Large commercial companies, those that always postulate as successful and those that generate very large sales averages, owe their success to the careful, methodical and effective design of a very important concept, which must be prior to any execution procedure by part of the company: Strategic Planning.
On the other hand, for this planning to be successful, it is important to make an extrapolation from the results achieved in the present in certain variables concerning sales and the market; This extrapolation or projection into the future is what is known as Forecast.
To study all the implications and requirements that must be taken into account to carry out a good Strategic Planning and establish correct Forecasts, four important specialized works on the subject are brought up: Fundamentals of Marketing, by William Stanton; Marketing (modern concepts and practices), by Shoell Guiltinan; Marketing Management, by Joseph Guiltinan and Paul Gordon; and the work Investigaciones de Mercados, by Paul Green and Donald Tull.
In each chapter there will be a complete breakdown of the appreciations of these authors about the concept of Strategic Planning, planning methods and criteria, strategy concepts, forecasting techniques, among other topics.
- STRATEGIC PANEACION AND FORECASTS ACCORDING TO THE WORK FUNDAMENTALS OF MARKETING, BY WILLIAM STANTON
1.1. PLANNING AS PART OF MANAGEMENT
Planning is part of the direction of a managerial process, which is applied to the Marketing program where three fundamental issues intervene: Planning, Instrumentation and Evaluation.
- Planning Set goals and design strategies to achieve them. Instrumentation or Realization. It requires forming the Marketing organization and staffing it. It directs its operation according to the Plan. Evaluation. This is in charge of analyzing past performance in relation to future goals and strategies.
1.1.1. NATURE OF PLANNING
Every organization needs to design general and specific plans in order to achieve the desired success. Managers must establish what they hope to achieve as an organization, and then draw up a strategic plan to achieve those results. Each department should stipulate its own plan.
Planning is deciding what to do later by determining how and when it will be. In Strategic Planning, the opportunities presented are taken advantage of and the dangers that lurk in changing markets are avoided; that is why it is used as a strategic tool.
1.1.2. BASIC CONCEPTS
Mission. It indicates which customer is served, what needs it satisfies and what products it offers; This statement generalizes the limits of the organization's activities. This statement should not be too long. The Mission is expressed in customer-oriented words.
Objectives and goals. They are desired results and must meet the following requirements:
- Clear and specific Formulated in writing Ambitious but realistic Consistent with each other Must be susceptible to quantitative measurement Must be performed within a certain period of time
| Weak Targets (Too General) | Appropriate Objectives |
| Increase market share | Increase participation from its current level from 20% to 25% in the following year |
| Improve the public image of the company | Receive, next year, recognition awards from at least 3 environmental groups or consumers. |
TABLE 1. Comparative table of styles of objectives: ambiguous and concrete.
Strategies And Tactics. A strategy is a general plan of action through which an organization seeks to achieve its objectives; some organizations may pursue the same goal, but employ different strategies to accomplish it.
A Tactic is a means by which a strategy is carried out. This is more specific than the strategy, covers shorter periods, and must coincide with and support the corresponding strategy.
| Strategies | Tactics |
| Target the promotion to males 25-40 years of age | 1. Advertise in magazines read by this group of people
2. Advertise on television shows that this group of people watches. |
TABLE 2. Comparative table of Strategies and Tactics.
Scope of Planning. It can be short term and long term. Long-term Planning includes issues that affect the entire company: Expand and decrease markets, production, product lines.
Short-term Planning (one year or less) involves mid-level managers and deals with issues such as deciding which target markets will or will not receive special attention and what your marketing mix will be.
