1. Sports & Entertainment Marketing II
4.05d Forecasting sales for a marketing plan.

2. BR Define the following terms:
Sales forecast
Top-down approach
Bottom-up approach
Jury of executive opinion
Delphi technique
Sales force composite
Survey of buyer intentions

3. Sales Forecast
Prediction of what a firm’s sales will be during a specific future time period
Can be short term, intermediate, or long term in nature
Forecasts help determine…
How much to buy
What new items to offer
How many workers are needed
What prices to charge
Whether promotion is needed

4. Top-Down Approach Also known as the breakdown approach
Prepared for the company as a whole
Forecast is broken down into forecasts for specific products, salespeople, territories, product lines, departments, etc.

5. Bottom Down Approach Also known as the build-up approach
Prepared by starting with separate forecasts for specific products, salespeople, territories, etc.
Then, individual forecasts are combined into a forecast for the entire company

6. Forecasting Quantitative Forecasting Qualitative Forecasting
Based on the results of gathering and analyzing all kinds of numerical market data
Economic trends, population changes, consumer spending, industry forecasts, etc.
Qualitative Forecasting
Based on expert opinion or personal experience
Predictions based on what they have seen in the past as well as current economic observations

7. Jury of Executive Opinion
Advantages
Based on reliable, inside opinion
Quick and easy to use
Disadvantages
Results depend on executive’s skill
Predictions carry equal weight  problem if predictions are not as relevant/accurate as others

8. Delphi Method Predictions are made secretly and then averaged together
Results of the first poll are sent to the experts who respond with a second opinion
Process is repeated until a very narrow, firm median is agreed upon

9. Delphi Method Advantages
Can prevent social pressure
Can prevent forceful individuals from dominating others
Can prevent time-consuming discussions or arguments
Can gather opinions from those who won’t speak out in groups

10. Delphi Method Disadvantages
Takes a lot of time to complete multiple rounds of the process
Can be expensive

11. Sales Force Advantages
Accurate forecasts for individual products
Higher sales totals
Inexpensive to use
Provides detailed information

12. Sales Force Disadvantages
Lacks a long-range view
Sales force resentment due to having to take time away from selling to prepare sales forecasts
Forecasts that benefit sales force

13. Survey of Buyer Intentions Advantages
Reasonably accurate forecasts
Easy to control costs
Outside information available

14. Steps to Prepare Sales Forecasts
Gather the data that you will use.
Determine the amount by which your sales increased or decreased last year.
Determine the percent increase/decrease.
Add outside predictions of increases in sales for your area.
Subtract outside predictions in sales from negative economic forecasts, reductions in population, increased competition, etc.
Convert your final forecast percentage into a dollar figure.

15. Example #1 Sales from last year: $105,000
Sales from two years ago: $100,000
Other data:
Economy is expected to grow by 2% in the coming year.
Number of consumers in your area is expected to increase by 5%.
A new competitor is expected to reduce your sales by 5%.