Sales Forecasting in B2B Marketing | Top MBA college in Bangalore

Posted by Prof. Narayan Prasad On 09/09/2022 09:43:29

Industrial Marketing is also referred to as Business-to-Business Marketing Business Marketing or Organizational Marketing. 

Industrial Marketing or Business to Business (B2B) Marketing refers to the marketing of the products/services to Business Organizations such as Manufacturing  Companies, Government Undertakings, Private Sector Organisations, Educational  Institutions, Hospitals, Channel Partners such as Wholesalers, Distributors, Dealers  & Retailers.  

Business Organizations buy products and services to satisfy many objectives like the production of goods/services, solving problems related to product usage,  reducing warranty claims, making profits, reducing costs, and, so on. B2B operations involve business transactions conducted between one business and another, such as a wholesaler and retailers. B2B transactions tend to happen in the supply chain,  where one company purchases raw materials from another to be used in the manufacturing process. 

Business-to-Business transactions require planning to be successful. Such transactions rely on a company’s account management personnel to establish business client relationships. B2B relationships must also be nurtured, typically through professional interactions prior to sales, for successful transactions to take place. Traditional marketing practices also help businesses connect with business clients. Trade publications aid in this effort, offering businesses opportunities to advertise in print and online. A business’s presence at conferences and trade shows also builds awareness of the products and services it provides to other businesses. 

Forecasting is the process of estimating the future demand for our business  (sales/revenue) based on past & present data. Implementing a forecasting system enables you to assess current market trends and sales quickly so that you can make informed decisions about the operations. 

Forecasting is valuable to businesses because it gives them the ability to make informed business decisions and develop data-driven strategies. Financial & Operational decisions are made based on current market conditions and predictions of what the future looks like. 

Business Forecasting consists of tools & techniques used to predict changes in business, such as sales, expenditures, profits & losses. The goal of Forecasting is to develop better strategies based on these informed predictions; helping to eliminate potential failures or losses before they happen. 

In Forecasting, past data is aggregated and analyzed to find patterns and used to predict future trends and changes. Forecasting allows your company to be proactive instead of reactive. 

Forecasting can help your organization in : 

1. Setting Goals & Planning: Forecasting allows businesses set reasonable &  measurable goals based on current and historical data. Having accurate data and statistics to analyze helps businesses to decide what amount of change,  growth, or improvement will be determined as a success.  

2. Helps in Budgeting: Having visibility into potential trends/changes helps businesses to know where to allocate their budget and time spent on certain offerings such as products, services, or areas internally such as hiring and adjusting strategy. Budgeting quantifies the expectation of revenues that a  business wants to achieve for a future period.  

3. Helps anticipate change within the market: Having insight into not only current data but projections of what could happen in the future helps businesses to make adjustments to business strategy and alter current operations in order to change their outcome. 

Forecasting is the art and science of estimating & predicting what will happen in the future. Sometimes that is determined by a mathematical method; sometimes it is based on the intuition of the operations manager. 

Based on time horizons, Forecasting can be either : 

  1. Short-Term Forecast: While it can be up to one year, this forecast is usually used for three to six months. It is used for planning purchases, hiring, job assignments, production levels, and the like. 
  2. Medium Term Forecast: This is generally one to three years. Medium range forecasts are used for planning sales, production, budgeting & analysis of different operating plans. 
  3. Long-Term Forecast: Generally three to five years or more. It is used for new products, capital expenditures, facility expansion, relocation, R&D, etc. 

A Sales Forecast is not just about predicting sales. It is the act of matching opportunities with marketing efforts. 

Sales Forecasting is the determination of a firm’s share in the market under a  specified future. Thus sales forecasting shows the probable volume of sales. 

The two main methods of Sales Forecasting are : 

  1. Qualitative Methods of Forecasting 
  2. Quantitative Methods of Forecasting 

The Qualitative Methods are known as intuitive, subjective & judgmental methods of Sales Forecasting. These methods are used when it is little or no historic data on the demand for the product is available. Also, there may be changes in government policies, new innovations, changes in consumption patterns, etc.  Qualitative Forecasting is based on information that can't be measured accurately. When relevant sales data & accurate information are available, the sales managers use Mathematical or Quantitative Methods of Forecasting. 

A Sales Forecast is not just about predicting sales. It is the act of matching opportunities with marketing efforts. 

Sales Forecasting is the determination of a firm’s share in the market under a  specified future. Thus sales forecasting shows the probable volume of sales. 

The two main methods of Sales Forecasting are : 

  1. Qualitative Methods of Forecasting  
  2. Quantitative Methods of Forecasting

The Qualitative Methods are known as intuitive, subjective & judgmental methods of Sales Forecasting. These methods are used when it is little or no historic data on the demand for the product is available. Also, there may be changes in government policies, new innovations, changes in consumption patterns, etc.  Qualitative Forecasting is based on information that can't be measured accurately. When relevant sales data & accurate information are available, the sales managers use Mathematical or Quantitative Methods of Forecasting. 

Some of The Quantitative (Statistical) Methods of Sales Forecasting are : 

  1. Test Marketing  
  2. Time Series Analysis 
  3. Moving Average Method 
  4. Exponential Smoothing Method 
  5. Regression Analysis  
  6. Econometric Models. 

Some of the Qualitative Methods are : 

  1. Experts Opinion Method 
  2. The Delphi Technique  
  3. Sales Force Composite Method  
  4. Survey of Buyer’s Expectations  
  5. Historical Analogy Method 

 

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