The Sales Forecast

Sales forecast is the estimation of a corporation’s sales over a future period of time.  Forecasts are usually made according to economic trends in the given industry, sales, and competitive developments (Wallace & Stahl, 2008). Sales forecast is a mean through which management makes predictions on sales volume thus assisting in the preparation of budgets. The methods that are employed in sales forecasting are greatly varied depending on what aspect is being analyzed. Sales forecasting may be micro which deals with analysis of total demand in the market, and micro which deals with estimations of a unit of sales in a given industry and issues a market share. The choice of method to be adopted depends on a degree of accuracy required, time period for which the forecast is undertaken, availability of information and data, and the position of the products in the life cycle (Wallace & Stahl, 2008).

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The sales forecast is then prepared depending on a marketing plan that has been developed and the projected demand based on the marketing environment. An example of a macroeconomic sales forecast is a company which may collect information on the whole industry where the company operates. For instance a company that is selling juices will collect information on the estimated total demand for juices in the nation or in the location in which it operates. The sales forecast will thus be made according to future expected decreases or increases in total market demand for juices. A good example on the use of micro forecasts is the analysis and estimation of sales for carbonated drinks; in the FMCGs industry, for instance, and also issues such as the total market share that a particular company holds in that industry. Sales forecasts will thus be hinged upon how the company either expects its market share to increase or reduce in the period under review (Wallace & Stahl, 2008).

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