EFFECT OF SALES FORECAST ON MARKETING DECISION MAKING
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.
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 Research Questions
This research work is intended to ask the following questions:
(i) Does forecasting have any impact in marketing decision making?
(ii) Does forecasting method of sales help in marketing decision marking of an organization?
(iii) Does sales department witness a decline in sales a result of increase in price?
1.4 Objectives Of The Study
It is said that an undertaking without a purpose is an attempt to pave way for unproductive ventures. It is in this regard that the researcher has endeavoured to design, the purpose that has strictly adhered to are:
i. To investigate the effect of sales on marketing decision making.
ii. To determine if the forecasting method adopted is used consisting by the company.
iii. To be aware if the sales manager should be familiar with the method of forecasting in marketing decision making.
iv. To know if sales forecast is relevant to marketing decision making.
1.5 Statement of the Hypotheses
The following hypothesis will be tested in the study:
Sales forecast does not have any impact on marketing decision making. Sales department does not witness decline in sales when company increases price. The sales manager should not be familiar with sales forecasting.
1.6 Scope of the Study
The scope of this study focus mainly on the activities of sales department using the Nigeria Bottling Company located in Benin City as a case study, in marketing decision making. The study will look at the effects of sales forecast in marketing decision making and the problems associated with the administration of sales forecast in the company.
1.7 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. Finally, it brings about the experience of the consumers.
1.8 Limitations of the Study
Limitations encountered during the course of carrying out this study cannot be overemphasized. One of the problems was the problem faced with the respondents, some were not serious in answering the questions why some did not really give meaningful contributions toward this study for fear of given confidential information which could be used against them in the future.
Some of the questionnaires distributed to respondents were not returned because of their nonchalant attitude towards the study.
Another problem was inadequate time; it was not an easy task to continue this project research work with classroom work because the duration of the semester was very short.
Finally, the other important factor that limits this study is the problem of case study. In carrying out this research work, I discover that the perception of the employees toward sales forecast in their organization in relation to what is obtained in other organization are different. Because of this, the research work is strictly based on the Nigeria Bottling Company Plc, Benin City Edo State as a study.
1.9 Operational Definition of Terms
The following terms defined in this study is to aid understanding:
Forecasting: 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.
Sales Forecasting: 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.
Marketing: 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.
Performance: This is the effort expended by the workers in the attainment of the desired objectives of the organization.
Organization: An organization is the co-ordination of the activities of a number of people for the achievement of the common goal through division of labour function and also through the hierarchy authority.
Management: This is a process of planning, organizing, directing and controlling activities to meet the objectives and goal of the organization
SUMMARY, CONCLUSION AND RECOMMENDATIONS
The aim of this study was to find out the effect of sales forecast on marketing decision making in doing this, questionnaires were administered to the chosen case study (Nigeria bottling company plc, Benin city) and four hypothesis were formulated which were tested and analyzed. In with the above analysis the following summaries of findings were drawn.
That sales forecast makes an effect in marketing decision making. It is highly dispensable to the company. Its functions are such that can be under stimulated in the sales of company’s product. It cannot be used in the allocation of companies resources.
That the sales department discovers decrease when the company increase prices.
It was also found out that sales should be familiar with the various forecasting techniques.
Lastly, the method adopted is used consistently by the company.
Sales forecast is a self assessment tool for a company. The future direction of the company may rest on the curacy of sale forecast processes realize important benefit such as:
i. Enhancement of cash flow
ii. Knowing when and how much to buy
iii. In depth knowledge of customers and the product they order.
iv. Ability to determine the expected return on investment sale forecast does not only affect or apply to sales department alone but other department within an organization
Based on the findings, the following recommendations have been proffered:
(1) For sales forecast to be valuable in making decision concerning your organization, it must not be treated as an isolated exercise rather, it must be integrated into all aspect of the organization. Since the forecast is based on your company’s previous sales, it is necessary to know that naira sales volume of past several years. To complete a thorough sale forecast, you need to take into consideration all of the elements both internal and external factors relating to the sales functions.
(2) The organization should try and reduce price for its product in other to have increase in demand but carefully i.e. they should check price of competing product. It was noted that the company witness increase demand during seasonal periods, with a reduction in price demand will go higher and therefore result to increase sales. During seasonal period, the company should try and avoid stock out. The company should install additional production lines to cope with increase in demand.
(3) The sales manager must be familiar with the basic techniques involved. Whether or not be has change the entire process even when his role in calculating forecast is minimal. The sales manner must utilize forecast information in budgeting, setting quote and other activities. In order to apply forecast data properly he should know precisely what is measured by various techniques and what assumption each techniques requires.
(4) It is significant to note that if you sell more than one type of product, you should prepare a separate sales forecast for each product group. The more focused yours sales forecast is, the more precise its outcome will be.
5.4 Suggested Areas For Further Studies
This research work was carried out to ascertain effect of sales forecast on marketing decision making using Nigeria bottling company plc, Benin city as a case study.
Forecasting is a self assessment tool for direction of the future of the company in making accurate decision concerning on organization, since this study only examined workers in Nigeria, bottling company others in mining oil, education, medical transports etc. should used forecasting in making good decision in the internal and external factors of the organization..