Effect Of Sales Forecast On Marketing Decision Making
Ineffective application of effective planning in many organizations is the main thrust for their inability to predict and make a sound decision which lead to the failure to achieve projected performance. This paper examines the effect of sales forecast on marketing decision making. This study was designed to give strategic managers practical suggestions for better understanding of the forecast so that managers can plan their reactions effectively to enable better performance. The total population for the study is 200 staff of Dangote group of company was selected randomly. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up managers, human resource managers, senior staff and junior staff was used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies.
1.1 Background to the Study
The heart of management in all level of responsibilities is the fundamental requirement of being able to communicate; sales forecast have an effect in the dissemination of business information to the target market and general public. The task of business management would be simpler if industry was not continual state of change. This change is reflected in increasing competition precipitated to a large extent by the growth of global competition which has increased over the last decade. Accurate forecasting or prediction of an event in a business environment in which and organizations exist is important in the design of productive sales force, structure and control over cost and profit. This makes it difficult for an organization to forecast or predict their future prospect in terms of sales, cost and profit. Forecasting itself is a realistic estimate so as to currently anticipate what a buyer is likely to do under a given set of condition. Forecasting helps management to anticipate the future and reduce uncertainty which limit their ability to plan effectively. Successful forecasting requires a skillful blending of art and science including experience, judgment and technical expertise. Forecasting generally involves using information from the past to make decision concerning the future; manager or marketer faced a dilemma in this regard, i.e the ability to used the information of the past to forecast the future, what will happen in the future. In this respect some manager or marketer attempts to make a distinction between a prediction and forecast. Managers that understand the tie between the resource decision and the forecast horizon can be more flexible in their resource plans on long-term decisions. Every act of preparing for the future implies some forecasting of impending conditions. In the context of business management, forecasts can be used to support long-term strategic decisions, operational decisions
or short-term tactical decisions. Management requires forecasting information when making a wide range of decisions.
The sales forecast is particularly important, as it is the foundation upon which all company plansare built in terms of markets and revenue. Management would be a simple matter if business were not in a continual state of change, the pace of which has quickened in recent years. The result of this constant change, however, is that business tasks are becoming more complex and business decisions are being more long-term in nature. It is becoming increasingly important and necessary for businesses to predict their future prospects in terms of sales, costs and profits. The value of future sales is crucial as it affects costs and profits, so the prediction of future sales is the logical starting point for all business planning. Thus, the company’s customers and their likely purchasing behavior during the period to come are the starting point for business planning, and this idea lies at the very heart of all marketing activity. As well as helping to plan expansion into new markets and new product lines, forecasting can also be viewed as the act of giving advance warning in time for beneficial action to be taken. In order to predict the future it is usual to examine the past in order to observe trends over periods, and to establish the degree of probability with which these trends are likely to repeat themselves in the future. Future predictions are therefore inherently wrong as they are based upon probability; it is up to management to decide upon the degree of imprecision that can be tolerated when planning. One general rule, which can be applied to forecasting, is that forecasts that are more accurate will be more expensive than less accurate ones because they employ more sophisticated analyses in their computation. It is on the this view the researcher wants to investigate the effect of sales forecast on marketing decision making.
1.2 Statement of Problem
Most manufacturing companies perform poorly in terms of sales forecast. This is why several criticisms have been leveled against them. Huge sum of money is been expended on sales forecasting through marketing managers which draws the company’s finance. In spite of the benefits from sales forecasting in an organization, there is also the view that it is expensive consuming huge amount of money.
1.3 Objective of the Study
The main objective of this study is effect of sales forecast on marketing decision making. But for the successful completion of the study; the researcher intends to achieve the following sub-objectives;
- To investigate the effect of sales forecaston marketing decision making.
- To determine if the forecasting method adopted is used consisting by the company.
- To ascertain if sales forecast is relevant to marketing decision making.
- To ascertain the relationship between sales forecast and marketing decision making
1.4 Research Hypotheses
For the successful completion of the study, the following research hypotheses were formulated by the researcher;
- H0: sales forecast does not have any impact on marketing decision making.
H1: sales forecast have impact on marketing decision making.
- H02: there is no significant relationship between sales forecast and marketing decision making
H2: there is a significant relationship between sales forecast and marketing decision making
1.5 Significance of the Study
It is appropriate to say that this research work will be of great benefit to many people. This research will benefit the producers with regard to the best forecasting techniques used in promoting their product of the target market. Also, it will help management to know the importance of sales forecast in decision to the successful achievement of the company’s objectives with reference to their products. It will alsobring about the experience of the consumers.The study will also be of great benefit to the researchers who intends to embark on research on similar topics as it will serve as a guide. Finally, the study will be of great importance to academia’s, lecturers, teachers, students and the general public.
1.6 Scope and Limitation of the Study
The scope of the study covers effect of sales forecast on marketing decision making. The researcher encounters some constrain which limited the scope of the study;
a) Availability of Research Material:
The research material available to the researcher is insufficient, thereby limiting the study
The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
c) Organizational Privacy:
Limited Access to the selected auditing firm makes it difficult to get all the necessary and required information concerning the activities.
1.7 Definition of Terms
According to Katler and Keller (2006), marketing management forecasting is the act of anticipating what buyers are likely to do under a giving set of condition.
According to Anyanwu (2000), marketing management sales forecasting is the act of predicting sales under a given set of conditions within a specified time period of one or more years.
Company Sales Forecast:
According to Kotler (2006), marketing management company sales forecast is the expected level of company’s sales based on a chosen marketing plan and the assumed marketing environment.
According to Mazur (2001), marketing is the delivery of a standard of living to society; this definition is an attempt to counter the criticisms of marketing especially by those who see it as an agent of corruption in the society.
This is a process of planning, organizing, directing and controlling activities to meet the objectives and goal of the organization.
1.8 Organization of the Study
This research work is organized in five chapters, for easy understanding, as follows
- Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
- Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
- Chapter three deals on the research design and methodology adopted in the study.
- Chapter four concentrate on the data collection and analysis and presentation of finding.
- Chapter five gives summary, conclusion, and recommendations made of the study.
Summary, Conclusion and Recommendation
It is important to ascertain that the objective of this study was to ascertain effect of sales forecast on marketing decision making
In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of sales forecast on marketing decision making
This study was on the effect of sales forecast on marketing decision making. Four objectives were raised which included;to investigate the effect of sales on marketing decision making, to determine if the forecasting method adopted is used consisting by the company, to ascertain if sales forecast is relevant to marketing decision making, to ascertain the relationship between sales forecast and marketing decision making. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of Dangote group of company was selected randomly. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made up managers, human resource managers, senior staff and junior staff was used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies.
Significant gains have been made in forecasting for marketing. Advances have occurred in the development of methods based on judgment, such as role playing, opinions surveys, and bootstrapping.As a result, the significance of all business forecasting depends upon forecast theory.
- When making forecasts in highly uncertain situations use more than one method and combine the forecasts using equal weights.
- When possible, forecasting methods should use data on actual behavior, rather than judgments or intentions, to predict behavior.
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