Sales Forecasting

Sales & Distribution

Session II
11th August 2008

1
 Industry Potential
 Industry Forecast
 Company Demand
 Company Potential
 Company Forecast

2
Relationships in Demand Forecasting
 Income of the potential buyer
 Price of the products
 Price of the substitute products
 Level of distribution
 Level of promotion
 Improvement in quality of product

3
 Process of forecasting
 Past trends
 Data search
 Judgement
 Competition Growth
 Industry growth
 Potential market
 SWOT of the company

4
 Indirect factors
 Service in case of electronic goods

5
 How do you determine demand
 Short term
 Chain Ratio Method
 Index of buying power method
 Medium to Long term
 Survey of buyer intention
 Survey of expert opinion
 Trend method
 Statistical method
 Test marketing
 End use method

6
 Chain Ratio Method
Estimate the demand of Cold Non alcoholic
beverages 
Population
Per capita personal discretionary income
Average percentage of PDI spent on
beverage
Per capita amount spent on cold beverages
Per capita amount spent on alcoholic
beverages
7
Index of buying power method
 Clarion & Hindusthan Thompson

 Buying Power Indices

 Based on number of indicators
 Income (Y)
 Expenditure on essential items (EI)
 Disposable income (DI)
 Expenses on Luxury (EL)
 Compare this with the actual sales figure to
arrive at the correction factor
8
 Survey of buyer intention
 Either by sample survey

 Or

 By actual survey

9
 Survey of expert openion
 Survey of Sales force
 Experts from Industry
 Experts from buyers themselves

10
 Trend Method
 Seasonal
 Cyclical
 Random effects

 Fit it into a distribution

11
 Statistical Method
 Relationships  Direct
 Correlation and Regression
 Relationships  Indirect
 Discriminant

12
Test marketing

13
 End Use Method
 Derivation of demand of paints from builders

14
 Practical Exercise

 No of territory
 Territory
 No of retail outlets
 Offtake from outlets
 Conversions
 Footfalls

15