Sales Forecasting

Sales Forecasting

Sales forecasting is a difficult area of management. Most managers believe they are good at forecasting. However, forecasts made usually turn out to be wrong!

Reasons for undertaking sales forecasts

Businesses are forced to look well ahead in order to plan their investments, launch new products, and decide when to close or withdraw products and so on. The sales forecasting process is a critical one for most businesses. Key decisions that are derived from a sales forecast include:

· Employment levels required

· Promotional mix

· Investment in production capacity Types of forecasting

There are two major types of forecasting, which can be broadly described as macro and micro:

Macro forecasting is concerned with forecasting markets in total. This is about determining the existing level of Market Demand and considering what will happen to market demand in the future.
Micro forecasting is concerned with detailed unit sales forecasts. This is about determining a product’s market share in a particular industry and considering what will happen to that market share in the future.