Marketing Management in the Global Environment

Part A


With contemporary age, marketing environment is changing rapidly and so the business environment is becoming extremely complex and multifaceted. It is mainly due to the introduction of information technology in each and every aspect along with the economic crisis and global competition. However, in order to cope with these above mentioned factors, it’s extremely essential for an organization to offer more concentration over the concept of innovation (Harmsen et al. 2008). Innovation is considered as one of the most important technique to satisfy the changing requirements of the customers by offering unique product and services. This strategy might prove effective for an organization to enhance its position and competitive advantage in this contemporary market scenario.

1.0 Implementation of different methods of commercial organization

Sustaining the position and reputation in the market is a quite tough job. It may not be retained depending on the past achievements and recognitions, as it might create a troublesome situation for the organization in near future. However, in order to enhance the competitive advantage, the organization needs to offer greater attention to the technique of innovation.

As per Dwyer & Mellor (2008), innovation is defined as the implementation of inventive ideas and thoughts to develop better products or services to satisfy the changing requirements of the customers. However, the process of innovation is a blend of numerous efficient and advanced technologies, ideas, concepts and processes. Hence, due to the presence of these elements, innovation is considered as one of the catalyst for enhancing the growth and market share of the organization in this age of extreme competitiveness (Dwyer & Mellor, 2008). Apart from this, innovation also helps in the improvement of productivity, profitability, efficiency and equity as compared to many other rival players. However, in order to accomplish such positive requirements, most of the commercial organizations like Sainsbury Plc implemented this strategy of diffusion of innovation, within the farming segment. Adoption of the innovation or emerging technology as shown in figure 1 of appendix would surely improve the market share and brand image of the organization by surpassing the current technology (, 2014).

Apart from innovation, acquisition is also considered as another important technique in this age to amplify the profitability and dominance, by taking over the reputation and operation strategies of another organization. By doing so, the brand image and position of the organization might surely get enhanced resulting in amplification of its growth and sustainability as seen within Tesco Plc after acquisition of Adminstore in 2004 (Dwyer & Mellor, 2008). 

1.1 Explanation of the term: Innovation

In order to sustain in this complex world, innovation is the most essential requisite. This is because; innovation helps an organization to enhance its business prospects and market share. Being an intangible aspect, innovation helps to improve the productivity and performance of an organization. Thus, it might be clearly stated that innovation results in improvement of tangible performance. Although, innovation enhances productivity, still it includes certain risks and threats (Dwyer & Mellor, 2008).

New to the world:

The term, “new to the world” is offered extensive weightage by the organization, operating in this complex age. This is because; it helps an organization to survive or die. Keeping this fact in mind, most of the retail players develop varied types of inventive products or services. Although the strategy of innovation presents positive results, but it may offer negative impact as the innovative products are entire new for the target customers. Hence, these inventive products may not be preferred by them and the organization may not meet the expected profitability improvement (Harmsen et al. 2008). However, in order to cope up with such a complicated scenario, most of the organizations try to implement varied types of ‘out of the box’ modern technologies. With the help of these technologies, an organization tries to satisfy the changing needs of the customers in an effective way, thereby improving its profitability and market value (De Brentani, 2010).

Continuous innovation:

Sustainability is a tail word, but it might be achieved with the help of continuous innovation strategy. In order to sustain in this competitive scenario of extreme financial downturn, constant innovation is the only method of success. However, in order to retain the position and leadership among numerous rival players, dynamic constant innovation might be the most effective strategy. However, as the procedure of innovation is entirely based on predictions or forecasts therefore, it may not offer calculative results in future. Hence, the entire revenue sends over the elements of innovation may not be accomplished in an effective way. This means ROI ≠ expected return from capital invested on innovated technologies. Hence, in order to attain an expected return on investment, the organization needs to undergo extensive discussions and planning’s. Only then the implemented technology might prove effective results.

1.2 Theory of the diffusion with population model of Rogers

Although, globalisation, increased the level of demand and competitiveness of the products, but it may be substantiated with the help of the strategies presented within the theory of diffusion of innovation (Cooper & Kleinschmidt, 2008). 

