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Ans. À
 


Sales forecasting can be explained as the prediction of the future sales of a particular product
over a specific period of time based on past performance of the product, consumer spending
patterns, inflation rates, market trends, unemployment, and interest rates. From this you, may
very rightfully say that sales forecasts help the marketer to develop a marketing budget, allocate
marketing resources, and monitor the competition and the product environment.

À  
À
 


You should adopt following steps while forecasting sales:

· Defining the objectives to be achieved.

· Dividing various products into homogeneous groups.

· Analysing the importance of various factors to be studied for sales forecasting.

· Selecting the method.

· Collecting and analysing the related information.

· Drawing conclusions from the analysis made.

· Implementing the decisions taken.

· Reviewing and revising the sales forecasting from time to time.


À
 

 




The role of marketing research in sales forecasting has increased due to demand seasonality. The
immortal law of marketing is dead. For à
à, marketers of Woodland shoes and casual wear
are now pulling up their socks to bring up demands during the lean months. Across a range of
markets±televisions, refrigerators, footwear, garments, paints etc., companies are increasingly
latching onto a new truth±consumers are no longer buying during specific seasons in the year. As
a result, footwear sales in lean months is 40 per cent of sales, up from 25 per cent in the early
nineties.

Refrigerator sales too have come out of cold storage during the lean months. So why is demand
seasonality gradually disappearing from Indian markets. It is surprising then to see that even
though consumer-buying is changing track, marketers are largely in a wait-and-watch mode.

In many categories like black and white TVs, mopeds, cassette recorders, nearly 50 per cent of
the sales occur in rural markets. Yet, companies did not have any distribution network to reach
out to these exterior markets. Most of the sales would happen at the end of the harvest season in
local markets or annual fairs organized by companies.

Since harvesting was a once-a-year event, rural folks would undertake big purchases only around
that time. So it did not make any sense to set up elaborate retail networking throughout the year.
It was a highly seasonal economy. With rural income accounting for 70 per cent of the total
national income, it was not surprising that seasonality was a strong factor.

But that is changing now. Gradually, there has been a shift from one crop to two crop agriculture.
So there are two income streams within the year now. As a result buying is also gradually
happening throughout the year as per a study conducted by the Centre for Media Studies.

How can companies benefit from the changing cycle of season? To take an à
à, consumer
durable marketers estimate that anything between three to five per cent of the retail price of a
unit can be saved if the sales are spread evenly throughout the year.

To ensure that these benefits accrue, they can make three fundamental changes. One, have
specific products for the off season; two, optimise media spends during the lean months and
three, extend distribution to seasonal markets.

À
 
 

An organisation can suffer huge losses due to faulty sales forecasting. Faulty sales forecast may
arise due to incorrect information or faulty reasoning. But sales forecasting done on scientific
lines proves very useful. The following are the specific tools which are used for sales:

· Barometer

· Indicators

· Economic model

· Correlations and Regression


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Ans. ¦

  


Like research suppliers, clients (or users) also have a number of ethical dos and don¶ts. Some of
the more common client problems are requesting bids when a supplier has been predetermined,
requesting bids to obtain free advice and methodology, making false promises, and issuing
unauthorized RFPs.

Ôàà
 à

 à
 àà
ààà
à It is not uncommon for a client to
prefer one research supplier over another. Such a preference may be due to a good working
relationship, cost considerations, ability to make deadlines, friendship, or quality of the research
staff. Having a preference per se is not unethical. It is unethical, however, to predetermine which
supplier will receive a contract and yet ask for proposals from other suppliers to satisfy corporate
requirements. Requiring time, effort, and money from firms that have no opportunity to win the
contract is very unfair. Why more than a single RFP? Some corporations require more than one
bid.

Ôàà
  

àà à

à Client companies seeking bargain
basement prices have been known to solicit detailed proposals, including complete methodology
and a sample questionnaire, from a number of suppliers. After ³picking the brains´ of the
suppliers, the client assembles a questionnaire and then contracts directly with field services to
gather the data. A variation of this tactic is to go to the cheapest supplier with the client¶s own
proposal, derived by taking the best ideas from the other proposals. The client then attempts to
get the supplier to conduct the more elaborate study at the lower price.