1.2. LEVELS OF STRATEGIC MARKETING PLANNING
The planning of marketing strategies are carried out at three different levels:
Strategic Planning of the Company: This level defines the mission of the organization, establishes long-term goals and formulates general strategies to achieve them. It consists of four steps:
- Define the organization's mission Analyze the situation Establish organizational goals Select these strategies to achieve the goals
Strategic Marketing Planning. Senior marketing executives set goals and strategies for a company's market activities. This planning consists of five steps:
- An analysis of the situation is carried out in which it is examined to what point the marketing plan has reached, what results it has given and its future prospects. Marketing objectives are outlined. Its objectives are determined, which must be closely related to the company's global goals and strategies. Positioning and differential advantage are determined.: Positioning designates the image of a product in relation to competitor products and others sold by the same company. Differential advantage is any characteristic of the organization or brand that the public considers convenient and different from the competition. Target markets are selected and market demand is measured. A target market is a social market or organizations to which companies direct their marketing programs. A strategic marketing mix is designed. This is the combination of a product, how it is distributed, how it is promoted and its price. These elements will satisfy the needs of the target market and meet the marketing objectives. Such elements are:
5.1. Product. Throughout, you can include new products and exclude those that fail from the market; strategies are taken on the use of brands, packaging and other product characteristics.
5.2. Price. The strategies concern the dedication of the clients, the flexibility of the prices and the conditions of the sales.
5.3. Distribution. Strategies in the channels through which the properties of the products are transferred from the manufacturers to the buyers; system where the goods are taken to a product of purchase by the end customer.
5.4. Promotion. Strategies are needed to combine advertising, personal selling, and sales promotion; Decisions are made on each promotion methods. These promotional strategies occur in the final stage of a product life cycle.
Annual Marketing Planning. It is a schedule of activities to be carried out in the year for a specific product or specific department. These plans are individual for each type of market brand. In recent years, models have been designed that facilitate strategic, company and marketing planning. Here are some of them.
Strategic business unit. It is the division of a business organization and multiple products starting from the most important products or markets. These entities are called Strategic Business Unit, considered as SBU. For an entity to be classified as UEN it is necessary:
- Be an individually identifiable business Have a well-defined mission Have your own competitors Have your own group of executives with profit-making responsibilities.
The parent company of the Boston Consulting Group. This model classifies SBUs according to two factors: Their participation in markets relative to competitors and the industry's growth rate; When the factors are divided into high and low categories, four quadrants arise, represented in the categories of the important units or products. In addition, two additional factors are taken into account, such as cash needs and appropriate strategies. These four quadrants are:
FIGURE 1. Boston Consulting Group Matrix
- Large market shares and high growth rates characterize the SBUs. These require a lot of cash to stay competitive. Very aggressive marketing strategies are needed if they want to stay and gain market share. Cash Cows. They have a large market share and do business in industries with low growth rates. They are important because they support the other units that need more resources. Its marketing strategies try to differentiate its participation in the market, reinforcing customer loyalty. (Problem children) To it belong the SBUs that are characterized by having little market participation, but high growth rates in the industry. The strategies seek to create an impact on the market by showing a great differential advantage,to gain customer support.These SBUs have little market share and operate in industries with low growth rates. Marketing strategies seek to maximize profits by reducing expenses or promoting a differential advantage. Another option is to reduce the investment or cancel it.
General Electric Business Matrix. This model includes two factors:
- Market appeal. Some variables that define this factor are, among others, the market growth rate, size, degree of difficulty, to enter the number of competitors, etc. Business Position. Market share, size of strategic units, strength of differential advantage, etc. The SBUs are classified according to all weighting criteria as: High, Medium and Low.
FIGURE 2. General Electric Business Matrix.
- Investment Strategy. Quantitative resources must be allocated to these business units; requires aggressive marketing activities to strengthen and increase these units. Protection Strategies. Resources should be selectively allocated to the SBUs. This method helps the unit maintain its current position in the market that generates the cash needed by other units. Harvest Strategies. These units should not receive large resources and should reduce expenses to maximize the units. One action is to sell the SBU Reduction Strategies. This UEN does not have much of a future so they do not receive resources; the best solution is to cancel or sell them.
Porter's generic strategies model. Michael Porter, a professor at Harvard University, advises companies to evaluate two factors: Target Market Width and Differential Advantages; and also Select an appropriate strategy. This model recommends three options:
- Leadership in Global Costs. A company or SBU tries to develop a standard product at low cost to sell it cheaper than the competition. Differentiation. It is based on creating a different original product, with an unmatched quality and an innovative design, etc. So a higher price can be undertaken. Concentration on one segment. A company focuses on one part of the market and tries to satisfy it with a cheap and different product.
