Factors Affecting Sales Forecasting
Sales forecasting is the keystone or core of marketing management. It attempts to determine the volume of sales which can reasonably be expected in the future on a scientific basis. Sales forecasting is the intellectual act of estimating sales of products in due course of time
The following are Factors Affecting Sales Forecasting
1. Economic Conditions
The general economic conditions prevailing in the country have a considerable impact on the sales forecast of the company. The price level, national income, profit rates, interest rates, and rental rates all help to decide the first market potential and later the sales forecast.
2. Business Conditions
The economic conditions regarding the same industry or trade and hence business. There are related to factors such as a taxation policy of a government, developmental strategies adopted in state and national plans, public opinion, and credit lending policies these factors help to find out the company’s share in the market and forecast sales.
3. Internal Conditions
This refers to the policies and strategies adopted by the firm/company to safeguard its interests. Internal conditions are regarding the policies in production, distribution, finance, personnel, promotion, quality, and price areas. These internal conditions are controllable and help us to introduce change in the marketing mix.
4. Sociological Conditions
The sales forecast of the company affects the sociological conditions. These demographic conditions are population size, density, change in age groups, birth & death rate, size of a family, level of education, and family income location occupies an important place because rural and urban consumption habits are different.
5. Psychological Conditions
These conditions persist in society far more times than social conditions. Every human being is a social being. There are changes in the nature of markets which is reflected in changing habits, attitudes, perception, and learning.
6. Competitive Conditions
It makes every participant improve upon his rivals for survival and success. The competitive conditions within the industry change continuously. The size of operations, technical competence, and quality improvement all decide the success rate of any organization.
