Consider two different techniques for creating qualitative f

Consider two different techniques for creating qualitative forecasts for the demand for a product: Sales force and Consumer survey. One has a ‘focus’ on the customers buying the product and one has a ‘focus’ on the people selling the product. Compare and contrast these two different views and some of the advantages and disadvantages that they will have for the firm’s manager.

Solution

Solution :

Qualitative forecasting methods are primarily subjective and they reply on human expertise and judgement . These methods are most appropriate when little historical data are available , like in the case of demand for new products or the estimation of sales from a newly developed Internet based electronic channel .

Sales force technique :

The sales force technique develops forecasts based on the belief that organization members closest to the market place - those with specialized product , customer and competitive knowledge - offer the best insights concerning short - term future sales . It typically works from the bottom up . Management consolidates sales people\'s estimates first at the unit level , and then at the regional level and finally nationwide to obtain an aggregate forecast of sales that reflcts all three levels .

The sales force approach has some weaknesses . Sales person recognize the role of their sales forecasts in determining sales forecasts for their territories , they are likely to make conservative estimates . Their narrow perspectives from within their limited geographic territories may prevent them from considering the impact on sales of trends developing in other territories .

Consumer Survey

A cnsumer survey gathers input through mail - in questionnaires , online feedback , telephone calls , and personal interviews to determine the purchasing intentions of a representative group of present and potential customers . This method suits firms that serve limited no of customers , but often proves impractical for those with large number of customers . Also , consumer surveys gather useful information only when customers willingly reveal their buying intentions . The disadvantage of this method is that consumer intentions do not necessarily translate into actual purchases . These surveys may help a firm predict short term or intermediate sales , but they employ time - consuming and expensive methods .