à à Another technique used by unethical clients to lower their research
costs is to hold out a nonexistent carrot. For example, a client might say, ³I don¶t want to
promise anything, but we are planning a major stream of research in this area, and if you will
give us a good price on this first study, we will make it up to you on the next one.´
Unfortunately, the next one never comes ± or if it does, the same line is used on another
unsuspecting supplier.

Ôàà

  
 
In each of the following situations, a client
representative sought proposals without first receiving the authority to allocate the funds to
implement them:

· A client representative decided to ask for proposals and then go to management to find out
whether she could get the funds to carry them out.

· A highly regarded employee made a proposal to management on the need for marketing
research in a given area. Although managers were not too enthused about the idea, they told the
researcher to seek bids so as not to dampen his interest or miss a potentially (but, in their view,
highly unlikely) good idea.
· A client representative and her management had different ideas on what the problem was and
how it should be solved. The research supplier was not informed of the management view, and
even though the proposal met the representative¶s requirements, management rejected it out of
hand.

· Without consulting with the sales department, a client representative asked for a proposal on
analyzing present sales performance. Through fear of negative feedback, corporate politics, or
lack of understanding of marketing research, the sales department blocked implementation of the
proposal.



À
 


Marketing research field services are the production arm of the research industry requiring
telephone or face-to-face interviews. They are the critical link between the respondent and the
research supplier. It is imperative that they properly record information and carefully follow
sampling plans. Otherwise, even the best research design will produce invalid information
(garbage in; garbage out). Maintaining high ethical standards will aid a field service in procuring
good raw data for the research firm.

X
à 

Ôà
à
 The problem of professional respondents arises most often in
the recruitment of focus group participants. Virtually all field services maintain a database of
people willing to participate in qualitative discussion groups, along with a list of their
demographic characteristics. Maintaining such a list is good business and quite ethical. When
qualifications for group participants are easy (for example, pet owners, persons who drive
SUVs), there is little temptation to use professional respondents. However, when a supplier
wants, for example, persons who are heavy users of Oxydol detergent or who own a Russian
Blue cat, it is not unheard of for a group recruiter to call a professional respondent and say, ³I
can get you into a group tomorrow with a $75 respondent fee and all you need to say is that you
own a Russian Blue cat.´

In an attempt to weed out professional respondents, a research supplier may specify that the
participant must not have been a member of a qualitative discussion group within the past 6
months. However, dishonest field services will simply tell the professional respondent to deny
having participated in a group within the past 6 months.
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The professional marketing research report must achieve four primary objectives:

· To effectively communicate the findings of the marketing research project,

· To provide interpretations of those findings in the form of sound and logical recommendations,

· To illustrate the credibility of the research project,

· To serve as a future reference document for strategic or tactical decisions.

The first and foremost objective of the research report is to effectively communicate the findings
of the marketing research project. Since the primary purpose of the research project was to obtain
information that will answer specific questions in relation to a specific business problem, the
report must explain both how the information was obtained and what relevance it has to the
research questions. Best practices suggest that a detailed description of the following factors be
communicated to the client:

· The specific research objectives.

· The specific research questions the study was to answer.

· Specific procedural information relevant to the collection of secondary data (if necessary).

· A description of the research methods employed.

· Findings displayed in tables, graphs, or charts.

· An accurate interpretation and summation of the findings.

· Conclusions based on data analysis.

· Recommendations and suggestions for their implementation.

Far too often, the researcher is so concerned about communicating results that he or she forgets
to provide a clear, logical interpretation of those results. The researcher must always be aware
that his or her level of understanding regarding sampling methods and statistics, for example,
may not be the same as that of the user. Therefore, the researcher must always attempt to take
technical or complex information and present it in a manner that is understandable to all parties
concerned. Most researchers are often fully armed with statistics, computer output,
questionnaires, and other project-related material. In presenting such information to the client,
the researcher should always rely on the original research objectives. The task is to focus on each
objective and communicate how each part of the project is related to the accomplishment of that
objective.

