Notes On Sales Forecasting:

Meaning and Definitions Of Sales Forecasting:

       Sales forecast is a prediction of expected sales for a specific period. It is an estimate of sales in terms of money or units for a specified future period.

Defined by the American Marketing Association:

       According to the American Marketing Association, "Sales forecasting is an estimate of sales in dollars or physical units for a specified period."

Defined by the Mathew, Buzzels, Lovit and Frank:

       According to Mathew, Buzzels, Lovit and Frank, "A sales forecast is an estimate of sales of a company's product that are expected to be achieved during a given future period in a given place."

       From the above discussion, it can be concluded that:

  1. Sales forecast is an estimate of sales for a specified period
  2. It is expressed in terms of money or units

       The estimate is based on two factors:

  1. Marketing Plan
  2. Economic and other factor.
Necessity or Usefulness Of Sales forecasting:

1. Production:

       It is on the basis of sales forecasting that producers adjust or readjust their production schedule and plan capacity.

2. Distribution:

       Distribution can be planned on the basis of sales forecasting. The producers can select their channel of distribution and the wholesalers and the retailers, or agent can plan their sales strategy on the basis of sales forecasting.

3. Advertising and Sales Promotion:

       Advertising and sales promotions are based on sales which are again planned on the basis of sales forecasting mechanism.

4. Personnel Department:

       The mechanism of sales forecasting is also necessary for personnel department. The number of sales executives, salesman and other staff of sales department can be increased or decreased as per sales forecasting.

5. Marketing Management:

       The necessity of sales forecasting in the field of marketing may be summarized as under:

  1. It helps in product mix decisions.
  2. It helps in making assessment of a proposed marketing program.
  3. It helps to decide whether to enter into a new market or not.