As per Everett Rogers, diffusion of innovation tries to explain the intensity in which, the new ideas are adopted by the individual of diverse cultures. Diffusion of innovation is considered as a decision making procedure, comprising of five stages such as adoption, persuasion, decision, implementation and confirmation as presented in the below figure 2 of appendix.


This is the first and initial stage of diffusion of innovation theory. In this stage, the individual gets exposed with the inventive product or service. However, due to lack of information and facts regarding the benefits of the innovation, the level of inspiration and stimulation of the individual is extremely low. In order to cope up with such turbulent situation, most of the organizations in this contemporary age, try to enhance the level of information through extensive promotional and marketing campaigns. By doing so to the maximum extent, the organizations tries to make the target customers aware about the benefits of the products in order to increase their profitability and demand (Calantone et al. 2010).


At this stage, the interested customers try to gather relevant information regarding the innovation. Hence, most of the organization, in this stage tries to focus on concentrated marketing techniques in order to distinguish the features of the invented product from others.


The third stage deals with decision making and it’s extremely difficult in nature. If the customers are interested and well aware about the benefits of the invented product, then they might try to accept it. On the contrary, due to lack of information, rejecting might also take place. However, in order to attain positive results, extensive advertising is offered in order to create a unique sensation within the minds of the customers (Calantone et al. 2010). 


In this phase, the customer tries to analyse the usefulness and benefits of the inventive products as compared to other rival products. If the customer gets satisfied with the underlining features of the product, then their level of reliability and loyalty enhances to a significant extent. Due to this, most of the organizations, implements the features after analysing the demands and preferences of the customers (Cooper, 2010).


In this stage, the customers interpret respective decisions regarding the invented products, by retaining with it. Then, the organization evaluates its rate of productivity and profitability in the market among other rivals. However, the entire process of adoption of the inventive ideas and technologies is directly linked with the elements such as innovation, communication channels, time and social system (Cooper, 2010). On the other hand, if all these elements fail to present the information within accurate time, then the level of sharing of information and facts might get decreased. Hence, due to lowest sharing of information, the level of adoption of the inventive technologies and ideas might get reduced, thereby decreasing the demand and profitability of the organization as shown in figure3.

1.3 Marketing mix and Diffusion of innovation

New product development:

Development of new product seems extremely easy, but at times it may create a distressful scenario for the organization (Barney, 2010). The success of a new product is entirely dependent over the five stages of the theory of diffusion of innovation. This is because; the inventive product might prove effective for the organization, only if it enhances the demand and trust of the customers. However, in order to increase the confidence and trust, sharing of actual information and facts is extremely essential. As a result of which, the satisfaction level of the customers enhances thereby increasing their acceptance power as shown in figure 4 of appendix.

Marketing communication:

In the case of marketing communication, the information and facts need to be shared on time. Only then the level of knowledge and benefits within the minds of the customers might get enhanced resulting in persuasion and decision making. Thus, acceptance of an innovative product is entirely dependent on communication strategy of marketing that increases the portfolio and equity of the organization (Calantone & di Benedetto, 2008). Thus, the organization might design the communication strategy after analysing the craze of the time –period.


Prior to designing a pricing strategy an organization need to undergo an extensive market research, to gather information regarding the strategies adopted by the rival players.  After designing the strategy, the organization needs to calculate the time-span required to accomplish, break even point as well as the minimum cost of production, in order to make it worthy in future era. Only after this information is achieved, the management level of the organization may confirm the pricing policy (Barczak, 2010).

1.4 Opinion leader theory and two step model of communications

Opinion leaders are considered as the most influential members within a community, society or group. These members are extremely educated and try to offer varied types of information, knowledge and advices to the lower members of the society. The opinion leaders are extremely tactical in nature and try to accept the ideas and thoughts of others as well. Due to these causes, opinion leaders are highly accepted by others. On the other hand, two step model theories decipher that the opinion leaders views and interprets the messages presented by mass media in an effective way and then passes them to other members of the society in their own way as shown in figure 5 of appendix.

