Sales Forecasting & Market Potential: Best Practices in India

Abstract

The sales forecast is one of the most important of a business plan. ’Market potential' is nothing but a quantitative estimate of the total possible sales by all the firms selling the product in a given market. Sales forecasting is essential in business, and sales forecasting is the major factor of success in business. There are many advantages of sales forecasting, and more accurate sales forecasting means more scope of success in your business. Forecasting helps in reducing inventory and to schedule customers' orders. Accurate sales forecasting is very helpful in planning of plant procurement and for cutting the cost. Sales forecasting also helps in prediction of revenue, hence it is necessary to understand accurately the sales forecasting. There are many factors that affect sales forecasting and need to understand these factors before doing sales forecasting. In the preparation of a comprehensive marketing plan, sales forecasts help the marketer develop a marketing budget, allocate marketing resources, and monitor the competition and the product environment. The sales forecast is a prediction of a business's unit and dollars sales for some future period of time, up to several years or more. These forecasts are generally based primarily on recent sales trends, competitive developments, and economic trends in the industry, region, and/or nation in which the organization conducts business. Sales forecasting is management's primary tool for predicting the volume of attainable sales. Therefore, the whole budget process hinges on an accurate, timely sales forecast.