GrassRoots Forecasting
The ‘grassroots’ is a method which base on the concept of asking the people who are close to the eventual consumer, such as sales person, each member of the sales force report the trends of their own region, until the entire forecast is built up, therefore it also call “Sale Force Forecast”. The benefit of this is that a broad survey might miss out some important detail problems, however, a very detail survey or technical study about the data might cost much and can overlook current market trend. The personal connection in grassroots method can bring out the suggestion about what consumers will think about the product. Since this is a “Bottom-up” method which involve the people who are closer to the actual market, the prediction should perform better than a “Top-down” forecast.
Against to the advantages there are also quite a lot of problems, the most concerned one which is the the potential accuracy of this method, since it is a highly subjective and relies on the opinions being correct. Allowing each level to add on a safety margin, might lead to an over-optimistic result, especially when there is no self-interest is involved, like link the forecast with sale quotas. (Lancaster G and Lomas R, 1985)
Grassroots method obviously is a resource consuming method, it required a large amount of time and manpower, however, as these two factors become larger, the bias might also increase. It it a simple and convenient method for large mature firms to get a rough prediction, since they have enough human resources, experience sale personnel and the possibility to build up a good incentive system.
But in general term, for those normal companies, instead of putting the energy in training the sale people to make a rational forecasts or build up a system, it might be more profitably to focus on the task of actual selling.
Copyright © 2015 | University of Warwick, Coventry | [email protected]
POWERED BY KASPAR CHEN