Quantitative Sales Forecasting

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Quantitative Sales Forecasting

Quantitative sales forecasting helps businesses predict future sales based on historical data.

Time-series analysis

Time-series analysis refers to the use of past data and trends to forecast and predict future trends.
Time-series analysis allows businesses to use moving average calculations to forecast future sales based on historical data.

Moving average calculation

Three period moving averages allow a business to use three sets of (usually annual) data to calculate an average for future predictions.
- Three period moving averages reduce the impact of a single anomaly on future predictions as an average from three years is calculated.
Four quarter moving averages allow a business to use data from four quarters (three month periods) to calculate an average sales figure.
- Four quarter moving averages increase calculation accuracy because they minimise the impact of unusual or seasonal sales figures.

Correlations

Correlations can be used by marketing departments to examine the relationship between two variables.
Scatter graphs can be used to show correlation and allow businesses to extrapolate data. Extrapolation involves using past data trends to predict future performance.

Types of correlations

Positive correlation occurs when an increase in one variable results in an increase in the other variable.
- For example, if increasing advertising spending results in an increase in sales, there is a positive correlation and a business is likely to raise its advertising budget.
Negative correlation occurs when an increase in one variable results in a decrease in the other variable.
- For example, if increasing advertising spending results in a decrease in sales, there is a negative correlation, and a business is unlikely to raise its advertising budget.
There is no correlation if a relationship between two variables cannot be determined.

Graphs

A line of best fit can be used on scatter graphs to represent data and identify the general relationship between plotted points of data.
- For example, if the temperature increases, total customer spending on ice cream may increase.
- This is a positive correlation and the general trend can be highlighted using a line of best fit.

Disadvantages of quantitative techniques

Changes in the external environment (political, environmental, social, technological, legal and economic) can impact the business’ future performance.
- This is not reflected in the past performance data which is used to extrapolate.
Changes in the internal environment (culture, leadership, financial performance) can impact the business’ future performance.
Quantitative sales forecasting can be time-consuming and complex.

1Exploring Business

2Marketing Campaigns

2.1Marketing

2.1.1Setting Marketing Objectives

2.1.2Customer Needs

2.1.3The Market

2.1.4Competition & The Market

2.1.5Consumer Behaviour

2.1.6Market Research

2.1.7Forms of Market Research

2.1.8Market Segmentation

2.1.9Cultural & Social Factors in Marketing

2.1.10Promotional Decisions 3

2.1.11Pricing Strategies

2.2Marketing Mix

2.2.1Marketing Mix

2.2.2Product Life Cycle

2.2.3Pricing Decisions & Price Skimming

2.2.4Pricing Decisions & Price Penetration

2.2.5Promotional Decisions

2.2.6Promotional Decisions 2

2.2.7Promotional Decisions 3

2.2.8Market Mapping

3Business Finance

3.1Sources of Finance

3.1.1Internal Finance

3.1.2External Finance

3.1.3External Finance 2

3.1.4Sources of Business Finance

3.2Financial Planning

3.2.1Revenue

3.2.2Costs

3.2.3Cash & Cash Flow

3.2.4Cash & Cash Flow 2

3.2.5Break-Even Analysis

3.2.6Profits

3.3Financial Statements

3.3.1Balance Sheets

3.3.2Income Statements

3.3.3Liquidity

4International Business

4.1Globalisation

4.1.1Growing Economies

4.1.2Specialisation & Trade

4.2International Business

4.2.1Internationalisation

4.2.2International Trade

4.2.3MNCS

4.2.4Conditions that Prompt Trade

4.2.5Assessment of a Country

4.3International Economic Environment

4.3.1Globalisation

4.3.2Factors Contributing to Globalisation

4.3.3Protectionism

4.3.4The EU & the WTO

4.3.5Trading Blocs

4.4Factors Affecting International Business

4.4.1Global Competitiveness

4.4.2Ethics of Global Business

4.4.3Controlling MNCs

4.4.4Cultural & Social Factors in Marketing

5Principles of Management

5.1Management & Leadership

5.1.1Managers

5.1.2Management Theories

5.1.3Managing Organisational Culture

5.1.4Management Style

5.2Theories of Motivation

5.2.1Motivating & Engaging Employees

5.2.2Taylor's Theory

5.2.3Mayo's Theory

5.2.4Maslow's Theory

5.2.5Herzberg's Theory

5.3Managing Change

5.3.1Change

5.3.2Key Factors in Change

5.3.3Scenario Planning

5.3.4Managing Change

5.3.5Managing Strategic Implementation

6Business Decision Making

6.1Business Principles & Practices

6.1.1Influences in External Environments

6.1.2Product Decisions

6.1.3Competitive Environment

6.1.4Corporate Strategy

6.1.5Quantitative Sales Forecasting

6.1.6Legislation

6.2Quality Management

6.2.1Importance of Quality

6.2.2Measuring Quality

6.2.3Total Quality Management

6.2.4Evaluating TQM

6.3Human Resources

6.3.1Contracts

6.3.2Recruitment

6.3.3Training a Workforce

6.4Documents & Business Decisions

6.4.1Sales Forecasts

6.4.2Managing Strategic Implementation

6.4.3Problems with Strategy

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