1.5 Application of diffusion theory in consumer markets

The consumer buying decision is entirely dependent over the diffusion theory of innovation. For example: purchasing decision of Harley Davidson is highly influenced by the five stages of the theory of innovation of diffusion. Firstly, customers try to gather knowledge regarding the benefits of the product (Harley Davidson) from various communication channels. Then, after attaining a lot of information, the interested customers try to accomplish relevant facts and knowledge, about the features of the product. Relevant information may inspire or motivate the customers towards purchasing the product and if it satisfies the individual, then he accepts it in the long run. Hence, from the above mentioned example, it may be clearly revealed that consumer buying behaviour is entirely dependent over the information attained in varied stages of diffusion of innovation (Balbontin et al. 2011).

1.6 Application of diffusion theory in B2B markets

The theory of diffusion of innovation is also applied in situations of B2B markets. In B2B markets, the small business firms try to adopt the strategies implemented by large firms or opinion leaders. For example: a reputed retail player like Tesco Plc tried to adopt the strategy of loyalty or discount cards for the customers. With the help of this strategy, the demand and profitability of the products increased. Similarly, a small grocery firm (early adaptor) also tried to implement a strategy of discounts on bulk purchases. This strategy proved extremely effective for the early adopting firm that enhanced its position and dominance within the society (, 2014).

1.7 Critical evaluation of the usefulness and application of the diffusion model in B2B markets

B2B market scenario is extremely competitive and therefore the application rate of diffusion of innovation is extremely high. In B2B marketing, most of the customers try to purchase the product, after analysing its benefits as compared to other rival players. Moreover, they wish to interpret whether the product satisfies the underlining desires effectively. Only then, the buyer purchases the product from B2B markets (Balachandra et al. 2008).


Conclusively, it might be revealed that the theory of diffusion of innovation acts as a cornerstone in enhancing the position and reputation of the organization. However, in order to do so, relevant information and facts related to the features of the product is extremely essential. Otherwise, the decision-making process may not prove effective for the organization in this age. 



Part B:


Sales forecasting can be deemed to be an essential and common tool for businesses for planning, marketing and general management decisions.  Adya & Fred (2010) determined that sales forecasting is a projection of expected customer demand for products and services for a certain time frame and with underlying assumptions. Ding so will help the marketers to forecast the future demand for products and services and accordingly devise policies at present to meet the future expectations. However, Armstrong & Terry (2011) mentioned that sales forecasts are often prepared using different methods and for different purposes, but sales forecasts are dependent on market forecasts. Nevertheless, sales forecasts are supposed to be undertaken using a specific and effective method to help be sure of the future market demand and thus ensure future market sustainability.

1.0 Nature and importance of sales forecasting:

Armstrong (2007) referred that sales forecasting is the planning tool that assists the management in its venture to cope with future uncertainty. However, sales forecasting is mainly undertaken based on the data from the past and present analysis of the trends. As have been discussed that sales forecasting holds significant relevance in  the contemporary market setting as in absence of the present process,  businesses might not be able to forecast the future product demand thereby loosing market sustainability. In support of the latter statement, Batchelor & Pami (2008) determined businesses are compelled to undertake sales forecasting in order to effectively plan their investments, launch new products and to decide when to close or withdraw products. Doing so is thus considered to be helpful with regards to experience an ROI (Return on Investment) from the perceived sale of products and services.

However, Crone et al. (2011) criticised that sales forecasting is the difficult management area that often turn wrong as a result of an incorrect choice of forecasting tools and methods. Thus, in order to effectively undertake sales forecasting method, small as well as large firms could resume it with certain basic assumptions based on management’s experience, knowledge and judgement. Thereafter, it could choose among the relevant sales forecasting models suitable to undertake the process in appropriate and authentic manner.

In order to be sure of successful current and future operation, sales forecasting can serve the following two purposes:

  • Revenue forecasting: Required to pre-plan the budget, sales plan and gross profit forecasts.
  • Volume forecasting: Required to advance the supply chain to meet customer demand with optimal use of company resources. Dangerfield & John (2008) also added that volume forecasting is required for forecasting the sales and future operational process besides undertaking supply chain plan such as capacity planning, procurement planning and raw materials forecasting and purchasing.

Although several practitioners have stated that none can forecast future market conditions, yet sales forecasting process is considered effective to advance from current market position.

