Home > Free Essays > Business > Marketing > Dr. Pepper Snapple Group’s Sales Forecasting
Cite this

Dr. Pepper Snapple Group’s Sales Forecasting Research Paper


Introduction

Forecasting principles are applied by companies to predict sales for a certain industry during a selected period with the focus on firms’ share in these sales depending on tendencies in the market. Dr. Pepper Snapple Group is a company that produces soft drinks, and it is one of the leaders in the beverage market of the United States. This company uses sales forecasts actively to determine production volumes for different periods and regions of the country (Lombardo, 2018). The purpose of this paper is to analyze the impacts of Dr. Pepper’s sales forecasts on other forecasts, explain the role of exogenous factors in forecasting, and assess prerequisites of good forecasts in the process.

Identifying the Sales Forecast

In 2017, Dr. Pepper increased its net sales to $6.7 billion that indicated a 3.9% rise in comparison with the previous year. A sales forecast predicted such increases because of focusing on developing an attractive product and package mix for customers and improving an advertising campaign. The company addressed the forecasted changes in sales with the focus on the 1% rise in the sales volume and the 3% rise in the bottler case sales volume in comparison to 2016 (“Dr. Pepper’s (DPS) Q4 earnings,” 2018). To predict certain outcomes based on forecasting, the company’s leaders chose a causal model to determine the number of bottles to produce depending on market trends and changes in customers’ demands.

Analyzing the Impact of the Sales Forecast on Other Forecasts

For Dr. Pepper and other firms, sales forecasts directly influence setting the budget for a year. Thus, sales forecasts determine volumes or resources and materials to be ordered from suppliers and labor to be hired additionally. If sales forecasts are not appropriate, a firm can face significant losses and waste resources. Overhead costs depend on sales forecasts because different sales volumes influence expenses associated with supplies, advertising, taxes, and insurance among others (Merigo, Palacios-Marques, & Ribeiro-Navarrete, 2015). Cash receipts and disbursements also depend on sales forecasts because unachieved goals regarding sales influence the amount of cash available for a firm’s operations.

Exogenous Factors and Prerequisites of a Good Sales Forecast

To develop sales forecasts, managers should aware of such exogenous factors as the country’s GDP, market and industry trends, inflation and unemployment rates, and interest rates trends among others. If economic conditions in the country, which are analyzed concerning GDP, are negative, this aspect influences consumers’ buying capacity and sales. Market and industry trends accentuate consumers’ interest in the product and changes in prices. Inflation and unemployment rates are also important factors to impact consumers’ readiness to improve their purchasing of a certain product (Trapero, Kourentzes, & Fildes, 2015). Interest rates trends influence sales mostly internally. From this perspective, the prerequisites of an appropriate sales forecast include the analysis of economic conditions in the country, market and industry tendencies, a company’s previous market share, the position of competitors, advertising and promotion results, changes in set prices, and studies on market trends (Kolassa, 2016). All this information is important to forecast sales while paying attention to the factors that can influence alterations in consumer behavior.

Conclusion

Sales forecasts are important for firms to determine what volumes of products to manufacture and what revenues to expect. If these forecasts are formulated inappropriately or are not based on the analysis of previous sales, it is possible to expect increasing costs and losses. Therefore, it is necessary to understand how sales forecasts influence other aspects of a company’s operations and its sales strategy, recognize factors that can influence purchasing trends, and become aware of prerequisites of an effective forecast.

References

Dr. Pepper’s (DPS) (2018). Web.

Kolassa, S. (2016). Evaluating predictive count data distributions in retail sales forecasting. International Journal of Forecasting, 32(3), 788-803.

Lombardo, C. (2018). The Wall Street Journal. Web.

Merigo, J. M., Palacios-Marques, D., & Ribeiro-Navarrete, B. (2015). Aggregation systems for sales forecasting. Journal of Business Research, 68(11), 2299-2304.

Trapero, J. R., Kourentzes, N., & Fildes, R. (2015). On the identification of sales forecasting models in the presence of promotions. Journal of the Operational Research Society, 66(2), 299-307.

This research paper on Dr. Pepper Snapple Group’s Sales Forecasting was written and submitted by your fellow student. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly.
Removal Request
If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda.
Request the removal

Need a custom Research Paper sample written from scratch by
professional specifically for you?

Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar

301 certified writers online

GET WRITING HELP
Cite This paper

Select a referencing style:

Reference

IvyPanda. (2020, November 25). Dr. Pepper Snapple Group's Sales Forecasting. Retrieved from https://ivypanda.com/essays/dr-pepper-snapple-groups-sales-forecasting/

Work Cited

"Dr. Pepper Snapple Group's Sales Forecasting." IvyPanda, 25 Nov. 2020, ivypanda.com/essays/dr-pepper-snapple-groups-sales-forecasting/.

1. IvyPanda. "Dr. Pepper Snapple Group's Sales Forecasting." November 25, 2020. https://ivypanda.com/essays/dr-pepper-snapple-groups-sales-forecasting/.


Bibliography


IvyPanda. "Dr. Pepper Snapple Group's Sales Forecasting." November 25, 2020. https://ivypanda.com/essays/dr-pepper-snapple-groups-sales-forecasting/.

References

IvyPanda. 2020. "Dr. Pepper Snapple Group's Sales Forecasting." November 25, 2020. https://ivypanda.com/essays/dr-pepper-snapple-groups-sales-forecasting/.

References

IvyPanda. (2020) 'Dr. Pepper Snapple Group's Sales Forecasting'. 25 November.

More related papers
Pss... Stuck with your
assignment? 😱
Support
Online
Pss... Stuck with your assignment? 😱
Do you need an essay to be done?
What type of assignment 📝 do you need?
How many pages (words) do you need?
What’s your deadline? ⏰ Let's see if we can help you!