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FORECASTING
Definition of Demand
forecasting
According to American Marketing
Association, Demand forecasting is an
estimate of sales in rupees or physical
units for a specified future period under a
proposed marketing plan.
It is the tool to scientifically predict the
likely demand of a product in the future.
Specifying
the Objective
Determining the time Perspective and
type of good
Selecting a proper method of forecasting
Collection of data
Interpretation of results
Forecasting Horizons.
Short Term (0 to 3 months): for inventory
management and scheduling.
Medium Term (3 months to 2 years): for
production planning, purchasing, and
distribution.
Long Term (2 years and more): for
capacity planning, facility location, and
strategic planning.
METHODS OF DEMAND
FORECASTING
SURVEY METHODS
SURVEY METHOS
CONSUMER
SURVEY METHODS
OPINION METHODS
COMPLETE
SAMPLE
TEST MARKETIN
END USE
EXPERTS OPINION
ENUMERATION
SURVEY METHOD
METHOD
METHOD
METHOD
METHOD
DELPHI METHOD
STATISTICAL
METHODS
TRENDPROJECTION
REGRESSION
METHODS
BAROMETRIC
METHOD
Delphi Method
Delphi method
Advantages
1.
Facilitates the maintenance of anonymity of the respondents
identity throughout the course.
2.
Saves time and other resources in approaching a large number
of experts for their views.
Limitations/presumptions:
3.
Panelists must be rich in their expertise, possess wide
knowledge and experience of the subject .
4.
Presupposes that its conductors are objective in their job,
possess ample abilities to conceptualize the problems for
discussion, generate considerable thinking, stimulate dialogue
among panelists and make inferential analysis of the
multitudinal views of the participants.
Market Simulation
Firms may create an artificial market in
which the consumers are instructed to
shop with money.
This kind of laboratory experiment can
be useful in ascertaining consumers
reactions to changes in price, packaging,
and even location of the product in the
shop.
Test Marketing:
In this method the product is actually sold
in certain segments of the market,
regarded as the test market.
It is considered less risky than launching
the product across a wide region
Trend Projection
TREND ANALYSIS
METHOD
THIS
METHOD IS USED
WHEN A DETAILED
ESTIMATE HAS TO BE MADE
TIME PLAYS AN IMPORTANT
ROLE IN THIS METHOD