1.1 Uses of forecasting information:

 A rather limited viewpoint for sales forecasting would to relate its necessity with predicting future performance based on the available information’s regards past performance. Sales forecasting is required for undertaking budgetary decision making that includes: sales budget, material budget and staff budget. Fildes et al. (2009) elaborated that the sales budget reflects the targeted sales revenue that is concerned with improved selling efficiency and reducing sales costs However, the necessity of undertaking sales budget decision making is common for both medium and large scale organizations. For example, by undertaking sales budget, firms would be able to:  forecasts its breakeven, target and projected sale. Gardner (2008) also mentioned that the sales budget includes detailed sales by product, location, customer density and seasonal sales pattern. A typical master budget component has been illustrated in the appendix. Although preparing the sales budget can be a time inclusive process, yet sales budget is effective in revealing the areas/products in which the company is required to strengthen.

Sales forecasting is even required to identify the material and staff budget. Gorr et al. (2009) referred that material budget is significant for calculating the material that must be purchased by time period in order to fulfil the production budget. Depending on the sales forecasts, a firm can predict its material budget and accordingly allocate funds for its future material purchase. Similarly, sales forecasts are even effective in undertaking staff, budget as expected sales serve as a strong determinant factor for judging the required human capital. Although, Green (2005) referred that incorrect sales forecast can result in incorrect decision making, yet the same can serve the purpose of being preventive of future uncertainties and experience success.

Business owners often find it useful to separate the planning process into phases. The short, medium and long term planning process helps managers in different planning based on time frames of inputs and perceived outputs. Green & Armstrong (2011) determined that short-term plan usually involves processes that shows results within a year while medium term might take several years. However, long term planning includes goal setting for usually five years or more. Although, market conditions keep altering and it is difficult to plan for long or medium term perspective, yet the process is considered to be effective for devising sustainable market policies based on timeframe. However, sales forecasts on a long term basis are supposed to be done on reaching the medium-term targets.

 1.2 Use of budgetary control for managing organizations:

Only devising a budget do not serve the purpose as organizations are required to have a system of budgetary control. Makridakis & Michèl (2010) mentioned that budgetary control is a systematic organizational control in developing standards and targets regarding income and expenditure.  The process is also inclusive of periodic monitoring and adjustment of performance against them. Although the procedure to be followed during budget preparation and control might differ from several businesses, yet a general pattern that is in use by the firms include: formulation of policies, preparation of forecasts, and preparation of budgets and forecasts combinations (Dangerfield & John 2008). For example, several larger firms such as Asda often operate on multiple tasks.  The firms have to set budget regards several activities to prevent overshooting of expenses and experiencing lower revenue.  Budgetary control in such cases is significant for: effective utilization of forecasting techniques, fix responsibilities of the departments and ensure effective utilization of the company’s resources. Although, no-one can exactly predict the future and thereby ensure the present budgetary control process that would serve as effective even in the future, yet its periodic functionality is considered to be helping in limiting excess cash outflow.

Iconic firms often derive sales budget from the master sales forecast. In other words, their budget is disaggregated on the basis of area, product line, customer, size, time of year and season.  Batchelor & Pami (2008) determined that although subdivision of the budget is considered to be time consuming and difficult to keep track, yet budgetary control on each activity can effectively be maintained. The chances of overlooking any necessary operational details can be prevented.    

1.3 Ways to produce sales forecast:

Sales forecast can be difficult for businesses not having nay past history. Nevertheless, there are several approaches that can be followed for the purpose of correctly undertaking sales forecasts (refer to appendix to find its process).  In this context, Adya & Fred (2010) identified that in order to produce better sales forecasts, sales leaders are required to: have a sound knowledge of the sales strategy, understanding of buyer behaviour, milestone driven pipeline process, and continual improvement. It can be stated that by following the latter principles, businesses accurately forecast its future sales results at the same time support strategic decisions and determine the resource allocation process.

Contradicting the latter sales forecast process; Batchelor & Pami (2008) mentioned that most sales forecasts are inexact as managers do not follow sales forecast policies that are accurate.  A strategic sales forecast process necessitates the use of: separate numbers, maintaining a flexible process, use of consistent model and remain focussed on expectations. Doing so is considered to assist the planners deriving sales forecast results that are accurate and dependable to undertake current and future market decisions.

