The organization and improvement of market forecasting

Quantitative forecasting techniques are not much used in organizations. Instead, organizations rely on the judgement of managers working close to the product market. Increasingly however, developments at the interface between marketing and operations require more accurate forecasting. Quantitative marketing models have that potential. Drawing on theories from the ‘diffusion of innovation’ literature and results on ‘the barriers to effective implementation’, this paper first considers those factors that should be included in any complete evaluation of market forecasting. Using this framework and based on detailed survey work in a multi-divisional organization, the paper then describes how this company produces its market forecasts, and the perceptions of its managers as to inadequacies in the procedures. Reasons are proposed as to why quantitative forecasting techniques are not effectively used. The paper concludes with a discussion of the causes behind the organization’s mismanagement of their forecasting activity and how these activities might best be improved.