Objectives of Forecasting The objective of this post is to impart some light on the uses and importance of forecasting and to get you acquainted with various forecasting techniques. What is Forecasting? Forecasting is a technique that uses historical data as inputs to make informed estimates that are predictive in determining the direction of future trends. And also to know how these techniques are used in an organization’s decision making process. Nature of Forecast A forecast is an estimate of an event which will happen in future – be it, demand of a product, rainfall at a particular place, population of a country, or growth of a technology.It is estimated based on the past data related to a particular event and hence it is not a deterministic quantity.In any industrial enterprise, forecasting is the first level decision activity before consolidating other decision problems like, materials planning, scheduling, type of production system.Forecasting provides a basis for co-ordination of plans for activities in various units of a company.All the functional managers in any organization will base their decision on the forecast value. So, it provides vital information for that organization. Classification of Forecasts Technology forecastsEconomic forecastsDemand forecasts 1. Technology Forecast Technology is a combination of hardware and software. Hardware is any physical product while software is the know-how, technique or procedure. Technology forecast deals with certain characteristics like level of technical performance, rate of technological advances. It is a prediction of the future characteristics of useful machines, products, process, procedures or techniques. TIFAC – Technology Information Forecasting and Assessment Council is an autonomous organization set up in 1988 under the Department of Science & Technology. In 1993, TIFAC embarked upon the major task of formulating a Technology Vision for the country in various emerging technology areas. 2. Economic Forecast Government agencies and other organizations involve in collecting data and prediction of estimate on the general business environment. Economic forecast This involves the application of statistical models utilizing variables sometimes called indicators. Some of the most well-known economic indicators include inflation and interest rates, GDP growth/decline, retail sales and unemployment rates. This is used to predict future tax revenues, level of business growth, level of employment, level of inflation etc. Also, these will be useful to business circles to plan their future activities based on the level of business growth. 3. Demand Forecast This gives the expected level of demand for goods or services. This is the basic input for business planning and control. Hence, the decisions for all the functions of any corporate house are influenced by demand forecast. Factors Affecting Demand Forecast Business cycleRandom variationCustomer’s planProduct’s life cycleCompetitor’s efforts and pricesCustomer’s confidence and attitudeQualityCredit policyDesign of goods or servicesReputation for serviceSales...

Market Research for Product Line Management Business firms, whether involved in the manufacture of goods or delivery of services, have to understand the importance of marketing research that would give a fair idea about their territory of operations and the scope for development. Let me first clarify the obvious difference between a market research and marketing research. While market research is confined to only a market which comprises of its potential and actual buyers, a marketing research delves deep into and further beyond, covering all areas of marketing including the market. Identification of Consumer Needs: Identification of consumer needs and satisfying them is vital for the emergence of a buyers market. Although firms manufacture goods that are competitive in terms of quality and price, it is the middlemen, the linking factor between the manufacturer and the wholesaler or retailer, that have a commanding grip on distribution, affecting sales volumes. Extensive marketing research will help firms to solve such problems of middlemen and distribution, to cater to the needs of the ever expanding market. Preference of People: People’s preference always changes resulting in a sea change of market conditions. In order to anticipate and meet any such changes, a firm needs to analyze the market conditions on a day to day basis. Also improving the product design helps a firm to retain its customer base. How does a firm survive in the market without knowing the elemental changes that are happening in its immediate environment? Pricing is one of the crucial factors that determine the acceptance ratio of a product or range of products. Information Source: Marketingtutor A separate department is maintained by some top corporate firms to collect relevant information about the pricing strategies of rival companies that helps them to take the market lead, by quoting competitive prices comparatively. Such secret agendas are a need of the hour to outsmart your rivals. Sales Promotion and Advertisement Campaigns: Another component of the research planning is sales promotion and advertisement campaigns. Sales promotion is solely dependent upon the sales force and the marketing manager has to play a key role in integrating their functions to bring out their strengths. The activities of the sales personnel should be oriented towards targets and a mission without a target is like travelling without knowing the destination. Information Source: BBAMANTRA When we talk about advertisements, they not only sell tangible products but also intangible things like morals, values, love etc., So, it becomes even more important for the advertisers to follow some built in standards that does not affect the ethical values of the society concerned and also they should make it a point not to make women a mere object of attraction. The market research that is a part of marketing research includes the study of the following: Market sizeMarket potentialMarket shareMarket segmentsMarket trends and seasonal trendsSales forecastingConsumer profileConsumer preferenceCompetitor analysisMeasuring the price elasticity of demand and much more. Such marketing research helps a firm to develop a comprehensive plan regarding effective training programmes, sales force management, research and development programmers and effective control mechanisms. It also facilitates efficient decision making and the operational tasks of marketing management, thereby contributing to customer satisfaction and efficiency of the...