Forecasting is often the cause of controversy. Some use this tool infrequently and very carefully, while others rely on it completely and do not make any important decisions without analysis. What is forecasting. Who needs it and what tools to use to find the “golden mean” for making plans? Let’s figure it out with “Exactly”.
Why make forecasts in business
Forecasting in marketing is the identification how to build phone number list of trends and tendencies in a constantly changing environment. It is the basis for building a marketing strategy and developing a business in general. Forecasts are neede by companies of any size: be it a small private production or a large state enterprise.
The purpose of forecasting is to identify positive and negative factors that may affect the company as a whole, its individual products. Changes in demand. Forecasts can help answer the following questions
What sales should we expect over the next 12 months?
In which months should you produce more products due to increase sales?
How many new clients can a company attract if its advertising budget increases by 20%?
What results can you expect from your upcoming marketing strategy?
Before forecasting, it is important to define precise goals – why the company needs it and what problems it will help solve. Only after that, the appropriate type and method of research is selecte.
Types of forecasting
Long-term — compile for five or more years. Typically use in large companies for detaile market research, risk identification and general market trends. During the study , the volume of demand, product requirements, demographic and socio-economic factors that can affect the market and the company are studie. The data obtaine helps set large-scale goals and determine the development vector of the company as a whole.
Medium-term — is drawn up for a period of 1 to 5 years. Its purpose is to identify trends and changes that may affect the company’s strategic decisions. For example, a possible change in consumer demand for certain goods or services, the demand for new products on the market is determined. This helps to change the strategy in a timely manner .
Operational
Covers a short period of time up to manera de cuidarme que es mucho mejor que un masaje one month, but is generally of a permanent nature. It is calle regular monitoring of important indicators that will help make the right management decisions even if short-term planning was carrie out a long time ago.
Forecasting methods in marketing
All forecasting methods are divide into two large groups:
Factual – includes the collection and analysis of data that can be expresse in numerical values. For example, it is determine how many clients were attracte by advertising campaigns over the past six months.
Expert – base on information from experts, their personal experience, hypotheses and assumptions.
In turn, factual forecasting methods are divide into
Extrapolation
Base on the analysis of current trends and their transfer to the future. We will talk about them in more detail below in a separate block.
Systemic-structural – base on the definition and clarification of interrelations. These include morphological analysis, network modeling, matrix method and others.
Leading information – aime at identifying and analyzing information that can significantly affect the market and the organization. When using it, possible discoveries and new developments are studie and analyze, patent information and streaming publications on an important topic are analyze.
Most often, methods from both groups are use simultaneously.
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A guide for those who consider a strategy session as a tool for business growth, from the founders of the company “Precisely.”
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Extrapolation in Marketing
This is one of the simplest and most awb directory effective forecasting methods. The method involves analyzing indicators for previous periods.
Example. It is necessary to plan how many clients will be attracted using targeted advertising in the next month (to forecast demand). To do this, data from the system for the last 6-12 months is taken and converted into a graph. On it, we will see the dynamics of a positive or negative trend, as well as the average number of clients attracted for each month. Based on this data, a conclusion is made approximately how many clients will be attracted, whether there is an increase or decrease in demand for products, etc.
