How to compile a sales forecast and conceive a marketing strategy

Compiling the sales forecast

There are two main areas to look at - desk research and field or commissioned research.

Desk research

1. Look at existing company records, planned production and strategy, available statistics, trade and technical publications and possible market surveys already done. Visiting reps are often a rich and reliable sources of marketing information.

2. Because of inflation it is often more realistic to compare your own yearend results on a unit basis rather than monetary values. The effects of price discounts and other manipulations will give a distorted picture.

3. For multi-product companies it may be simpler to remember the Pareto 80/20 rule: 80 per cent of your sales tend to come from 20 per cent of your stock. Concentrate on your best and most profitable lines.

4. The influence of the product life cycle is a dominant factor in all your forecasting. New products may require more promotion, have less acceptability, meet stiffer resistance than maturer lines. Profitability will cer - tainly be different depending on where the product stands on the curve.

Time is the greatest enemy of more sophisticated analysis. Few small firms have the time available to devote to detailed examination of statistics or will have broken down their own records into the requisite number of headings. Ideally, these should be product lines (turnover and profit contribution), timescale (to pinpoint seasonal fluctuations), area (penetration by sales force or concentration of marketing effort) and distribution channels (wholesalers, retailers, agents or direct response).

What influence a good website will have on turnover is difficult to determine at this early stage of its development. Trade figures suggest that you may get between a 5 per cent and a 20 per cent turnover from e-commerce, but every business is different and the shopping world is in some turmoil. Accurate figures are impossible to obtain.

Field research

Big companies spend large sums on continual marketing research into their customers' attitudes and on evaluating the competition. Occasionally a secondhand report is available at a reduced cost that is not too out of date and is relevant to smaller concerns.

In this area of sales forecasting you will want to ask samples of your target audience basic questions covering future order levels, timing, value and response to price incentives, fresh packaging or changing promotional methods. By getting closer to your market segment and by regular updating you should not be caught unawares by any changes in market conditions. It's also a good idea to keep up to date with the trade press and to visit exhibitions.

The strategy

This part of the marketing plan will be your working tool where you list the actions to be taken through the year with expenditure, and monitoring for results. You can list leaflets to be printed, shows to attend, adverts designed and placed - all the marketing expenditure that will be incurred.

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