ABSTRACT
The syllabus for Section 3.3 "Forecasting information for marketing derisions' refers to The range of forecasting methods and tools that are available to develop forecasts, e.g. time series analysis, econometric forecasting, sates forecasts, decision trees, Delphi technique, cdflcal path analysis*. Specific areas of application of underpinning knowledge include: 3.3.1 • Financial forecasts based on sates forecast data 3.3.2, Decision frees to analyse the marketing options available 3.3*3 A critical path based upon fomcast data 3,34, Financial plans based upon forecast data 3.3.5 Distinguish between a forecast and a budget, Most marketing decisions follow a similar pattern, namefy:
1 The identification of a problem 2 Listing the alternative solutions 3 Gatfw the inaootai and non-financial data for each alternative solution 4 Decide on the ranking tests 5 Rank the solutions 6 Choose the alternative with the highest ranking 7 Verify the decision through feedback (to step 6),
Management information for marketing decisions requires the marketing manager to gather the financial and non-financial information in the decision-making model for a number of areas including forecasting. The focus of this unit is the forecasting of the sales revenue and its components of sales volume and sales price. We will be looking at forecasting, in particular sales forecasting. The importance of forecasting sales volume and to a limited extent sales price will be covered, although this will be covered later in unit 'Pricing'. Forecasting is also used in the area of expenses, both revenue expenditure and capital expenditure, however these areas will not be covered here. Of the functional areas of production, service, administration, personnel, accounting sales and marketing, the latter functional area will take the major responsibility for forecasting sales. Others may be involved but not to the same extent. A number of methods and techniques of forecasting will be reviewed to assess how they might assist the marketing department in preparing the sales forecast. Forecasting is different from budgeting, and this will be explained. There is also a separate unit on budgeting and standard costing. Sales forecasting is the starting point for a number of units, They are used in 'Marginal costing', 'Absorption costing', 'Pricing', Budgeting and standard costing and 'Capital budgeting'. Sales forecasting is a prerequisite to most of the above areas.
