Sales forecasting - Quantitative and Qualitative techniques of Sales forecasting

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Ssales forecasting.
According to Philip Kotler sales forecast is the expected level of company sales based on a
chosen marketing plan and assume marketing environment sales. Forecasting can be done for
a short term medium term or long term.
Short term forecasts: this type of forecasting is typically done for a period of three months but
does not exceed six months.
Medium term forecasts

medium term forecasting is usually done

for a period of more than six months but

does not exceed two years

it is highly done for one year and long

term forecasts planning and focus beyond

five years usually 10 years is referred

to as long-range planning and

forecasting at the national level

long-range planning is also called

perspective planning and can go up to 15

or 20 years methods of sales forecasting

sales forecasting methods can be broadly

classified into the following two

categories qualitative techniques and

quantitative techniques qualitative

techniques qualitative techniques

primarily involve judgments and are

subjective because they are based on the

personal assessment of sales managers

industry experts or consultants

qualitative techniques further include

five methods the first is expert opinion

or consensus method this approach

involves specialists or experts of a

specific field who meet and discuss

possible sales forecasts the Delfy

technique this technique is similar to

the previous method in that the

forecasting panel comprises specialists

or experts however the panel members do

not meet consumer survey method also

known as the market survey of research

method this method involves conducting a

sample survey among customers of a

product with respect to their brand

preference and their likelihood of

purchasing the product or brand during

the period for which forecasts are being

made this method requires a suitable

questionnaire to reflect appropriate

information the success of this approach

depends on three factors the sample size

the sampling pattern and questionnaire

design sales force estimate in this

approach estimates or forecasts are made

by the sales force of the company the

individual sales estimates are

and aggregated to arrive at company

forecasts this approach is also known as

the grassroots approach each salesperson

discusses his or her estimate with the

concerned area sales manager before

submitting it the sales manager or

senior sales manager then makes the

final forecast for the company sales

hierarchy estimate this method involves

the preparation of sales forecast by the

sales management team the estimates are

made at different levels of the sales

hierarchy starting from the territorial

salespeople to the corporate sales

manager this approach is also referred

to as the stepwise estimate quantitative

techniques quantitative techniques

primarily involve forecasting sales

using statistical or mathematical

methods these techniques are

predominantly based on time series

analysis and range from simple

extrapolation of past trends the most

sophisticated regression analysis and

computer modelers some of the

quantitative techniques are listed below

moving averages sales ratio methods

market share projection and regression

analysis types of sales quota at the

salesperson level quotas can be fixed in

a variety of ways the most common times

being listed below value of financial

quota in the value quota sales persons

and allocated quotas in terms of rupees

or the total value to be achieved by

them volume quota in the volume quotas

sales targets are assigned on the basis

of physical quantities of products a key

difference between value quota and

volume quota is that in the latter the

price factor is not considered activity

quota in activity quota selling

activities are combined with important

non selling activities and combination

quota in combination quota activity

quota is combined with volume quota of

value quota in this method points are

used as a common parameter to quantify

different quota indicators factors

determining the fixation of sales quota

the following factors determine the

fixation of sales quota total market

estimates territory potential sales

persons estimates past sales trends or

experiences level of competition sales

policies

and strategies let's look at some of the

examples of sales forecasting Himalaya

announced plans to bulk up distribution

and double sales by 2020 Himalaya drug

company that refuted herbal health and

personal care firm announced plans to

expand its distribution network across

verticals with an aim to double its

sales to rupees 4000 crore by 2020 the

company plans to expand its sales force

from its current strength of 2,000 to

about 7,000 the company which operates

in the personal care pharma baby health

animal health and wellness segments

plans to be present in 200 plus outlets

from the current count of 160 with

respect to its pharma business it aims

to cover more than 1.5 lakh doctors this

year further in the baby care segment it

intends to double its sales force for

800 to over 1,500

another example is Infosys revenue

forecast India's second largest IT

services company Infosys Limited beat

earnings estimates by posting a 16

percent increase in net profit in q4 of

fiscal year 2015-16 Infosys expects a

revenue increase of eleven point eight

to thirteen point eight percent in the

2016-17 fiscal year beginning April 1st

2016 in constant currency terms a

revenue is estimated to grow 11.5 to

13.5 percent which denotes a faster

growth rate than the industry average as

for the company moves to high margin

digital services businesses Infosys is

looking to generate a revenue of US

dollar 20 billion by 2020

which is more than double offers us the

9.5 billion revenue in 2015-16 stay

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