A critical dimension of the research report is to establish credibility of the research methods,
findings, and conclusions. This can be accomplished only if the report is accurate, believable,
and professionally organized. These three dimensions cannot be treated separately, for they
collectively operate to build credibility into the research document. For the report to be accurate,
all of the input must be accurate. No degree of carelessness in handling data, reporting statistics,
or phasing outcomes must be tolerated. Errors in mathematical calculations, grammatical errors,
and incorrect terminology are just a few types of inaccuracy that can serve to diminish the
credibility of the entire report.

c

  

Before communicating the results of the project to the manager, the researcher should keep
several issues in mind for effective communication. The first and foremost rule for writing the
report is to empathize. The researcher must keep in mind that the manager who is going to read
and utilize the findings of the research project might not be as technically knowledgeable with
statistical techniques or at times with the methodology. Furthermore, the manager will be more
interested in knowing how results can be used for decision making rather than how they have
been derived. Therefore, the jargons and technical terms should be kept at minimum. If the
jargons cannot be avoided, then researcher should provide a brief explanation for the manager to
understand it.




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 ¦ À


   À

À


SPSS is the data analysis package of choice for people wanting to analyze quantitative data.
However, most researchers find dealing with quantitative data quite daunting. Although most
researchers are quite comfortable with qualitative research methods and analyses, they tend to
shy away from using quantitative statistics. However, the ability to perform quantitative data
analysis is increasingly becoming an important skill for researchers to possess. Actually most
people¶s fear of statistics is unfounded. The advent of computer software programmes such as
SPSS that can be used to analyze data, has meant that people do not have to know or learn
mathematical formulae in order to be able to perform quantitative statistical analyses. Nowadays,
all one needs to know is the appropriate analyses to perform on their data and how to do it so
they can obtain the information they need to know.

Knowledge of SPSS is useful because:

· SPSS is a leader in the field of market research and social surveys

· It has been in the forefront of these fields for over 40 years

· It is a very powerful piece of software that will enable you to carry out quantitative analysis in
seconds

· You can legitimately see it as an extension or complement to Excel

· It is easier to use than other packages when it comes to handling large datasets

· It may help you get a job in the job market.

À


   À

À
 
 !"

SPSS is used by market researchers, health researchers, survey companies, government,

education researchers, marketing organizations and others. In addition to statistical analysis, data
management (case selection, file reshaping, creating derived data) and data documentation (a
metadata dictionary is stored with the data) are features of the base software.

The developers of the Statistical Package for the Social Sciences (SPSS) made every effort to
make the software easy to use. This prevents you from making mistakes or even forgetting
something. That¶s not to say it¶s impossible to do something wrong, but the SPSS software
works hard to keep you from running into the ditch. To foul things up, you almost have to work
at figuring out a way of doing something wrong.
You always begin by defining a set of —
  and then you enter data for the variables to
create a number of   For example, if you are doing an analysis of automobiles, each car in
your study would be a case. The variables that define the cases could be things such as the year
of manufacture, horsepower, and cubic inches of displacement. Each car in the study is defined
as a single case, and each case is defined as a set of values assigned to the collection of variables.
Every case has a value for each variable. (Well, you can have a missing value, but that¶s a
special situation described later.)

Variables have types. That is, each variable is defined as containing a specific kind of number.
For example, a   variable is a numeric measurement, such as weight or miles per gallon. A


  variable contains values that define a category; for example, a variable named  

could be a categorical variable defined to contain only values 1 for female and 2 for male. Things
that make sense for one type of variable don¶t necessarily make sense for another. For example,
it makes sense to calculate the average miles per gallon, but not the average gender.


c 
 
  

 #   

 There are several basis on which hypothesis are classified:

a. Descriptive Hypothesis

b. Relation Hypothesis



  
 These by name implies describing some characteristics of an object, a
situation, an individual or even an organization.

á
à

1. Students from autonomous institutions are placed faster than other institutions.

2. Research and practice of educations system in our country is not integrated..

The above tells us the characteristics of some entity.




  
 In this case we describe relationship between two variables:

1. Why rich people shop at life style?

2. Rate of attrition is high in those Jobs where there is night shift working


à  This is a hypothesis framed in the early stages of research. These are
altered or modified as investigation proceeds.

á
à As of now ³demand and quality are related´. Later on this may not be the fact as
investigation proceeds.

4. à  This hypothesis states that there is no difference between the parameter and
the statistic that is being compared.

á
à There is no relationship between marks obtained in the examination and the success of
the same student in the corporate world. Null hypothesis are framed for testing statistical
significance. Null hypothesis is very exact.

