Academic journal article The Journal of Business Forecasting Methods & Systems

One Size Fits All Forecasting

Academic journal article The Journal of Business Forecasting Methods & Systems

One Size Fits All Forecasting

Article excerpt

There was an old comedy routine where an unscrupulous retailer would sell an oversized suit to a gullible customer by facing him toward the mirror and exclaiming, "Great fit!"; while clutching a handful of jacket behind the customers back. This "one size fits all" approach to selling men's suits seems to have its counterpart in consumer products forecasting.

The need to communicate forecast data to various disciplines has spurred a number of forecast system solutions which do a great job of linking forecast results but offer limited approaches to deriving the forecast. System enhancements, such as the ability to drill down to geographic levels, provide a nice option but do not address the issue of incorporating the brand's marketing and selling strategy to improve forecast accuracy.

NUMEROUS MARKETING STRATEGIES

There are numerous marketing strategies based on a brands life-cycle position and competitive environment. There are also as many trade selling strategies such as EDLP, HI-LO, CRP, or convenience and variety positioning. With all this going on in the marketplace, it seems odd that forecasters are asked to project multiple brands and skus across various categories while using a choice of very similar statistical time series models.

Just as marketing strategies differ based on brands strengths and weaknesses, forecasting approaches have to be flexible enough to focus in on different methods of marketing as well as the different selling strategies employed by the trade. …

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