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IB BUsiness MAnagement:
Key Learning Outcomes:
Sales forecasting: Predicting future sales levels and sales trends.
If marketing managers were able to predict the future accurately, the risks of business operations would be much reduced. If a precise forecast of monthly sales over the next two years could be made, the benefits to the whole organisation would be immense:
Limitations of Sales Forecasting:
Attempting to predict the future is a difficult thing. This is mainly that there are so many different variables that could change. The further into the future forecasting tries to extrapolate, the greater the degree of likely error. The main problems are:
Seasonal variations: Regular and repeated variations that occur in sales data within a period of 12 months or less.
Cyclical variations: Variations in sales occurring over periods of time of much more than a year – they are related to the business cycle.
Random variations: May occur at any time and will cause unusual and unpredictable sales figures, e.g. exceptionally poor weather or negative public image following a high profile product failure.
Progress check - test your understanding by completing the activities below
You have below, a range of practice activities, flash cards, exam practice questions and and an online interactive self test to ensure you have complete mastery of the IB Business Management requirements for the Marketing 4.3 Sales Forecasting section.