Porter indicates that financial success does not necessarily require a large market share. A company can be successful if it can satisfy a part of the total market very well.
FIGURE 3. Porter's generic strategies model.
Products and Markets growth matrix. In seeking growth, a company must consider both its market and its products. Then you must decide whether to continue what you have been doing more efficiently or whether to take risks in new ventures. There are four growth strategies:
- Market Penetration. A company tries to sell more of its products to its current markets. One support tactic is investment in advertising or personal selling. Market Development. A company continues to sell its current products to a new market. Product development. Create new products to sell in current markets Diversification. A company develops new products to sell in new markets. It is a risky strategy; sometimes it works, and sometimes it doesn't.
FIGURE 4. Growth matrix of products and markets
Evaluation of the Planning Modules. The weaknesses of the Planning models are:
- Excessive simplification. Each model bases its evaluation of market opportunities and decisions on only two or three factors. Possibility of placing a strategic business unit on a grid or selecting a strategy without having reliable information. The results of a model could used to contradict judgments, business criticisms, made by line managers.
The models also have strengths, such as:
- Simple Classification. Each model allows you to examine your UEN portfolio Detection of interesting opportunities and suggest which companies are risky Stimulation of a rigorous and constant evaluation of opportunities.
Planning models help executives allocate resources and design good business and marketing strategies.
1.3. THE FORECAST OF MARKET DEMAND
Forecasting Market Demand is estimating the sales of a product during a certain period in the future. The demand of the industries or markets is calculated; sales in their companies are subsequently predicted.
This forecast gives rise to several projections, which can refer to an entire industry, a product line or an individual brand. For a forecast to be understood and useful, it must be clear exactly what is being described.
The importance of this constitutes the foundation of the elaboration of proposals and operational planning in all its departments (marketing, production and finance).
1.3.1. TERMS THAT INFLUENCE FORECASTING METHODS
Market Factor. Object or element that exists in the market. It can be measured quantitatively; is related to the demand or good service
Market Index. It is simply a market factor expressed as a percentage or quantitatively related to some base figure.
Selling Potential. It is the potential part of the market that a company intends to reach under ideal conditions. This applies to the brand of the product.
Market share. Indicates the proportion of the total sales of a product during a certain period in a specific market captured by a company.
Sale Forecast. Estimate the probable sales of a product brand during a certain period in a specific market. Applying an established marketing plan, this type of forecast can be expressed in amounts or in units; This is based on a specific marketing plan for the product in question. These sales forecasts typically span one year. Although many companies review it monthly or quarterly, these are linked to financial planning, and annual reporting. Marketing goals and strategies, that is, the basis of the plan must be made before establishing the forecast.
1.3.2. METHODS TO FORECAST DEMAND
A sales forecast can be made by one method: Top Down, Top Down; o From Bottom to Top, Ascending. Using the Top-to-Bottom method, managers should:
- Make a forecast of general economic conditions Determine the market potential of a forecast Measure the Market Share that the company has or that it plans to capture Predict the sales of its product brands
For the Bottom-Up Method, managers follow a two-step procedure:
- To make estimates of future demand, they obtain information from the market segment or organizational units; estimates are incorporated to obtain a total forecast.
1.3.3. ANALYSIS OF MARKET FACTORS
The demand for a product depends on the behavior of some factors in the market. You have to determine what these factors are, and measure their relationships with sales activities; for this it is required:
- Select appropriate market factors Minimize them
Direct Derivation Method. It is to statistically analyze about a product on the market and its time, and to estimate its part of it; this method is simple and inexpensive.
Correlation analysis. It is a statistical improvement of the previous method, but in general this analysis measures direct leads on a scale of 0 to 1. This provides a more accurate estimate of market demand than direct derivation. This analysis has two major limitations:
- Not all marketers understand It Can be used only when the data is available (a history of industry sales spanning at least two consecutive periods, a history of the market factor that will be used when forecasting demand).
Survey of buyer's intentions. It consists of asking a sample of current or potential customers when they will buy the product at a certain price during a certain future period. Some companies use Consumer Groups and panelists.
