Sales Forecasting Flashcards
Past records
Same months from previous years
History not equal to future
Sales forecasting
Process of predicting what a future firm’s sales will be based on past figures
Time Series Analysis
A quantitative sales forecasting method that predicts future sales levels from past sales data…
Trend
The visible pattern noted after imputting the past sales data. It may indicate the rise and the fall of sales over a given period of time
Cyclical Fluctuations
Recurrent fluctuations in sales revenue linked to the business cycle
Random Fluctuations
Unpredictable and errates fluctuations in sales revenue, caused by irregular factors
Moving Average (Advantages)
- Increases efficiency on production (you have an estimate of how much you must produce)
- Helps cash Flow Forecast & management (can adjust costs)
Moving Averages Disadvantages
- Taking it too literal & not adjusting might have negative consequences
- Doesn’t predict unforseen external, past, factos
Extrapolation
An extension of a trend line to predict future sales
Variation
Differences between actual sales and trend values
Sales Forecasting Benefits
- increased efficiency production
- increased awareness to adjust marketing strategies
- improve cashflow management
- forecasting costs and profits derive from forecasting sales
Sales forecasting Limitations
- PEST factors limit forecasting accuracy
- Higher innacuracy into the future
- changes in cost may affect prices
- uncertain future demand
Market research
Process of colleecting, recording and analyzing data about customers, competitors and the market (can be quantitative and qualitative)
NPD PROCESS
- Identify customers needs and tastes
- Product idea and packaging design
- Brand positioning and advertising testing
- Product launch and after launch period
Marketing Research Process (-)
- Primary and secondary research into costumers needs and competition
- Testing of product and packaging with consumer/focus groups
- pre-testing of the product image
- monitoring of sales and consumers response
