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Sales Management

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Times MS PGothic Arial EMBATemplate_blank 1_EMBATemplate_blank PowerPoint Presentation Sales Forecasting ... Patterns Market Potential Qualitative ... – PowerPoint PPT presentation

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Title: Sales Management


1
Sales Management
Sales Forecasting Topic 13
2
Sales Forecasting
  • What is it?
  • Why do it?
  • Qualitative vs Quantitative
  • Goal Accuracy
  • Commonly Done by Marketing

3
Forecasting Overview
  • Hard to do, but must be done
  • Shorter Time Frames are more accurate
  • Harder for New Products
  • No Substitute for Actual Demand
  • Done for Each Product, Territory, ..
  • Multiple Methods often used

4
Goal is.
  • Accuracy
  • Accuracy
  • And
  • Accuracy

5
Mean Absolute Error (MAPE)
  • Why Mape (or MSE)?
  • All past forecasts
  • Does not control for external shocks

6
Patterns
  • Trend
  • Seasonality
  • Cycle
  • Outliers

7
Market Potential
  • Buying Power Index
  • NAICS
  • Trade Press
  • Chain Ratio
  • Leading Indicators

8
Qualitative Methods
  • Turning Points Shocks
  • Sales Force Composite
  • Jury of Executive Opinion
  • Survey of Customer Buying Intentions

9
Quantitative Methods
  • Strong Weak Points
  • Seasonal Adjustments
  • Naïve
  • Moving Averages
  • Exponential Smoothing
  • Other Methods

10
Naïve Method
  • Previous Period Forecast
  • More Accurate than you think

11
Moving Averages
  • 2PMA
  • 3PMA
  • Ex 2PMA
  • t1 100
  • t2 150
  • Forecast 125

12
Exponential Smoothing
  • 2 Formulas
  • Usually High Alpha (why done)

13
Exponential Smoothing Example
  • Alpha 0.9
  • 2020 1000
  • 2021 1200
  • 2022 1100
  • 2022 forecast .9 (1200) .1 (1000) 1180
  • 2023 forecast .9 (1100) .1 (1180) 1108

14
Regression
  • Dependent vs Independent Variables
  • Can you get data?
  • Better than using dependent variable alone?

15
Trend Projections
  • Why Done
  • Problems With

16
Most Firms Use gt 1 Method
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