Market test. It is a technique used to determine if there is sufficient demand for a new product. It also serves as a criterion for evaluating its features and other marketing strategies.
Analysis of previous sales. It is the percentage increase applied to the volume obtained in the previous year or to the average volume of the last years. This is a simple, inexpensive, and easy-to-apply technique.
Trend Analysis. It is also based on data regarding previous sales. This trend is more complicated because it is a type of long-term sales projection. This is calculated by a technique called Regression.
Participation of the sales force. It consists of taking the estimated information of all the sellers in their areas in a future period in question. The sum of these estimates constitutes the company's sales forecast; the sellers must have a direct participation in this matter and thus be willing to accept the sales quotas that arise from them.
Executive judgment. It consists of extracting opinions from one or more executives about future sales, and these are based on valid measures such as the analysis of market factors. The forecasts will be accurate. Sometimes these forecasts will be risky because they are based on simple guesswork or simple instructions.
DELFI method. It is named for the famous oracles that were made in the city of Delphi in Ancient Greece. Invented by the RAND Corporation for use in environmental forecasting, it can also be applied in sales forecasting, mostly used with products that are truly innovative or important technological breakthroughs.
- STRATEGIC PLANNING ACCORDING TO THE WORK OF SHOEL GUILTMAN
- STRATEGIC PLANNING
It is the process that top management uses to establish the direction of an organization for the long term. It provides the mechanism by which managers respond to threats and opportunities posed by the environment. This consists of four stages:
- Assessment of the situation. It is responsible for analyzing the environment of the organization and the organization itself. The environmental assessment identifies the opportunities and threats of the organization; by forecasting changes, they assess their significance for the organization, and prepare strategies to deal with them. Organizational assessment considers the organization's ability to respond to opportunities and threats. Organizational Mission.It is a statement of the fundamental purpose of the organization and, as such, provides an answer to the question: What business are we in? Missions establish managerial expectations about policies and organizational performance. A well-developed mission statement is sensitive to the forces of the environment and to be good it must serve the client's needs. Organizational Objectives. They are more important, long-term performance purpose statements that the organization wants to achieve. They are usually specified in terms of sales growth, leading position in a market, stability of sales. These form the foundation on which organizational strategies can be built. Organizational Strategies.They are long-term actions designed to carry out the organizational mission, and achieve long-term objectives. These are based on: All changes in the set of markets, which they will serve All changes in the types of products or services to be offered or in the level of effort applied to bring together the different markets.
Organizations can pursue growth or consolidation strategies.
Growth strategies. It shows four basic routes for the growth of the organization. These routes are:
- Market penetration. It seeks penetration by focusing its products on different existing markets, but expanding its level of efforts in significant. Product development. The organization serves the same basic market needs by modifying its product lines in order to cope with changing competitive offerings; better meet the needs of certain market groups. Market Development. It is a strategy that tries to find growth in new markets. Example: Expansion abroad of a company; find new uses for existing products Diversification. Includes new products and new markets. Businesses use it to generate continued growth, new technologies, and other resources.
Consolidation Strategies. There are four types:
- A company sells a business or product line to another company. This occurs because the company recognizes that there is a weak point between its mission and the competencies as well as the success requirements for that product.When a product or business remains a good element in line with the mission of the company, but has little or no no opportunity for growth. It is the reverse of Market Penetration. Part of the product mix is eliminated and the organization continues to serve the same market. It is the opposite of Product Development.The organization continues to offer the same product, but they change some markets, focusing on their strongest markets.
Selection of an organizational strategy. Selecting a strategy is not simple. This should be based on the information obtained in the Situation Assessment, the Mission and the organizational objectives. Managers will need to recognize that market penetration and product development will be appropriate if current markets are attractive and allow the company to achieve organizational goals.
If there are problems in current markets, especially degrowth, market development and Diversification are more appropriate. Some companies use organizational portfolio analysis when they have many different businesses or products.