Contrary to the sales forecasting methods, two common forms of forecasting process involve: quantitative methods and qualitative methods. Adya & Fred (2010) noted that qualitative methods are applied where the key trends and developments are difficult to the perceived or indicted and similar data are not available. It takes into account factors such as running a promotion. By using qualitative forecasts, a business owner would predict the increase in sales for using coupon as a promotional process in place of running advertisements. The commonly used qualitative sales forecast process includes: jury of executive opinion, the sales force opinion method and survey of buyer intentions (Adya & Fred, 2010).  Although at times executive opinions cannot be highly dependable as there are chances of biased decisions, qualitative methods are helpful in events where past data are not available.

Batchelor & Pami (2008) attributed that quantitative methods represents developments numerically and are useful in sales forecasting about longer developments.  The current method is used for making projections regards the future and uses numerical facts and prior experience to predict the upcoming events. Dangerfield & John (2008) criticized quantitative method by stating that few factors cannot be represented graphically. However, in support of the current method, it can be stated that the same uses systematic ways to produce trend extrapolations and other forecasts. Market test, trend projections, exponential smoothening method, moving averages and regression analysis are methods used for sales forecasts using quantitative techniques.

1.4 Time horizons:

Sales forecasting is supposed to be undertaken keeping in mind the time duration for which the process is being worked out. Although sometimes it is not possible to forecast few things in advance, the predictability of the events or a quantity is dependent on factors such as: how effectively the influence of the factors is understood, the available data and whether the intended forecast would reveal expected results. Nonetheless, the time horizon for sales forecasting is crucial to be primarily decided as it determines the applicability of forecasting activities. The time horizon of the forecast is classified underneath:

Description Forecast Horizon
Basis Short range Medium Range Long Range
Duration Normally less than 6 months, maximum of 1 year 6 months to 6 years More than  6 years
Applicability Job scheduling and worker assignments. Sales and production planning, budgeting  New product development, facilities planning.


Table 1: Time horizon of forecasts

(Source: Green, K. C., 2005, p. 472)

The chosen duration of forecasting determines what exactly is the firm intending to forecast. It would be rather incorrect to forecast long range activities within a period of 6 months to 1 year. Thus, the time horizon is a crucial determinant factor to state the exact elements to be planned in advance and accordingly frame policies for its achievements. Batchelor & Pami (2008) however, criticised the inclusion of time horizon in the planning process by stating that market structure is highly volatile and thus difficult to state that a specific task is sure to be completed within short range and the rest will take medium term.

It has already been descried that qualitative and quantitative are two sales forecast methods. While qualitative is descriptive by nature, quantitative can be measured by using the under mentioned few processes:

Time Series Forecasting method: Description
Moving Average Method It is used where little or trend is present in the data. It even provides an overall impression of the data over time.

Simple Moving Average:

Equation: F4 = [D1+ D2+ D3]/4


D: demand

No.: number of period.


Weighted Average method:

Equation: WMA 4 = (W) (D3) + (W) (D2) + (W) (D1)

WMA: weighted moving average

W: weight

D: Demand

No: Period

Exponential Smoothing It is an average method that incorporates recent change in demand by assigning a smoothing constant to a most recent data.

Ft + 1 = a D t + (1-a) F t

Ft +1 = forecast for the next period

D t = present demand

 F t= previously determined forecast for the current period


Table 2: Time Series forecasting method

(Source: Green, K. C., 2005, p. 476)


Herein the significance and process of undertaking sales forecast have been detailed. The several sales forecast process have been justified besides also referring to two of the most commonly used technique. By using the recommended sales forecast process, any firm can be aware of future products demand and ensure long term sustainability.



References for Part A:

Balachandra, R., Brockhoff, K. & Pearson, A.W. (2008), “R&D project termination decisions:processes, communication, and personnel changes”, Journal of Product Innovation Management, 13(3), pp. 245-56.

Balbontin, A., Yazdani, B., Cooper, R. & Souder, W.E. (2011), “New product development success factors in American and British firms”, International Journal of Technology Management, 17(3), pp. 259-80.

