The paper 'Factors to Be Considered When Designing Sales Territories" is a great example of a marketing assignment. Forecasting is a technique employed by businesses to estimate future aspects of the business. This is a critical management aspect for any business organization. The main role of forecasting in this context is to come as close as possible to an accurate future scenario. Forecasting is divided into two broad categories; qualitative and quantitative which are founded on the availability of historical time series data. Qualitative forecasting techniques These techniques employ expert judgment to come up with future forecasts; they are commonly used in scenarios where historical data is not available.
These methods are said to be subjective as they are based on the judgment and opinion of experts and/or consumers. Similarly, qualitative techniques are applied to intermediate or long-term decisions. Examples of these techniques include: Consumer/User survey method Panels of executive opinion Sales-force composites Delphi method Bayesian decision theory Product testing and test marketing Quantitative forecasting techniques These techniques are used when historical data on variables of interest are available; they are hinged on historical data with regard to the time series of particular variables of interest.
They are used to predict future data as a function of past data and are only appropriate for the availability of past data. These techniques are applied to short or intermediate-range decisions. There are two categories of quantitative techniques Time series analysis which comprises of: Moving averages Exponential smoothing Time series Zee charts Causal techniques which include: Leading indicators Simulation Diffusion models Advantages and Disadvantages of qualitative forecasting Advantages Qualitative forecasting techniques have the ability to predict changes in the sales patterns They allow decision-makers to incorporate rich data sources consisting of their experience, intuition, and expert judgment Disadvantages The ability to forecast accurately can be reduced when: Forecasters only consider readily available and/or recently perceived information Forecasters’ inability to process a large amount of complex information Forecasters being overconfident in their ability to forecast accurately There are political factors within the organization as well as between organizations Accuracy in forecasting can significantly be affected due to forecasters’ tendency to infer relationships or patterns in data when there are no patterns Future accurate forecasts may be reduced particularly when forecasters try to justify instead of understanding the forecast that proves to be inaccurate. Advantages and Disadvantages of quantitative forecasting Advantages Simplicity: it is simple forecasting method as compared to other forecasting methods that rely on qualitative data Reliability: given the fact that these techniques depend on existing data they are more reliable thus can be used in situations that have elements of predictability. Objectivity: quantitative forecasts are made based on available data and thus require less subjective interpretation. Precision: they allow precise forecasts about future trends; information can be manipulated in ways that are reproducible and consistent which on the other hand enables specific forecasts. Disadvantages Some forecasting elements cannot be presented numerically such as political and social variables Unavailability of quality data can hugely affect the accuracy of the forecast Spurious decisions can give a misleading impression of the amount of knowledge available on the issue in question Excessive formalization can result in decreasing levels of involvement by the participants.