Analysis of the organizational portfolio. It is used in companies with a large number of strategic business units (SBUs). This term applies to any type of business that is operated as a separate profit center within a large organization. The portfolio analysis is in charge of purchasing and contrasting the evaluations of the business situation and measures the future contributions applied to each unit.
The growth participation matrix. The growth rate of the market in which it competes, the relative share of the market, and the share of the market leader. The four SBUs of the participation matrix are: Stars, Cash Cows, Problem Children, Dogs.
- They are leaders in high growth market that help achieve growth objectives.Cash Cows. These are very profitable, but low in potential return. They can be used to support existing or new products. Problem children. They give high potential growth, because they are in high growth markets. Supporting market penetration or product development strategies must be developed to effect this growth.They are the most common candidates for consolidation strategies, because of slow growth potential and low market shares.
Business attraction force matrix in the market. It has the same purpose as the Porter matrix, but uses nine categories based on two sets of criteria: Market attractiveness and criteria that reflect the strength, and competence of the company of managers. They change these classifications of the business attraction force matrices in the market, taking into account their elevation in the relative importance of each criterion to arrive at composite evaluations.
- FORECASTS ACCORDING TO THE WORK “MARKET INVESTIGATIONS” BY PAUL E. GREEN AND DONALD TULL
- FORECASTS
Any activity aimed at an end in which future results are associated with uncertainty involves forecasting. This is not about whether to forecast or not; it's about what to forecast and how to do it.
There are two reasons why forecasting is necessary:
- The forecast that is made to help identify a problem. Forecasts are made to solve a problem.
It is often very difficult to identify the target of forecasts. There are several types of forecasts, including the Sales Forecast. They are made for each product and product lines. Also for the company's total sales. It is divided by geographical areas and by type of consumer. It is used to identify products from areas and sales that did not reach the expected level. This forecast is also used to establish patterns of behavior in the work to be performed.
It is assumed that any attempt to forecast the future based on past information is valid, and the phenomenon studied has some regularity in time and space, and this means that the rules to make an appropriate transformation need to be stable. To forecast, it must be done with real data to establish patterns. Some patterns include the following:
- It is as a total percentage of the company's sales, by product line and by product, by geographic area, by distribution channel, and by type of consumer. Sales and market share targets. For the company, as a whole, and per individual consumer. Sales Quotas. By geographic territory and by vendor, according to the type of marketing effort, by product line and by geographic area.
Decision makers see the future in many ways, dependent on the decision to unknown important events and the manager's desire to reduce uncertainties. The manager may wish to see the future in terms of equivalent certainty, which may be willing to assume only one possible outcome in conjunction with a specific course of action. The manager may also want to obtain forecasts in terms of a range of possibilities; it is based on notions of relative frequency in various probabilities. There are two approaches to forecasting sales.
- Derived forecast. It is done by estimating the potential market and then applying a forecast of the company's market share. Direct sales forecast. Forecast the company's sales directly.
Potential market. It is an amount of a service or product that could be absorbed during a specific period. There are forecasting techniques that are interested in potential markets, sales, and costs that share a common classification.
- Exploration techniques. These procedures use previous changes that occurred only in the variable of interest as the basis for future projections and their only variable is time. Correlation techniques. They use previous relationships between the variable to be forecast and other variables; The forecasting problem entails two main tasks: Quantifying the relationships between the dependent variables of the predictor variables. Predicting the values of the predictor variables as a necessary step before forecasting the dependent variable. Econometric techniques. They are commonly referred to as less empirical. This is based on some fundamental theories about the relationships in a set of economic variables.The parameters of the models are estimated through statistical analysis of previous data. Opinion survey techniques. They are probably the least formal of the procedures listed above. They are considered less scientific. It could more fairly be classified as less explicit; however, it can lead to a fairly accurate forecast, and can serve as an independent control of the rationality of forecasts derived from more explicit models. Experimental techniques. Test markets and warehouse control tests are widely used forms of field experiments to aid in forecasting new product sales.It could more fairly be classified as less explicit; however, it can lead to a fairly accurate forecast, and can serve as an independent control of the rationality of forecasts derived from more explicit models. Experimental techniques. Test markets and warehouse control tests are widely used forms of field experiments to aid in forecasting new product sales.It could more fairly be classified as less explicit; however, it can lead to a fairly accurate forecast, and can serve as an independent control of the rationality of forecasts derived from more explicit models. Experimental techniques. Test markets and warehouse control tests are widely used forms of field experiments to aid in forecasting new product sales.
