Sales Forecasting: Roles and Techniques

1
Sales Forecasting Roles and Techniques

• A) THE PAST
• Most firms have internal secondary data on which
  to draw (e.g. past sales figures, old market
  research etc.)
• It must be treated with caution as todays
  business environment changes so quickly.
• Back data should never be dismissed, but neither
  should it be accepted on face value.
• Back data is more likely to be useful if
• The market has not changed significantly.
• The data is placed in context.
• The managers use their intuition.
• B) THE PRESENT
• I.T. has improved the availability of up-to-date
  information (e.g. how goods are selling, where
  they are selling best, etc.).
• PED shows marketers the effect of price changes
  on demand see table p46 of Swift. It is
  important to realise values of elasticity are
  estimates which change over time.
• Market testing This is used not only for new
  products, but also to test developments in
  existing ones. To be useful, the test area must
  be representative of the products market.
• Findings from a test market are more likely to be
  useful if
• the test region is representative.
• the findings are accurately interpreted.
• it doesnt delay the launch or allow in a
  competitor

2
THE FUTURE Forecasting the future is vital,
however due to many variables it is by no means
an exact science. WHY? However, forecasts are
used as a basis for planning. By trying to
predict external variables, firms will at least
take account of them. The value of the forecasts
depend on the reliability on the data on which
its been based. Extrapolation projects past
trends forwards, this is only useful if
conditions havent changed greatly. (check out A
Summary of Market Planning p48 of Swift)