Forecasting in Marketing Planning. Forecasting Performance of the Logistic Model and Applications of S-4 Model

Abstract

Forecasting role in marketing is to provide current and future market data, all interrelated into meaningful interpretation for action. Forecasting is a part of the decision making process and has become an important component in all marketing activities. Forecasting as a tool, provides marketing managers with data and information regarding projected sales volumes, sales costs, market shares and other areas of marketing planning and control. This paper examines these issues and proposes the long-term forecasting while illustrating their use in planning and strategy. The most important lesson we have been taught in the field of forecasting before the late 1970s, was that there are models which best fit available data and which of these model gives the best results. But in the last 2 decades the scope of forecasting has been expanded well beyond technical aspects, encompassing a much broader set of planning, decisionmaking and managing issues. The S-shape models until now could describe successfully new product life cycle only for the three first stages, excluding the decline stage. But maturity is the most important stage in a product life cycle, and it’ s crucial to calculate in which time in the future, the product is going into the decline stage. This paper presents a new model which estimates market potential and forecasts market penetration for all stages in a new product life cycle. This model is compared 11 times against four different growth models included LOGISTIC model. Finally the Logistic Model applied in three different annual time series with main goal the forecasting performance.KeywordsMarketing ForecastingProduct Life CycleLOGISTIC ModelS-4 Model