Historical Analogies. The sales experience of a previous and similar product is sometimes used as the basis for the sales forecast of a new product. The extrapolation techniques are divided into potential market and sales forecasts. Also to forecast cost by correlation. It is used in relatively common correlation techniques.
Econometric techniques are divided into potential market and sales forecasts, and also cost forecasts, using econometric models. Opinion poll techniques are divided into potential market and sales forecasts, and also in a type of opinion poll procedure, the DELFI method is a simple interview with a group of experts about their opinions regarding when it may happen each of the events in a series of specific events that are in your field of expertise; generally each participant votes in secret, and the results are tabulated and displayed in groups so that participants can see what others have predicted. The cost forecast using opinion polls exists in the market share forecast.Market share is the percentage of industry sales made by the company in a given period. This means that customers purchase a specific product and the company determines the time in which this product can be purchased and how.
- STRATEGIC PLANNING AND FORECAST ACCORDING TO THE WORK OF MARKETING MANAGEMENT, BY JOSEPH GUILTINAN AND PAUL GORDON
- Planning
Mid-level management planning specifies how the corporate marketing plan will be implemented on a product-by-product basis, focusing on the sales and profitability of individual products, brands, or closely related product lines.
Analyzes of customer needs and competitor strengths are a critical part of mid-level management marketing planning. In planning, detailed actions are developed for the creation of products, advertising and other strategies aimed at responding to customers and competitors. The planning levels must be interdependent; Middle-level management planning must be consistent with the goals and resource allocation decisions made by top management in the corporate marketing plan. At the same time, this planning should be based on input from mid-level managers on product and market trends. The problems and opportunities the firm faces.
Basic steps of planning. Although Marketing Planning takes place both at the corporate level and at the middle management level, four basic steps are followed at each level, which are:
- Conduct a situation analysis. Decision makers must understand the current situation and trends that affect the future of the organization. Set Goals. Indicate the level of performance that the organization hopes to achieve, according to the reality of the problems and opportunities in the environment, the particular strengths and weaknesses of the firms. Develop strategies and programs. Decision makers must develop strategies Provide coordination and control. Organizational structures and budgets are the primary mechanisms for coordinating actions. The purpose of the control is to assess the level at which an object is Progressed and accurately pointed out. The causes of any failure to do so, so that corrective action can be taken.
Marketing management and the planning process. It encompasses all the decisions involved in the design and execution of the plans aimed at implementing the marketing concept, senior management and mid-level managers make marketing decisions and the decisions they make influence each other. An important result of planning is the development of product objectives that guide decision-making at the middle management level; Information on analyzing the situation for a given product and on the feasibility of developing a successful marketing strategy for a product is usually more detailed at the middle management level and should be communicated to upper management.
4.2. SALES FORECAST
These are estimates at future sales levels. They are used to make different decisions; however, there are important differences in the types and methods of sales forecasting. The two main ones of these are: those corresponding to industrial sales and company sales.
Industry sales forecast. Managers can use this to estimate total sales that are achieved with vendors in the relevant market. There are four basic uses:
- These indicate the expected growth rates in alternative markets, therefore they are useful elements in corporate marketing planning.The industry sales growth rate has an important influence on the intensity of competition, if the forecast indicates an obvious decline at that growth rate. Management will know that future earnings from the sale of the business must come from increasing its market share. Industry sales forecasts are also important to middle management. Knowing the future level of sales and the industry allows a firm to calculate the market share it requires to achieve its sales goals.In general, the growth rates of the industries exerts great influence on the growth of the company's sales as an important data for the sales forecast. Forecasts at the item level are most useful in the decision related to the production schedule and the transportation of goods to the distributors. The forecasts are made at the highest level of aggregation, sales of the company, they are the most useful for all the planning of the company. The initial sales forecast can come from senior management or fieldwork. There are three basic types: Time series Descriptive models Judgment approachesForecasts at the item level are most useful in the decision related to the production schedule and the transportation of goods to distributors. Forecasts are made at the highest level of aggregation, sales of the company, they are the most useful for the entire planning of the company. The initial sales forecast can come from senior management or fieldwork. There are three basic types: Time series Descriptive models Judgment approachesForecasts at the item level are most useful in the decision related to the production schedule and the transportation of goods to the distributors. The forecasts are made at the highest level of aggregation, sales of the company, they are the most useful for all the planning of the company. The initial sales forecast can come from senior management or fieldwork. There are three basic types: Time series Descriptive models Judgment approaches
The most frequently used techniques over a 3-month to 2-year horizon were exponential smoothing, executive opinion jury, sales force, regression, and linear projection analysis.
