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Amardeep Kaur

Sales forecasting is predicting the future demand for a company s product for some specific future time period.
Projection of achievable sales revenue, based on historical sales data, analysis of market surveys and trends, and salespersons' estimates.

Amardeep Kaur

Accurate Sales Forecast affects not only sales department but also Manufacturing / Production Finance Human Resource And other functions of the organization.

Amardeep Kaur

Planning and Forecasting production (Capacity Planning) Acquiring Inputs (Labor, raw Material & capital) Manpower planning Making Provisions for finances Planning promotional activities Determine expected return on investment

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PRODUCT LEVEL
TYPES OF SALES FORECAST

TIME PERIOD

GEOGRAPHIC AREA

Amardeep Kaur

Qualitative Methods
1. 2. 3. 4. Experts Opinion Survey of buyers Expectations Sales Force Composite Delphi Technique

Quantitative Methods
5. Test Marketing 6. Nave Method 7. Exponential Smoothing 8. Trend Method 9. Moving Average 10. Regression Analysis
Amardeep Kaur

ADVANTAGES
Simple, quick and easy Technique Comparatively Less expensive

DISADVANTAGES
Unscientific Subjective Difficult to break down the forecast to sub units

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ADVANTAGES
Objective forecast Useful for new products Both long term & short term forecasting is possible

DISADVANTAGES
Difficulty in getting a panel of experts Longer time for getting consensus Breakdown of forecasts is difficult

Amardeep Kaur

ADVANTAGES
Sales force have better insight into sales trends Break down of forecast into sub unit possible

DISADVANTAGES
Sales person may tend to act bias They are not trained for forecasting Ignorance about wider economic trends

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ADVANTAGES
Reliable method May also provide for reason of purchase of consumers

DISADVANTAGES
Buyers may be unwilling to reveal their plan Biasness on part of buyers Expensive and time consuming

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ADVANTAGES
Useful for forecasting sales of new or modified products Reduces the risk involved in large scale product launch

DISDVANTAGES
If Re-purchase period is long for the product, the sales forecast may not give good results.

Amardeep Kaur

ADVANTAGES
High forecasting accuracy Objective method

DISADVANTAGES
Technically Complex Can be expensive and time consuming Use of computer and software packages are essential.

Amardeep Kaur

ADVANTAGES
Simple to use Easy to calculate Widely used for short and medium term forecast

DISADVANTAGES
Unable to predict a downturn or upturn in the market Not suitable for long term sales forecast Historical data is needed

Amardeep Kaur

ADVANTAGES
Simple to operate Forecaster s knowledge can be used in forecast Useful when sales data have trend or seasonal pattern

DISADVANTAGES
Smoothing constant is somewhat arbitrary Long term and new product forecasting are not possible.

Amardeep Kaur

ADVANTAGES
Simple to calculate Requires less data Accuracy is good for short term forecast

DISADVANTAGES
Not suitable for long term forecast Not suitable for new products and new markets Accuracy of sales forecast is less, if past sales fluctuate considerably.

Amardeep Kaur

ADVANTAGES
Simple method Reasonably accurate forecast Quick and inexpensive

DISADVANTAGES
Can be used only when past data is available It is not necessary that past trends continue to hold good in future also Does not consider any possible casual relationship underlying the variables forecasted

Amardeep Kaur

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A sales territory consists of existing and potential customers assigned to a salesperson.


The territory may or may not have any geographic boundaries.

Amardeep Kaur

Increase Market or Customer Coverage Control Selling Expenses Better Evaluation of Sales Force Performance Improve Customer Relations Increase sales force effectiveness Improve Co ordination Win-Win situation both for salespeople & the Company

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Small Company with few sales people, Selling in local market When sale is made through personal contacts and references

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Select a Control Unit

Find location & potential of customers

Use Build-up Method Decide Basic Territories Use Breakdown Method

Amardeep Kaur

THANK YOU
Amardeep Kaur