Should actual sales fall short of, or exceed, forecasted sales, management must investigate the reasons for the difference, and from their inquiries determine whether or not it is necessary to adjust the sales forecasting technique. Thus sales forecasting is a continuous process. The changing nature of the economic and physical environment means that forecasts should be under continuous scrutiny and revision. Every projection can be improved, and in competitive situations even fractional increases in accuracy can be translated into higher profits.
It has already been said that all sales forecasts are wrong; they only differ in the extent of their wrongness. Perfection is unattainable, and the organization must decide what level of accuracy is required within pre-determined time and cost constraints. Management must fix the level of inaccuracy that can be tolerated, and this will allow it to compare cost with value when selecting the appropriate technique.
An illustration of how this notion of comparing the costs of different techniques of forecasting can be traded off against their degree of accuracy in order to arrive at the best-value techniques.
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Marketing Management Tutorial
Development Of A Strategic Approach To Marketing: Its Culture; Internal Macro- And External Micro-environmental Issues
Markets And Customers: Consumer And Organizational Buyer Behaviour And Marketing Strategy
Markets And Customers: Market Boundaries; Target Marketing
Product And Innovation Strategies
Channels Of Distribution And Logistics
Customer Care And Relationship Marketing
Marketing Information Systems And Research
Analysing The Environment: (opportunities And Threats) And Appraising Resources (strengths And Weaknesses)
Evaluating And Controlling Strategic Marketing
Strategic Marketing Planning Tools
Services Marketing And Not-for-profit Marketing
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