Forecasting methods based on time series. These are most useful when market forces are relatively stable within the forecast horizon. That is, if sales trends are not likely to vary due to economic changes, marketing actions or technologies, these models have the possibility of being reasonably accurate. These conditions are often encountered when short-term forecast horizons are required. They can also be found over longer periods of time in the case of technologically mature markets that are not very susceptible to the effects of economic fluctuations and are expected to reflect few major changes in marketing effort.
Forecasting methods based on descriptive models. Descriptive models such as multiple regression models are used when multiple factors impact sales. Multiple regression forecasts allow managers to incorporate the expected effects of any marketing variable that is controllable and possibly significant when forecasting the company's sales. The goal is to evaluate the relationship between these controllable variables and sales.
The costs of forecast errors. Companies that make products with a long life cycle and strong sales are less interested in the cost of forecast errors, because in these cases the forecasts are likely to be close to actual sales. However, when the sales forecast that management receives has a large standard error, managers need to consider the costs of overestimating and underestimating sales.
CONCLUSIONS
Establishing a comparison between the points of view of the authors of these four important works on the subject of Strategic Planning and Forecasting, the following conclusions are reached:
William Stanton's work is the most descriptive and the most detailed on the subject of Strategic Planning, which he considers as part of Direction, a process that also involves Instrumentation and Evaluation. Planning implies developing the concepts of Mission, Objectives and Goals, Strategies and Tactics, and also the scope of Planning. This author clearly establishes the difference between Mission and Objectives. There are three levels of Strategic Planning: company, marketing and annual planning, applying for the latter several models proposed by important companies such as General Electric, the Boston Consulting Group, and Porter. Forecasts are made based on the analysis of certain market factors, often with statistical techniques, or sometimes by direct judgment of the executives.
Shoel Guiltiman agrees in many ways with Stanton when it comes to strategic planning, but the focus he provides is organizational, thus defining the terms: Organizational Mission, Organizational Objectives and Organizational Strategies. On the other hand, this author defines two types of strategies: Growth and Consolidation. Most of the strategy selection methods described by him are the same as those defined by Stanton.
Paul Green and Donald Tull specialize in forecasting, who handle Sales Forecasting and Potential Market Techniques. Sales forecasts are defined by sector, that is, according to geographic areas, according to type of consumed, according to product lines, etc. On the other hand, the authors describe five Potential Market techniques, which consist of analyzing the results obtained in the present in the different market sectors to make future forecasts.
Joseph Guiltiman and Paul Gordon do not define the term Mission in the conception of Strategic Planning, but after analyzing the situation, the objectives are directly established, the strategies are designed and also coordination and control is provided in order to evaluate and correct any inconvenience that appears in the process of carrying out the strategies.
BIBLIOGRAPHY
- GREEN, Paul and TULL, Donald. Market research. GUILTINAN, Shoell. Marketing (modern concepts and practices). 3ed. Mexico, Englewood Clif, Prentice Hall, 1991. Pp495-525 GUILTINAN, Joseph, GORDON, Paul and MADDEN, Thomas. Marketing management. Strategies and programs. 6ed. Mexico, Mc.Graw Hill, 1998. STANTON, Willam. 10ed. Fundamentals of Marketing. Mexico, Mc.Graw Hill. 1994. pp48 - 109
