Sales Forecasting Forecasts, budgets and evaluations are critical for business for a few different reasons. The first is that it allows for better allocation of firm resources. By using forecasts, managers are able to ensure that the firm is able to meet demand where it exists, and not have resources being wasted where it isn't. New product managers may prefer to operate without forecasts, but the process of building a forecast can provide a lot of insight into the product's potential. Where that potential lies and how best to tap into it are two key components of the new product launch strategy. This is especially true in organizations with finite resources. The company may not be able to pursue all projects at all times, so as a result must make decisions about resource allocation. It is only possible to do this effectively with proper forecasts. Even outside of new projects, where the sales environment...

The marketing department in particular plays a key role in this task. Marketing is able to gather information through test marketing and surveys that can help the product launch team with all phases of the product marketing process. Insights can be provided as to distribution channels, target markets, the marketing message, most desired attributes, pricing and all other decisions. Some of these decisions will help to determine which products should be brought to market. Demand forecasts may be far less once the research has been analyzed, or the price point consumers want may be too low to earn a profit. The process of building…