Some market dynamics include competitive activity, regulatory and legal issues, consumer trends, pricing trends, and even politics. As you watch this video, identify some dynamics in your market that may affect your sales forecast.
- You may think you've created an accurate sales forecast based on solid data and forecasting methods, but many things can happen in the marketplace, as well as inside your own company, that could affect your forecast. Let's look at those. First, you may be surprised by something your competitor does. What if they launch a nifty new product that's better than yours? Or perhaps they cut the price or run a special promotion on their existing products? Hey, that will affect your sales.
And the opposite could happen. What if your competitor has a product recall or other adverse event that takes their products off the market? Now it may seem like good news, but you and your colleagues need to adjust the forecast and react quickly. If you don't, you may run out of inventory because of the sudden boost in demand, and that might affect your loyal customers in a bad way. Your company's sales might also be affected by legal, regulatory or political changes.
Imagine you're in the food industry and the FDA announces a new regulation that restricts what you can sell? Hey, you need to adjust. Or imagine a political election result that would make your products more sellable. Once again, you need to account for it, so you're not surprised. Now perhaps the trickiest thing to deal with in forecasting is changes in consumer buying patterns. What if the next generation of consumers doesn't want your products and services like your steady customers have, or, perhaps, they want to buy them at a different rate than what you've experienced in the past? Here again, you'll need to adjust.
Changes in technology might affect your sales forecast. When a company like Apple announces they're dropping the 3.5 millimeter headphone jack or using the latest form of USB port, all the companies supporting these soon-to-be obsolete features better revise their sales forecasts. Things can also happen within your own company that might affect your sales forecast. Your company may change its overall commercial strategy, and that may hinder or help sales of the products you're responsible for.
Your marketing colleagues might decide to run a major advertising campaign or promotion of your products, and yep, you better be ready, and you need to make sure anyone else affected knows about it. Forecasting is tricky business, but a thorough understanding of the changes around you can only help you make the forecast more accurate.
- Understanding the sales forecasting process
- Defining your market category
- Understanding market dynamics
- Selecting a forecasting technique
- Using quantitative forecasting
- Understand moving averages
- Using qualitative forecasting
- Using estimates from customers, sales reps, and distributors
- Using a panel of experts