Question

Topic: Student Questions

How Do I Do An Estimate Of Sales Over 3year Period

Posted by Anonymous on 9/27/2008 at 6:43 AM ET 250 Points
hi im writing an 2nd year assignment and i have to write an estimate of sales for a 3 year period. Im abit stuck because i don't really know where to begin. How do I define my target sales goals and market shares?
The market is for absorbent minerals in New Zealand and my company is looking to enter the market. Currently the market is well developed and and there are four competitors:
Castrol Mop 45%
Houghtons Oildry 30%
BP Cleanup 15%
Shell Cleanforce 10%
All four sell their bag size at 20kg.

I don't know the market growth rate per annum.
If anyone could please help me out by telling me where I should begin and how much is a realistic market share target and sales goals for each year. Also do I estimate my market share to grow by the same amount every year for the three year period?

Generally if anyone could please help me estimate sales for a three year period?
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RESPONSES

  • Posted on 9/29/2008 at 1:12 AM Accepted
    If I read it right, you are a new player who is entering in a well developed market. Most likely, increase in sales and increase in market share would be low, due to the market's familiarization with the current players.

    1) However, if you have an aggressive approach on your objectives, and your company has the financial capability to compete head on with the current players, or your company already has a good brand image globally and the market is price sensitive, then maybe you can have a significant increase on the first and second year.

    2) If you are a new player with no global presence and no brand status on this new country, and the market has brand loyalty , then your sales and market forecast would be low and conservative. Your first year would be based on the percentage of the market that you think can be easily converted to your side. They may be the neglected market, who may lack the attention due to the sales capability that they can generate is low. You can target these small customers and start your word of mouth from there.

    3) You can maintain a conservative increase on the 2nd and 3rd year or you may not have an increase at all. It all depends on the company's objectives and long term vision of its presence in their new territory. What are your chances of getting an increasing market share every year? Are the competitors slipping down on their service and quality of products? Are there a lot of competitors who exit and enter this industry? If you cannot face head on the biggest competitor, why not aim for the market share of the smallest player in the market?

    I will wait for your reply first before I add some more.
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