Demand forecasting refers to the prediction or estimation of a future situation under given constraints.
Demand Forecasting is the activity of estimating the quantity of a product or service that consumers will purchase. Demand forecasting involves techniques including both
informal methods, such as educated guesses, and quantitative methods, such as the use of historical sales data or current data from test markets. Demand forecasting may be used in making pricing decisions, in assessing future capacity requirements, or in making decisions on whether to enter a new market.
Pricing is one of the four Ps of the marketing mix. The other three aspects are
product, promotion, and place. It is also a key variable in microeconomic price
allocation theory. Price is the only revenue generating element amongst the 4ps,
the rest being cost centers. Pricing is the manual or automatic process of applying
prices to purchase and sales orders, based on factors such as: a fixed amount,
quantity break, promotion or sales campaign, specific vendor quote, priceprevailing on entry, shipment or invoice date, combination of multiple orders or lines, and many others. Automated systems require more setup and maintenance
but may prevent pricing errors.
A market entry strategy is the planned method of delivering goods orservices to a target market and distributing them there. When importing or exporting services, it refers to establishing and managing contracts in a foreign country.
NECESSITY FOR FORECASTING DEMAND
Often forecasting demand is confused with forecasting sales. But, failing to forecast demand ignores two important phenomena. There is a lot of debate in the demand planning literature as how to measure and represent historical demand, since the historical demand forms the basis of forecasting. Should we use the history of outbound shipments or customer orders or a combination of the two to proxy for demand.
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