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Entrepreneurial Planning — Entrepreneurship STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceEntrepreneurshipEntrepreneurial Planning4 Marks
Question
Which common techniques are required to calculate the forecasting income?
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Answer

Following are the most commonly adopted techniques for forecasting:
  1. Marketing research/ Market test method: A company may conduct a direct market test, and on the basis of its outcome, sales forecast is made. This method may be used either independently or as a supplement to other methods. It is used more frequently by consumer goods marketers. It may also be used by industrial goods marketers. When this method is used by industrial goods marketers, it is called a market probe.
  2. Industry sales/ Industry forecast: Under this method, a company estimates its sales by applying a certain percentage (based on past sales or expected sales) to the sales forecast of the whole industry. The sales forecast for the whole industry can be obtained from the Government or trade associations or other outside agencies. This method is very simple. Besides it is quick and less expensive.
  3. Survey of buyers’ intentions: Under this method of sales forecasting, first, a list of all potential or prospective buyers is drawn up. Then, a face to face interview with a selected group of potential buyers is conducted. On the basis of the interview, the buyers’ intentions are ascertained and an estimate of the sales of the products of the firm is made. This method is a practical method of sales forecasting. This method or approach is, generally, adopted by industrial marketers, i.e., marketers of industrial goods.
  4. Expert opinions: Under this method, the opinions of the experts are sought, and on that basis sales forecasts are made. The experts may be outside experts or top executives of the firm itself, such as the production executive, marketing executive, finance executive, etc.
  5. Financial data on similar start-ups.
  6. Some trial experience of self or others.

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