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Demand forecasting
Demand forecasting
Demand forecasting
Demand forecasting
Demand forecasting
Demand forecasting
Demand forecasting
Demand forecasting
Demand forecasting
Demand forecasting
Demand forecasting
Demand forecasting
Demand forecasting
Demand forecasting
Demand forecasting
Demand forecasting
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Demand forecasting

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  • 1. DemandForecasting
  • 2. DEMANDFORECASTING:A demand forecast is the prediction of whatwill happen to your companys existingproduct sales.Demand forecasting is the activity ofestimating the quantity of a product orservice that consumers will purchase.Demand forecasting involves techniquesincluding both informal methods, such aseducated guesses, and quantitativemethods, such as the use of historical salesdata or current data from test markets. Itmay be used in making pricing decisions, inassessing future capacity requirements, or in
  • 3. Determination of the demand forecasts isdone through the following steps:1 Determine the use of the forecast2 Select the items to be forecast3 Determine the time horizon of the forecast4 Select the forecasting model(s)5 Gather the data6 Make the forecast7 Validate and implement results.
  • 4. Methods of forecasting1. Too much emphasis should not be placed onmathematical or statistical techniques offorecasting. Though statistical techniques areessential in clarifying relationships and providingtechniques of analysis, they are not substitutes forjudgment.2. Forecasting also should not be left entirely to thejudgment of the so-called experts.What is needed is some commonsense meanbetween pure guessing and too much mathematics.
  • 5. Various Methods of Forecasting Survey of Buyers’ Intentions Market Survey Studies.1. Delphi Method2. The Collective Opinion also called as Sales Force Pollingor Expert Opinion polls.3. Analysis of Time Series and Trend Projections4. Use of Economic Indicators – Regression Analysis andEconomic Model Building.5. Controlled Experiments – Test Marketing.6. Judgmental Approach
  • 6. Demand Forecasting- Cadbury
  • 7. Origin of Cadbury Cadbury is the brain childof John Cadbury Starting in form of grocerybusiness in Birmingham in1824 In 1853, Cadbury becamethe confectioner to theBritish Crown. Today Cadbury operateGlobally
  • 8. Cadbury Dairy Milk has been themarket leader in the chocolatecategory for years and hasparticipated and been a part ofevery Indians moments ofhappiness, joy and celebration.Cadbury India ltd. began itsoperations in India1948 by importing chocolates.After 62 years of existence inIndia Cadbury enjoys a valuemarket share of over 70%- thehighest Cadbury brand share inthe world.
  • 9. Cadbury India Limited is a fully ownedsubsidy of Kraft Foods Inc. withapproximately $50 billion, on 2ndFebruary 2010 Kraft foods has sealed itstakeover over Cadbury and haveoperations in more than 70countries.(bbc,2010)In India, it began its operation in theyear 1948 by importing chocolatesinitially. Today the company has fivecompany owned manufacturing facilitiesat Thane, Induri (Pune) and Malanpur(Gwalior), Bangalore and Baddi(Himachal Pradesh) and four sales unitsspread across the country.
  • 10. Cadbury plan their production process by using a time series method asthis helps Cadbury to accurately produce the needed amount ofchocolate at the correct period of time.A time series shows historical data that can be used and analysed topredict future trends.Festive Seasons are peak selling times for all chocolate manufacturesincluding Cadbury, this is obviously because chocolate products makegood gifts for these occasions.
  • 11. Time series analysis does not explain the casual relationshipbetween variables & how they will be in future also. It simplyassumes that past behavior of the variable will continue in futurealso.Hence time series analysis tries to find out the factors which affectthe behavior of the variable. The changes in the variable over aperiod of time are divided into 4components.They are: TRENDS SEASONAL VARIATIONS CYCLICAL VARIATIONSRANDOM FLUCTUATIONS.
  • 12. ADVANTAGES DISADVANTAGES The data helps Cadbury toreduce wastage and producethe amount of products thatcustomers would purchase The data is reliable ifcollected accurately. The forecast helps Cadbury tomake products efficiently as ithelps Cadbury to set a targetof the amount of productsneeded; there are alwaysenough products to supply tocustomers. Cadbury need to have a lot ofpast data in order for the timeseries method to be usedaccurately to predict salesfigures. If the external environmentdoesn’t stay stable then therewill be problems with theforecast for example if the pricesof the raw materials used toproduce Cadbury productsincreases then the price of theproduct has to increase in orderfor Cadbury to make a profitfrom the product produced. This may affect the customerspurchasing trends. The data maybe biased or representative.
  • 13. Independent variables affecting Demand of Cadbury DairyMilk: Price: This product is a brand loyal product, so if there is a slight increasein the price, the demand of the product will remain unaffected. But if thereis a decrease in the price, the demand of the product may slightly increase. Income: If the income of the people increases, the demand of the productalso increases and if the income of the people decreases, the demand of theproduct decreases because then people will go for lower price chocolatelike éclair or melody of Rs.1 or Rs. 2. So, there is a positive relationshipbetween income and the product demand. Consumer’s taste and preferences: Cadbury produced milk chocolatesby using the high quality of cocoa bean and the taste has still remained thesame which has touched the heart of the consumers. So, they will not liketo go for any other product. Competition: There are many competitors like Cadbury 5-star, NestleKit-Kat, Parle Chox, foreign chocolates (Chinese), Lot etc. In the marketso if the price of the competitors increases, the demand of the dairy milkalso increases. But if the price of the competitor’s decrease, the demand ofthe dairy milks not much affected by it.
  • 14.  Price of Complementary Goods: Cadbury dairy milk is made from the milk,sugar, cocoa bean and cocoa powder. If the price of these complementary goodsincreases then there will be no change in the demand. Because Cadbury dairymilk is a brand loyal product so there will not be any effect on the demand of theproduct. Population & Age group: This product is meant for the children, adults and alsofor the old people so the age groups are not much affected the demand of theproduct so demand remain same and by the increase in the population, thedemand of the product also increases. Advertisement campaign: Advertisement campaign has played a vital role inattracting the major part of the population towards the Cadbury dairy milk. Celebrations & Occasions: During the festivals and occasions, the consumptionof Cadbury increases because it’s a product for enjoying the taste of each andevery moment with harmony. Brand Image: The brand image of the Cadbury plays an important role in thedemand of the Cadbury. This product has built such a brand image that it hasmuch attracted the mind of the consumers so they will not like to switch over tothe other brand.
  • 15. Conclusion &Recommendations Demand forecasting is widely used by business firms to estimatethe future demand of their products & services. Business firmsuse historical or past date to explain future demand. The estimation of future demand helps the business firms toanalyze their production, distribution, selling, advertisement&promotional activities & the cost involved in covering theseactivities. Recommendations can be considered by business firms toenhance their performance in serving its customers the best. Customer’s complaints should be welcomed & handledeffectively. A quick response to customer complaint can bring apositive impact on part of business firms. Suggestions from customers should be taken into consideration.
  • 16. THANK YOU

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