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Sales Forecasting and Budgeting

  • Bill Donaldson
Chapter
Part of the Studies in Marketing Management book series

Abstract

One activity that all businesses do to some degree is to anticipate future events. From the one-man business to the multinational conglomerate and regardless of whether the business is product-, production- or sales-oriented, enterprises have to operate on the basis of expectations about the future. Particular questions concerning how much capital will be required, what scale of plant, how much product to make and stock, what level of sales support and advertising and how many people to employ require an estimate of revenue from future sales. It is one of the major responsibilities of the marketing function to make sound and careful appraisal of business opportunities and is not the responsibility of the finance or sales departments. For this reason, a detailed appraisal of sales forecasting methods should be part of a marketing or specialist text on the subject. The topic is introduced in this book for four particular reasons. First, most companies use salesforce input in their forecasts. In one survey, 86 per cent of firms used salespeople to submit some form of sales forecast estimate (Wotruba and Thurlow, 1976). This is as it should be, although the extent and method of this input needs careful evaluation. Second, although it is a marketing responsibility, salespeople and sales managers must understand the importance, the process and the methods of sales forecasting. Third, the sales forecast ought to be the major influence on sales targets at both company and individual territory level. Finally, developments in information technology make it necessary for sales management to understand and use modern marketing information systems, of which the sales forecasting process is a major component. In this chapter the aim is to:
  • realise the importance of sales forecasts and understand their use

  • describe the process of forecasting and some of the techniques

  • explain the connection between sales forecasts, sales budgets and sales targets

  • illustrate the components in a sales budget

  • evaluate the role of salespeople as sources of market intelligence and research.

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References

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Copyright information

© Bill Donaldson 1998

Authors and Affiliations

  • Bill Donaldson

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