Sales trend

Sales trend
Primary topic
Related topics
Methods and techniques

Sales trend represents development of sales in the specific company. It pays attention to systematic changes and unique variables. Usually it is data collected from company's sales analyzes and consumer surveys submitted in the form of a report to management of the company. This document helps during the most important decision making. Charts often appear in the report so that it is possible to visually estimate the trend and notice dependencies. The document can be created with an emphasis on one product or all products offered by the company depending on what is the reason of preparing a report. Cyclical preparation of the report is crucial for the company, because it corresponds to one of management functions - controlling.

Linear trend function\[y_t=a \cdot t+b\] where:

  • a - is a periodic growth rate
  • b - is a state of the phenomenon in the initial period (for t = 0)

\(a= \frac{ \sum_{t=1}^n ( t - \overline{t}) \cdot (y_t - \overline{y})}{ \sum_{t=1}^n (t- \overline{t})^2}\) and \(b= \overline{y} - a \cdot \overline {t}\)

Content of the report[edit]

Usually content of the report of sales trend is extensive and contains many, comprehensive information[1]. It contains the general company's condition (Current Company Status) in a competitive market. Than numbers, like: sales volume and revenues, and these data are collected in the form of a graph. It is believed that the report must cover a period of 3-5 years to be reliable. To show a long time trend, a longer period of time may be taken into account, for example from the time the product is placed on the market. Than it's a good practice to compare the numbers with all marketing decisions made to show dependencies and draw conclusions for the future. After graps, there is a place for description and conclusion[2]. Due to thus report, management may make many crucial decisions[3]:

  • withdrawal or change of essential elements of the old product
  • introduction of a new product
  • planning of the future product strategy

Other advantages of knowledge of the sales trend[4]:

  • it helps to estimate future company's revenues,
  • it may be it can be a determinant in making logistic decisions, like determining the demand for a product in a specific territory - an appropriate storage strategy,
  • in-depth knowledge of the sales structure may be crucial to be better than competitor,
  • relying on hard data helps to avoid mistakes.

Prediction of sales trends[edit]

On the market there are many firms, which attend to market research, competitive analysis and sales trends[5]. Company may use the effects of their work, or order a study that corresponds to the business profile. That kind of predictions might be helpful during determining the company's strategy or focusing on individual future projects. However, this should not be the only determinant of action, but only a clue[6].

Footnotes[edit]

  1. Gaddam J. C., 2013, p.3-10
  2. Gaddam J. C., 2013, p.3-10
  3. Beheshti-Kashi S., Karimi H. R., Thoben K. D., Lütjen M., Teucke M., 2014, p. 154-161
  4. Kern R., Ryk K., Nguyen N. T., 2011, p. 612-622
  5. Altshuler Y.,Pan W., Pentland A., 2012, abstract
  6. Aramaki E., Maskawa S., Morita M., 2011, p. 1568-1576

References[edit]

Author: Anna Włodarczyk