Sales trend

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

Usually content of the report of sales trend is extensive and contains many, comprehensive information. 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. Due to thus report, management may make many crucial decisions:

• 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:

• 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

On the market there are many firms, which attend to market research, competitive analysis and sales trends. 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.

Examples of Sales trend

1. Year-to-Year Sales Trend: This type of trend focuses on changes in sales within a year, comparing the sales of one year to the next. This type of trend can be used to identify long-term trends in the company’s sales performance.
2. Month-to-Month Sales Trend: This type of trend focuses on the changes in sales between each month. This type of trend helps identify short-term changes and can be used to identify potential problems in sales performance or opportunities for growth.
3. Product-Specific Sales Trend: This type of trend focuses on sales of a specific product or range of products. This type of trend can be used to identify changes in demand for specific products or identify potential problems or opportunities for growth in specific product categories.
4. Regional Sales Trend: This type of trend focuses on sales in different geographical regions. This type of trend can be used to identify regional differences in demand and can help to identify regional opportunities for growth or potential problems.

Advantages of Sales trend

A sales trend can provide immense information about the development of a company's sales and help to make the most important decisions. It has the following advantages:

• It allows to observe the changes in sales over a period of time and identify any possible trends. This helps to determine the effectiveness of marketing efforts and react quickly to any market changes.
• It can provide valuable insights about customers’ preferences and buying habits, helping to make more accurate sales forecasts.
• It can give a better understanding of the performance of individual products and services, allowing to identify areas with the highest potential for improvement.
• It can be used to analyze the effectiveness of sales promotion campaigns and adjust them if needed.
• It can help to compare the performance of the company to its competitors, allowing to adjust the strategy or pricing accordingly.

Limitations of Sales trend

Sales trend can provide a lot of valuable information to the decision makers, however, there are certain limitations that should be considered before relying fully on the data from the report. The following are the main limitations of sales trend:

• Sales trend doesn't provide a complete picture of the market, as it only takes into account the sales of the company. It doesn't consider the competition or other factors that can affect the sales.
• Sales trend relies heavily on past data and doesn't take into account any potential changes in the market. Therefore, it is important to also consider future trends and changes when making decisions.
• The accuracy of the sales trend report depends heavily on the data collected and the methodology used to analyze it. If the data collected is not comprehensive or up-to-date, then the report can be inaccurate.
• Sales trend can also be limited by the scope of the report. It is important to consider what is included in the report and what is not in order to make the most informed decision.

Other approaches related to Sales trend

To fully comprehend the Sales trend, it is important to consider other approaches related to it. These include:

• Analyzing the customer base: By understanding the customer base, businesses can identify the people that are most engaged and make sure that they are getting the most out of their sales. This can be done by analyzing customer data to understand the buying habits, preferences, and trends of customers.
• Implementing new technologies: New technologies can help to improve sales processes, such as by automating certain tasks or providing customers with more information.
• Analyzing competitor’s sales trends: Understanding the sales trends of competitors can help businesses to anticipate changes in the market and make sure that their own sales strategy is in line with what is happening in the industry.
• Evaluating pricing strategies: To maximize sales, businesses should analyze their pricing strategies and make sure that they are competitive in the market.

In conclusion, analyzing the customer base, implementing new technologies, analyzing competitor’s sales trends, and evaluating pricing strategies are all important approaches to consider when understanding the Sales trend. By considering these approaches, businesses can ensure that their sales strategies are effective.

Footnotes

Sales trend — recommended articles

Market potential — Market mapping — Sales history — Demographic variables — Market attractiveness — Business segment — Potential market — Allocated cost — Buying cycle

References

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Author: Anna Włodarczyk