5. 

 
à  Here relationship of analytical variable is found. These are used when
one would like to specify the relationship between changes in one property leading to change in
another.

á
à Income level related to number of children in the family or literacy related to number
of children in the family.
6. À
  
à  These are got from samples that are measurable. Statistical hypothesis
are of two types:

(a) Hypothesis which indicates differences

á
à There is a difference between the performance of students graduating from English
medium schools and those of others.

(b) Hypothesis which indicates association

á
à There is a perfect relationship between price and demand.

7. !
à
àà  They are based on what is being observed. (1) Junior students are
more disciplined than seniors
(2) Economically poor students work hard compared to those who come from well to do families
(3) Middle class families lead a humble living. The above are observed on a day to day basis
over a period of time before drawing any conclusions.

À  


  


1. Formulate the null hypothesis, with H0 and HA, the alternate hypothesis.

According to the given problem, H0 represents the value of some parameter of population.

2. Select on appropriate test assuming H0 to be true.

3. Calculate the value.

There are two types of tests.

$"

  "

  

A hypothesis test may be one-tailed or two-tailed. In one-tailed test the test-statistic for rejection
of null hypothesis falls only in one-tail of sampling distribution curve.

á
à In a right side test, the critical region lies entirely in the right tail of the sample
distribution. Whether the test is one-sided or two-sided ± depends on alternate hypothesis.
á
à A tyre company claims that mean life of its new tyre is 15,000 km. Now the
researcher formulates the hypothesis that tyre life is = 15,000 km.

A two-tailed test is one in which the test statistics leading to rejection of null hypothesis falls on
both tails of the sampling distribution curve as shown.

When we should apply a hypothesis test that is one-tailed or two-tailed depends on the nature of
the problem. One-tailed test is used when the researcher¶s interest is primarily on one side of the
issue.

á
à A product is manufactured by a semi-automatic machine. Now, assume that the same
product is manufactured by the fully automatic machine. This will be two-sided test, because the
null hypothesis is that "the two methods used for manufacturing the product do not differ
significantly".



It tells the researcher the number of elements that can be chosen freely.

á
à a + b/2 = 5. fix a = 3, b has to be 7. Therefore, the degree of freedom is 1.

À
   


If the hypothesis pertains to a larger sample (30 or more), the Z-test is used. When the sample is
small (less than 30), the T-test is used.

¦   Carry out computation.

 

 Accepting or rejecting of the null hypothesis depends on whether the computed
value falls in the region of rejection at a given level of significance.
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À 



The limitations of sampling are:

·  à
 In comparison to census technique the conclusions derived from sample are
more liable to error. Therefore, sampling technique is less accurate than the census technique.

· !

à
 X
 If the units in the field of survey are liable to change or if these are not
homogeneous, the sampling technique will be very hazardous. It is not scientific to extend the
conclusions derived from one set of sample to other sets which are dissimilar or are changeable.

·  à

!
 
 If due care is not taken in the selection of samples or if they are
arbitrarily selected, the conclusions derived from them will become misleading if extended to all
units. For example, in assessing the monthly expenditure of university students we select for
sample study only rich students, our results will be highly erroneous if extended to all students.

· ààÀà
 à"

àà The sample technique can be successful only if a competent
and able scientist makes the selection. If this is done by an average scientist, the selection is
liable to be wrong.

· à
À

 
 à Under certain circumstances it is very difficult to use the
sampling technique. If the time is very short and it is not possible to make selection of the
sample, the technique cannot be used. Besides, if we need 100% accuracy the sampling
technique cannot be used. It can also not be used if the material is of a heterogeneous nature.

¦   

&
À 


A good sample has following qualities:

· Ôààà

 à
à An ideal sample must be such that it represents adequately the whole
populations. We would select those units which have the same set of qualities and features as are
found in the whole data. It should not lack in any characteristic of the population.

· #
àà
à
à The second feature of a sample is independence, that is interchangeability of
units. Every unit should be available to be included in the sample.

· à
 The number of units included in a sample should be sufficient to enable derivation
of conclusions applicable to the whole population. A sample having 10% of the whole
population is generally adequate.

· $à
à  The units included in the sample must bear likeness with order units, otherwise
the sample will be unscientific.