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References

  1. ^ to make explicit the assumptions on which the forecast is based
  2. ^ Type your reference here.Example : Tanzania Mobile Phones Market
  3. ^ The second key to effective forecasting is to use multiple methods
  4. ^ Example : Gap Inc.
  5. ^ Contingency plans should be developed to cope with the reality that ultimately unfolds.[15]




Details


There are two important keys to improve the credibility and accuracy of forecasts of sales and market potential.

The first of these is[1] to make explicit the assumptions on which the forecast is based.
This way, if there is debate or doubt about the forecast, the assumptions can be debated, and data to support the assumptions can be obtained. The resulting conversation is far more useful than stating mere opinions about whether the forecast is too high or too low.

[2] Example : Tanzania Mobile Phones Market

For ACG, the combination of observational and survey forecasting methods enabled Maddy and Laguë to articulate the assumptions on which their revenue forecasts were based, and to support those assumptions with data. Their evidence-based forecast was instrumental in their obtaining US$3.5 million in start-up capital to get their venture off the ground.//[14]//

[3] The second key to effective forecasting is to use multiple methods.
When forecasts obtained by different methods converge near a common figure, greater confidence can be placed in that figure.

[4] Example : Gap Inc.

The procedure used at Gap Inc., to forecast next-year sales (see Exhibit 8.1) is an example of such an approach.

At international retailer Gap Inc., forecasting sales for the next year for each of its divisions – Gap, Banana Republic, and Old Navy – is an important process that drives a host of decisions, including how much merchandise to plan to buy for the coming year.

Both top-down and bottom-up approaches are used. At Old Navy, for example, each merchandiser generates a forecast of what level of sales his or her category – women’s knit tops, men’s jeans, and so on – can achieve for the next year. Group merchandise managers then provide their input and sum these numbers to create a total forecast from a merchandising perspective.
A second bottom-up forecast is generated by the store operations organisation, summing stores and groups of stores. Simultaneously, a top-down figure is prepared at headquarters in California, using macroeconomic data, corporate growth objectives, and other factors. The three forecasts are then compared, differences debated, and a final figure on which to base merchandise procurement and expense budgets is determined. Though the effort to prepare such a forecast is considerable, the broad involvement in the process helps to ensure both knowledgeable input to the forecast as well as subsequent commitment to ‘make the numbers.’ Most important, Old Navy finds that the different processes together with the ensuing discussion lead to substantially better forecasts.




Where forecasts obtained by multiple methods diverge, the assumptions inherent in each can be examined to determine which set of assumptions can best be trusted. Ultimately, however, any forecast is almost certainly wrong.

[5] Contingency plans should be developed to cope with the reality that ultimately unfolds.[15]







Tags
  1. client contact systems
  2. collector bias
  3. competitive advantage
  4. competitive intelligence
  5. computerised reorder system
  6. consumer behaviour
  7. data sources
  8. evidence based forecast
  9. experienced user
  10. internal records
  11. just in time
  12. logistical alliance
  13. market potential
  14. market segmentation
  15. market segments
  16. marketing program
  17. marketing research
  18. mass market
  19. mass market strategy
  20. michelin; us west;
  21. micro segmentation
  22. middleman
  23. modified rebuy
  24. multi-functional sales teams
  25. multilevel selling
  26. multiple buying
  27. multiple level relationships
  28. mutual trust
  29. narrow market segment
  30. narrow niche
  31. nationalisation of producers
  32. nerve center
  33. new task buy
  34. nine west group
  35. observation;direct observation' tanzania mobile;
  36. on-time delivery
  37. opportunity; research
  38. order handling
  39. organisation market
  40. organization marketing behaviour
  41. organizational behaviour
  42. organizational customers
  43. organizational demand
  44. organizational market
  45. organizational purchasing behaviour
  46. organizational purchasing process
  47. paperless exchange
  48. parity pricing
  49. personal selling
  50. personal use
  51. political risk
  52. potential market; penetrated market
  53. pre-delivery inspection
  54. pre-sale service
  55. prestige buyer
  56. pretender
  57. primary data
  58. procurement costs
  59. purchasing criteria
  60. qualitative data
  61. qualitative research
  62. quality assurance
  63. quality standards
  64. quantitative data
  65. quantitative research
  66. research objectives
  67. retention programme
  68. routine purchase
  69. sales forecast
  70. semantic differentiation scale
  71. sequence of information
  72. shared costs
  73. short term contracts
  74. social construction
  75. status oriented consumers
  76. stock availability
  77. straight rebuy
  78. supplier bargaining power
  79. supplier performance
  80. supplier reputation
  81. survey
  82. tabulation errors
  83. tanzania mobile
  84. target customers
  85. target market
  86. target marketing
  87. technical experts;
  88. test markets
  89. transaction cost
  90. trend forecasting
  91. trusting patron
  92. underlying consumer demand
  93. unethical demands
  94. unstated but implicit assumptions
  95. users
  96. value analysis
  97. value shopper
  98. vertical integration
  99. visceral thing that cannot be trained
  100. wild guess