Buyers use forecasts to answer all of the following questions except:
a. How much to purchase?
b. Should new products be added?
c. What price should be charged?
d. Which media should be used to promote the product?
SCOPE OF FORECASTING
• How much of each product will need to be purchased?
• Should new products be added to the merchandise assortment being offered?
• How much inventory is needed to support the planned sales?
• What price should be charged for each product?
• Sales forecasts can include:
– Specific products or services (brands or models)
– Specific consumer groups (males, over 65)
– Time periods (weekly, monthly)
– Specific store locations
• Preparing sales forecasts requires buyers to think in detailed terms about:
– Target market groups the store is trying to serve
– Existing and potential competitors
– Future trends occurring in the market and the economy
DEVELOPING SALES FORECASTS
Examining Internal Forces
• Future sales can be affected by:
– Increasing or decreasing advertising expenditures
– Liberalizing or tightening credit policies
– Increasing or decreasing retail prices
– Changes in store hours or physical facilities
Examining External Forces: Economic conditions, Demographic trends, Competitive conditions
• Both the national and local economic climate should be analysed
• Headlines from the newspapers affect buyers’ decisions
• You must be alert to all changes in the composition of your customer base
• Even lifestyle changes in your target market are noteworthy
• Be aware of current competitors closing their doors and new competitors’ openings
• Your competitors’ promotional strategies may also change
Acquiring Needed Data
• Primary data sources
• Secondary sources
Which one of the following is considered to be primary data?
a. Information from books and magazines
b. Business records from another department in a store
c. Data that originates with the specific research being undertaken
d. Data that has been gathered for another purpose
Primary Data Sources
• Retailers use customer surveys to forecast future consumer buying patterns • Techniques include:
– Holding weekend focus group sessions
– Reading comments from the suggestions box
– Speaking with customers and employees
• In volatile times