What is Forecasting in marketing?
Forecasting in marketing is the process of estimating the future outcomes and planning specific targets keeping the trends in the current and future market in consideration. This can be done through a variety of methods, including statistical modeling, trend analysis, and market research in mind.
Characteristics of Forecasting
Forecasting is not driven randomly nor a marketing team can make random predictions for their future targets. Here are some characteristics of forecasting.
Forecasting in the marketing happens with the help and support of past data and current trends taking place in the market. Future demand estimation happens while keeping the organization’s products and services in the mind and customer behavior is targeted to build marketing strategies.
For the forecasting and prediction, data from web traffic, customer retention rate, customer acquisition cost, active time, social media growth, and more data sets are taken into account. Forecasting is important as it will help organizations to allocate their resources more effectively and make decisions with a clear focus in mind.
Types of Forecast in marketing
Here are some common types of forecasting in marketing:
- Statistical forecasting: Statistical forecasting is done with the help of historical data to predict future movements of market and activities.
- Analogous forecasting: In the forecasting with analogy, data from similar situations in the past is used.
- Causal forecasting: Causal forecasting is made while keeping the cause and effect relationship in the mind and future activities are planned.
- Delphi method: This approach relies on the opinions of experts to predict future activity.
- Market research: This approach uses surveys, focus groups, and other research methods to predict future activity.
Importance of Forecast
One of the most important aspects of marketing is forecasting. By understanding and predicting consumer behavior, businesses can more effectively allocate resources and create marketing plans that target specific customers at specific times.
This will not only help businesses to track the success of their campaigns, but will also help them keep a track of their efforts and make necessary adjustments in the execution.