REFERENCE:

ANALOGY

Assumes that demand for a product develops in much the same way in all countries as comparable economic development occurs in each country Relationship must be established between the item to be estimated and a measurable variable in a country that is to serve as the basis for the analogy Analogy is made between known situation and the country in question

Example: For example, suppose a company wanted to estimate the market growth potential for a beverage in country X, for which it had inadequate sales figures, but the company had excellent beverage data for neighboring country Y. In country Y, per capital consumption is known to increase at a predictable ratio as per capital gross domestic product (GDP) increases. If per capita GDP is known for country X, per capital consumption for the beverage can be estimated using the relationships established in country Y.

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