Markstrat - Estimating Lost Sales

Students can estimate their lost sales by comparing their purchase intentions (PI) - how many people intended to purchase brand X - and their market shares (MS) - how many people actually purchased brand X.

In the normal case, PI = MS.

If PI > MS, some consumers were not able to find brand X in stores. This may be due to a stock out or to a poor distribution.

Lost sales are equal to : Market Size X (PI - MS).

If lost sales are negative (MS > PI) then it means that you have gained sales from another competitor who stocked out or has a poor distribution.