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Presentation on theme: "CH:6 MARKET SEGMENTATION METHODS OF SALES FORECASTING."— Presentation transcript:


2 MARKET FACTOR An item or element that 1)exists in a market 2)is measurable 3)is related to the demand for a product or a service The number of cars three years old and older is a market factor related to the demand for replacement tires. It is a market factor because the number of replacement tires that can be sold changes as the number of older cars changes.

3 Methods of Sales Forecasting Market-Factor Analysis Market-Factor Analysis Survey of Buyer Intentions Survey of Buyer Intentions Sales-Force Composite Sales-Force Composite Executive Judgment Executive Judgment Test Marketing Test Marketing Past Sales and Trend Analysis Past Sales and Trend Analysis

4 Methods of Sales Forecasting Market Factor Analysis: In many situations, future demand for a product is related to the behavior of certain market factors. When this is true, we can forecast future sales by studying the behavior of these market factors. Basically, market-factor analysis entails determining what these factors are and then measuring their relationship to sales activity. Using market factor analysis successfully requires the analyst 1) select the best market factors and 2) minimize the number of market factors. The best factors are ones that vary in a consistent way with the demand for the product being forecast.

5 Survey of Buyer Intentions Involves asking a sample of current or potential customers how much of a particular product they would buy at a given price during a specified future period. Test marketing A firm markets a new product in a limited geographic area, measures sales, and then –from this sample- projects the products sales over a larger area. Past sales and Trend Analysis Forecasting which is based on entirely past sales. The demand forecast is simply a flat percentage change applied to the volume achieved last year or to the average volume of the past few years.

6 Trend analysis examines past sales data to calculate the rate of change in sales volume and uses it to forecast future sales. Sales Force Composite Consist of collecting from all sales people estimates of sales for their territories during the future period of interest. The total of all these estimates is the companys sales forecast. Executive Judgement A method of sales forecasting that consists of obtaining opinions regarding future sales volume from one or more executives.

7 Delphi Method A forecasting technique in which a group of experts individually or anonymously assesses future sales, after which each member has the chance to offer a revised assessment as the group moves toward a consensus.


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