Forecasting the future is a different activity from market research. Market research can identify the current activities and perceptions of consumers. At an operational level relevant marketing information is likely to be readily available to support the activities that have to be undertaken. At the marketing management level marketing information which is relevant to the supported activities will not be so easily available. At strategic level marketing information to support decisions is likely to be largely unavailable and the reliability of that information questionable .
On what basis can a manager judge the quality of marketing information relating to the future? To give an example: market research could be undertaken to establish consumers’ current perceptions of the future. However, consumers’ views of the future are based on what they currently know and they may not be in a position to take an informed view. Indeed, there is no reason to believe that the view of the average customer is relevant. Is this view any more realistic than the view of a single expert in the area? More and more marketing information can be produced but at a strategic level this is unlikely to be reliable. There is no useful benefit in acquiring more and more marketing information in order to support strategic decisions. It is typical that only 1–10 per cent of a company’s resources and effort in gathering marketing information is useful in supporting the strategic decision-making process which is likely to generates 90–99 per cent of the value in an organization (Diff, 1983).
What is critical is for managers to form a fully developed understanding of the market they are in and to establish the strategic issues that could have an impact on the business in the longer term.This will allow them to establish the key areas where changes in the environment could affect critical factors such as the industry’s structure,market demand, or competitive reactions. Effectively this entails establishing the key questions that need to be answered in order to form a view of the future. These questions are unlikely to be important in terms of the day-to-day operation of the business but will be crucial to its long-term direction. Forecasting can be an effective way of identifying these strategic questions.
There are various forecasting techniques that can be used by an organization .
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