Abstract
This paper explores seven published articles that talk about the importance of making an accurate Sales Forecasting. This paper will answer how Sales Forecasting helps business people or others because it tells the seller the future trends of what people in general like, and the sellers can know what their customers want. Therefore, the seller and company owner can create a bright and reasonable plan for sales. All the business people require to learn Sales Forecasting for establishing a company or sales goods. Mentzer (2005) and Moon (2005), Moskowitz (2007), Gofman (2007), Hyedima (2018) say that data is hard to collect, but Sales Forecasting can easily collect data and show the information to the company. Other authors provide Sales Forecasting background information. This paper continues researching the function of Sales Forecasting and how Sales Forecasting applies to daily life. Learning Sales Forecasting, no matter business students or other people, is a advantageous decision.
How to Make Sales Forecasting More Accurate
Currently, there is an increasing number of people in the business field who want to earn a lot of money. For business students, there are so many essential sections that they need to cover. Sales Forecasting is the most basic knowledge they need to know before they establish a company or study for business courses. The most significant point that people have to learn about Sales Forecasting is that Sales Forecasting can affect companies' plans, budgets, and the money that they earn for each quarter. In order to become successful, business owners need to have the skills of Sales Forecasting.
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The Sales Forecasting is estimating all the products or the number of the products' money they can earn in a period. Although Sales Forecasting is crucial, to reach a high quality of Sales Forecasting is not easy. Before using Sales Forecasting, people should choose the most proper way to estimate. Business owners must learn about what Sales Forecasting effects and what factors that Sales Forecasting cause is essential. This paper will explicate two elements that create an accurate Sales Forecasting, two reasons why Sales Forecasting makes business earn more money and future trend in business, and how Sales Forecasting stops people from being overtaken by future changes, and also it provides value of being proactive.
Making Accurate Sales Forecasts
Why is it so crucial to make an accurate Sales Forecasting? Sales Forecasting works for any company, no matter the size of the company and the members of the company. Sales Forecasting is an estimation of how much money a company earns in a specific time or how many goods a company sells to their customers in a period. To make a Sales Forecast, people should learn how it works, consider all the factors that the company may face in the future. The function of Sales Forecasting is Sales Forecasting can encourage sales members and give them a goal to sell products, and companies can use Sales Forecasting to arrange how many products should be produced and prevent overstocked commodities. The several elements of how to make Sales Forecasting more accurate are outcome factors and internal factors.
In ancient time, people built a small village as a tribe with their friends and family members. Sometimes, they would be invaded by other tribespeople. People called it outcome factors. In the Sales Forecasting, people who want to make Sales Forecasting more accurate have to consider outcome factors. Demand trend, economic change, horizontal competition trend, and the government and customers spending trend are counted as outcome factors. The most critical element under the outcome factors is the demand trend. The demand trend is what is the mainstream of current society is, like fashion or politics, what the hobby of the people is, in general, like and mobile population in the contemporary community. Hyedima (2018) points out that learning what kind of hobbies of the people in general like is essential. The company provides a service that listens to what customers want and follows their ideas to create a product that fits them. To ensure this service, the company owners should learn what the leading fashion stream of current society is and present multiple suggestions to their customers. The company also needs to know about how many residents in every region, which helps companies to create a statistic graphic, where can they can build a store, and where has the largest population is. Therefore, company supposes to collect marketing information of their customers and make sure the quality of their service and products. The second element is the change of economic. Economic factors can affect whether customers will purchase goods or not. For improving the accuracy of Sales Forecasting, an enterprise needs to focus on its products on the market and supplier information such as the quality of their manufacturers and factors. With the development of current technology, online shopping becomes a popular way of how customers buy goods. For making an accurate Sales Forecasting, people should concentrate on resource distribution and future development. The third element is a horizontal competition trend. Estimating correctly one’s strength as well as that of one’s opponent is a phase that the Chinese elderly speak often. How many goods that a company can sell are affected by their competitors because customers have more opportunities to buy goods that more approaching what they want. Some people consider the appearance of a product, while others may think about the performance of the product. It is necessary to know what different types of people that the opponent company targets, what prices the opponent company sets, and what service they provide. The last outcome element is the government and customer spending trend. Moskowitz and Gofman (2007) say that it is vital to catch up on the information, both with the people and the government. Sometimes, the government posts a new policy, or customers tell companies what they need can be used to make an accurate Sales Forecasting.
