What is sales forecasting?
In general terms, forecasting means “A statement made about the future”. So, Sales forecasting is the estimation of sales made for the future. Sales forecast is an estimate of sales in rupees or in units for future period.
A sales forecast is the prediction of sales volume that a company can estimate to achieve in specified period of time in future.
Following are some of the definitions given by different scholars:
According to American marketing Association, “Sales forecast is an estimate of sales in dollars (Rupees in India) or physical units for a specified future period”. According to Matthew, Buzzles, Lovitt, 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’.
Factors Affecting Sales Forecasting:
The sales manager should be aware of all the business condition in a country may it economic, political or business conditions. The business conditions like population growth, government policies, fashion and style etc affect sales forecasting. The economic trends such as inflation, deflation or recession etc influence sales forecasting.
Changes within the firm
The conditions in the industry also influence sales forecasting. For example, shortage of raw materials, shortage of finance, etc disturb the firm’s activities and thus give rise to uncertainties in sales and production.
Internal conditions of business Enterprise
The internal conditions like pricing policy, advertising, promotion policy, selection of distribution channel etc also affect sales forecasting.
Taste of consumers
Different consumers have different taste. It may be any product like wearing apparel, vehicles, furniture etc. Sales depend on the size of consumers, gender, age, population etc.
Sales forecasting is also influenced on the basis of short run, medium run and long run forecast.
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