Sales forecasting is a difficult area of management. Most managers believe they are good at forecasting

1. Sales Budget & Sales
Target
Forecasting Sales - Mashhad
By : Amin Kakhki 2016 – Frozen Food Industry

2. The Team
Marketing Plan
Sales Force BudgetSales Forecast

3. Sales Forecasting
Sales forecasting is a difficult area of
management. Most managers believe
they are good at forecasting. However,
forecasts made usually turn out to be
wrong! Marketers argue about whether
sales forecasting is a science or an art.
The short answer is that it is a bit of
both.

4. Forecasting Approaches
Two basic approaches:
• Top-down or Break-down approach
Some companies use both approaches
to increase their confidence in the
forecast

5. Sales Budget & Target
Sales
Budget &
Sales
Target
Other Factors
Market
Opportunities
Sales
Forecasting
Marketing
Data &
Strategy

6. Market Size & Opportunities
• Official Statistics Data : Market size depend on
official statistics like population, rate of buying , number
of supermarket and ….
• Market Research : The best way to summarize
information about market size and market opportunities
is market research , but it is so expensive and time-
consuming.
• Pervious Research Data : After a couple of years ,
there are too many market data , that we can use to
define market size and market opportunities. We can use
buying pattern for different customer’s level and buying
pattern in others sale’s line.

7. Pervious Research Data
• In pervious research , (2014 Mashhad), we know that
the market size is 94,000 Kg per month but there is no
data about the number of customer.
• So we know that potential market is least 94,000 Kg per
month , market forecast is at least 33,000 kg.
Market Potential
Market Forecast
Market Minimum
Industry marketing expenditure
Marketdemand

8. Sales Forecasting Methods
Qualitative
Methods
Quantitative Methods
• Executive opinion • Moving averages
• Delphi method • Exponential smoothing
• Salesforce composite • Decomposition
• Survey of buyers’
intentions
• Naïve / Ratio method
• Test marketing
• Econometric analysis

9. Regression analysis
• According to the sales’ pattern with understanding the
effects of seasonal and even months, after reviewing
various statistical models and methods, it was found that
the regression analysis shows the closest forecast for
sales.

10. Regression Analysis Method
• It is a statistical forecasting method
• Process consists of identifying causal relationship between
company sales (dependent variable, y) and independent
variable (x), which influences sales
• If one independent variable is used, it is called linear (or
simple) regression, using formula; y=a+bx, where ‘a’ is
the intercept and ‘b’ is the slope of the trend line
• In practice, company sales are influenced by several
independent variables, like price, population, promotional
expenditure. The method used is multiple regression
analysis
• Advantages: Objective, good accuracy, predicts upturn /
downturn, short to medium time, low to medium cost
• Disadvantages: technically complex, large historical data
needed, software packages essential

11. For Khordad (AM)
Total Frozen Foods
Sale forecast
Minimum Market
28603 Kg
Market Forecast
36000 Kg
Market Potential
103000 Kg
Total AM(2014) = 94000
Total AM(2016) = 94000 + 10% = 103000

12. Other Factors
• Khorasan is one of the largest Province in Iran with
889058 households . According to scientific papers , at
least 4900 supermarket needs to covered.
• Statistics show that only 45 percent of supermarket
buying frozen products. The number of supermarkets
which buy frozen food is 2,200 stores.