In ancient time, people battled another tribe because they would like to expand their land. Usually, there is a king who rules a land. The king would be worried about when two or more than two tribes fighting; they may take away his position. Therefore, the king of the land needs to figure out this circumstance, and people named this situation as an internal factor. Mentzer and Moon (2004) mention that Sales Forecasting is to provide relevant data to all the companies, no matter which field they are in, to make sure those companies can find out the potential problems that they are confronting now. There are four elements under the internal factors that are a marketing strategy, sales policy, sales members, and production status. Creating a sales strategy can identify the position of the goods. For example, Burberry is a luxury brand in marketing. They set a high price, which is only for the rich, and H&M sets their prices lower than Burberry because they would like to sell their products to students or people who do not have a vast amount of money. Sales strategy needs to consider how much money their company wants to earn and what kind of people they would like to target. Sales policy is viewed as a way how a customer pays and refunds. A company should provide many payment methods to their customers. Some people do not bring a credit card when they go shopping; therefore, shoppers should provide second payment methods for their customers. Sales members are also crucial for a company that sells more goods. Humans are emotional animals. When buying products, they are always affected by the service that the company provides. Sales members should be trained and make themselves look professional. As a result, customers can decide to buy their goods immediately. The last factor is making sure that the company has enough stocks for selling. If a company wants to face one hundred customers, but only prepare fifty goods, it is not appropriate.
In conclusion, the two critical elements of how to make accurate Sales Forecasting are considered inside factors and outside factors. Knowing what people want, economic change, competitors’ advantages and disadvantages, government orders, company strategy, selling policy, sales members training, and enough stocks are essential elements for making an accurate Sales Forecast. Making a good Sales Forecast is not only working in the business field, but it also provides a method for the people in general to learn the importance of learning information ahead and decide to deal with the problem that people may face.
How Sales Forecasting Helps People Gain More Money
The previous section talks about the Sales Forecasting helps sellers gain more money by learning this skill. How can a seller earn more money from their customers? Nowadays, the quality of human life is increasing. Many people are able to buy their goods, which makes them have a sense of satisfaction. From a seller’s perspective, they are confused how to sell goods to their customers and make their customers have a sense of happiness and pay for their goods. Therefore, the sellers need to learn Sales Forecasting before they sell goods to their customers. The two reasons of Sales Forecasting can help people gain more money are sellers need to learn about their customers what they want and sellers can see the trends of how people in general like.
Customers would like to pay for goods that are exactly the same as their imagination. A customer always focuses on goods prices, goods performance and goods practicality. Some people think the outlook of the goods should be pretty, while other people may think the best performances is more important than its appearance. Shipley (2019) points out that wanting to make an accurate Sales Forecast, people need to figure out customers what they want and what goods are suitable for themselves. Customers will pay money for goods, when thinking the goods is worth its prices. Those examples can present a fact that people’s perspective is different. Moskowitz and Gofman (2007) say that the most effective way of improving company’s profits is learning what their customers want. Learning what customers need, company can give a better service for their customers. When customers satisfy of what they gain from company, a company can obtain an unexpected benefit. If the customers satisfy, a company can open the marketing better and easier. When company has a stable group of customers, customers will be going to introduce products to other people. This is the best way how to advertise a company’s goods and it is the cheapest way to advertise. On the other hand, humans are an emotional animal. Many times, humans make a decision with their emotion. If the customers like the services that the company provides, the customers are willing to give the company a hand, when they have the resources. Therefore, sellers are supposed to learn about their customers’ ideas individually. The Sales Forecasting can teach a method of learning customers' mind.
Sellers can predict if the kinds of goods they are going to produce will appeal to people who buy them. In the business field, learning customers mind and making goods only for themselves is a correct method of earning money. However, an enterprise that wants to improve has to consider the people in general. According to Moskowitz and Gofman (2007), Sales Forecasting presents several methods of learning how sellers can learn to sell goods to more people and how sellers can predict future trends that customers would like to purchase. For example, Apple company always produces iPhones with different colors, storages, and function. The reasons why Apple does this is because they would like to cover all the people in general. Some people do not have enough money, so that those people may purchase a device with a lower storage. Some people do not like classic colors like black and white; therefore, they can buy green, yellow and blue as they like. In this way, the seller can earn money from learning general people’s ideas and produce a product corresponding to these people.
In conclusion, Sales Forecasting can help people gain more money by learning about what their customers want and about the trends that people in general like. Providing goods that customers want and producing goods that everyone can accept are the main ways that sellers can earn money from their customers. Learning Sales Forecasting and using this skill properly is a necessary skill to success.
How Sales Forecasting Works in The Marketing Planning Process
The earlier section mentioned that the people in business filed need to understand how the Sales Forecasting helps people to gain more money. Consumers can also gain enough money for themselves. Nowadays, many people are facing a big challenge that people who are in business will stagnate and be overtaken by the competition. There are increasing number of students who are graduating from the University, which means it will be difficult for them to find a job and earn money for themselves. Some people consider establishing a company or working with a mature company because they can earn a huge amount of money or a good salary. In this situation, Sales Forecasting shows its important meaning. The reasons of Sales Forecasting work in the marketing planning process are that Sales Forecasting can prevent people from being overtaken by changes in the future and it shows the value of being proactive.
