves with saturation levels determined by explanatory v ariables. The initial promise of models using explanatory variables is considerably diminished, once forecast rather than actual values of t hese variables are used. The market development model implicit in the growth curve is shown to be more robust than the linear model. Althoug h the variable saturation level growth curve grants more insight into the maturity of the market, it does not produce significantly better f orecasts than that with the fixed saturation level.