2.2.1 Sales forecasting

• What is a sales forecast?

  projection of future sales revenue thats often based on previous sales data
• What is the purpose of sales forecasts?

  to predict things with accuracy;

  1. future sales

  2. effect of promotions on sales

  3. possible changes in size of market

  4. the way sales fluctuate @ diff times of year
• What factors affect sales forecasts?


  1. consumer trends

  
  

  2. economic variables

  
  

  3. actions of competitors (hard to predict)
• What are consumer trends?


  behaviours of consumers that determine G&S they buy
• What are economic variables?

  measures within economy which have effects on business & consumers
• What are some economic variables?

  1. economic growth

  2. inflation

  3. unemployment
• What is economic growth?

  rise in output of economy as measured by growth in GDP
• What are consumer incomes?

  amount of income remaining after taxes & expenses have been deducted from wages
• What are the difficulties of sales forecasting?


  1. volatile consumer tastes & preferences

  
  

  2.. significant changes in market share eg. new entrants

  
  

  3. new business so it is difficult to forecast