Estimating correctly one's own strength as well as that of one's opponent will help people make decisions more carefully and cautiously. Modern businesses do not know how to create a new product and produce it. Most businesses are only changing one product’s appearance or improving it performances, but rarely people have noticed that they need to invent new products. It shows the importance of the Sales Forecasting. Mariotti and Glackin (2007) mention that Sales Forecasting is based on the full consideration of various factors in the future, which combined the sales performance of the enterprises, and it also uses a certain of analysis method to predict a Sales target. The ancient people usually went hunting small creatures for themselves as a family. This is the best way to gain food for survival. There were another group of ancient people who went hunting with more than two families because they could not kill a giant creature by a group. In that period, many people would think that each family would not obtain enough food for themselves. In fact, the second group of people gained more food than the previous family. This is similar to the business field. In order to survive, the company must master all the activities of the opponent companies or competitors in the marketing. For example, what kind of people is the competitors’ target market, and what prices the competitors set. The reason business people need to know this information ahead is because sales are heavily influenced by competitors. According to Hyeduma (2018), Sales Forecasting can provide an idea what inventors can make and give warning ahead for beneficial action. In 1999, nobody could imagine cell phone could be used as lighter, camera, and gaming system. The reason the people have touch screen cell phone is because of Steve Jobs. He was a successful businessman and inventor because he knew the Sales Forecasting, what kind of invention can fit people in the future, and what appeal more to people in order for them to purchase his inventions.
Being proactive is crucial for all the people no matter what their circumstances. Sometimes, people regret when they are doing something incorrectly. Therefore, knowing the information and its consequences will be necessary. Samsung’s profits fell to 56% in third quarter 2019 because of cell phone exploration scandal. Hyedima (2018) points out that people should be aware of the importance of accurate Sales Forecasting to different parts of the business field. Any pieces of problems can cause a huge problem. To prevent a company facing bankruptcy or scandal, businesses should use the knowledge of Sales Forecasting to learn about the information ahead. Therefore, businesses can gain a brighter future by learning about Sales Forecast.
To sum up, Sales Forecasting can prevent people from being overtaken by changing of the future development and provide more information for people to make a proper decision. Sales Forecasting can provide ideas to the manufacturers that products should be innovative and that inventors and companies should be careful when doing business. When learning Sales Forecasting, people can prevent a lot of problems that people usually do not focus on, and people who have had studied Sales Forecasting can make their company better.
Conclusion
In conclusion, this paper talks about how people make Sales Forecasting more accurate, how Sales Forecasting enacts in the marketing planning process, and how Sales Forecasting important to business people. This paper reports what outcome factors and internal factors are, the importance of learning what customers want and what future people in general like, and what the reasons for people will not be overtaken by learning Sales Forecasting are. The importance of making an accurate Sales Forecasting is by learning Sales Forecasting, and people can encourage their sales members to be positive, promote their sales members to sell more goods, and show the values of companies’ products. Enterprises can know the number of assets that they need to produce, which can prevent the goods overstock. Furthermore, companies can improve the quality of the products and make a proper schedule. Sales Forecasting can be seen as a system that inputs a piece of certain information when using this skill to convert to new information, which provides a company with the suggestion of what they should do. To know the target products, business people are going to sell or produce, collect, and to analyze information. This paper points out many advantages of learning Sales Forecasting and the consequences of not using Sales Forecasting. Therefore, people who learn Sales Forecasting can make their companies better. Future research on Sales Forecasting can investigate how Sales Forecasting can even better help both small and medium enterprises to become successful.
References
- Hyedima, A. (2018). Sales Forecasting System. Retrieved from https://narr.ng/jspui/handle/123456789/56.
- Mariotti, S., & Glackin, C. (2016). Entrepreneurship: starting and operating a small business. Boston: Pearson.
- Mentzer, J. T., & Bienstock, C. C. (1998). Sales forecasting management: understanding the techniques, systems, and management of the sales forecasting process. Thousand Oaks: Sage Publications.
- Mentzer, J. T., & Moon, M. A. (2005). Sales forecasting management: a demand management approach. Thousand Oaks, CA: Sage Publications.
- Moskowitz, H. R., & Gofman, A. (2007). Selling blue elephants: how to make great products that people want before they even know they want them. Upper Saddle River, NJ: Wharton School Publishing.
- Moon, M. A., Mentzer, J. T., & Smith, C. D. (2002, June 3). Conducting a sales forecasting audit. Retrieved from https://www.sciencedirect.com/science/article/pii/S0169207002000328.
- Shipley, L. (2019). How to Make Your Sales Forecasts More Accurate. Retrieved from https://hbr.org/2019/08/how-to-make-your-sales-forecasts-more-accurate.
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