Barczak, G. (2010), “New product strategy, structure, process, and performance in the telecommunications industry”, Journal of Product Innovation Management, 12(3),pp. 224-34.

Barney, J.B. (2010), “Firm resources and sustained competitive advantage”, Journal of Management, 17(1), pp. 99-120.

Calantone, R.J. & di Benedetto, C.A. (2008), “An integrative model of the new product development process”, Journal of Product Innovation Management, 5(3), pp. 201-15.

Calantone, R.J., Schmidt, J.B. & di Benedetto, C.A. (2010), “New product activities and performance: the moderating role of environmental hostility”, Journal of Product Innovation Management, 14(3), pp. 179-89.

Cooper, R.G. & Kleinschmidt, E.J. (2008), “The impact of new product strategies”, Industrial Marketing Management,12(4), pp. 243-56.

Cooper, R.G. (2010), “The impact of new product strategies”, Industrial Marketing Management, 12(4), pp. 243-56.

De Brentani, U. (2010), “Success and failure in new industrial services”, Journal of Product Innovation Management, 6(4), pp. 239-58.

Dwyer, L. & Mellor, R. (2008), “Organizational environment, new product process activities, and project outcomes”, Journal of Product Innovation Management, 8(1), pp. 39-48.

Harmsen, H., Grunert, K.G. & Bove, K. (2008), “Company competencies as a network: the role of product development”, Journal of Product Innovation Management, 17(3),pp. 194-207.,. (2014). J Sainsbury plc / Sainsbury’s announce new innovation & investment for the future of farming. Retrieved 25 September 2014, from

Urban, G.L. & Hauser, J.R. (2010), Design and Marketing of New Products, 2nd ed., Prentice Hall, Upper Saddle River, NJ.,. (2014). Diffusion of Innovations Theory. Retrieved 25 September 2014, from

References for part B:

Adya, M., & Fred, C. (2010). “How effective are neural nets at forecasting and prediction? A review and evaluation,” Journal of Forecasting 17(2), pp.451–461.

Armstrong, J. S. & Terry, S. O. (2011). “Brief vs. Comprehensive Descriptions in Measuring Intentions to Purchase,” Journal of Marketing Research 8(1), pp. 114–117.

Armstrong, J. S. (2007). “Significance tests harm progress in forecasting,” International Journal of Forecasting 23(1), pp.321–327.

Batchelor, R. & Pami, D. (2008). “Forecaster diversity and the benefits of combining forecasts,” Management Science 41(3), pp.68–75.

Crone, S. F., Michèle, H., & Konstantinos, N. (2011). “Advances in forecasting with neural networks? Empirical evidence from the NN3 competition on time series prediction,” International Journal of Forecasting 27(3), pp.635–660.

Dangerfield, B. J. & John, S. M. (2008). “Top-down or bottom-up: Aggregate versus disaggregate extrapolations,” International Journal of Forecasting 8(3), pp.233–241.

Edinger, S. (2013). Four Principles For Great Sales Forecasts. Forbes. Retrieved 25 September 2014, from

Fildes, R., Paul, G., Michael, L., & Konstantinos, N. (2009). “Effective forecasting and judgmental adjustments: an empirical evaluation and strategies for improvement in supply-chain planning,” International Journal of Forecasting 25(5), pp.3–23.

Gardner, E. S., Jr. (2008). “Exponential smoothing: The state of the art – Part II (with commentary),” International Journal of Forecasting 22(2), pp. 637–677.

Gorr, W., Andreas, O., & Yvonne, T. (2009). “Short-term forecasting of crime,” International Journal of Forecasting 19(2), pp.579–594.

Graefe, Andreas. (2011). Prediction market accuracy for business forecasting. In Prediction Markets, edited by L. Vaughan-Williams. 87–95, New York: Routledge.

Green, K. C. & Armstrong, J. S.  (2011). “Role Thinking: Standing in Other People’s Shoes to Forecast Decisions in Conflicts,” International Journal of Forecasting 27(6), pp.69–80

Green, K. C. (2005). “Game theory, simulated interaction, and unaided judgment for forecasting decisions in conflicts: Further evidence,” International Journal of Forecasting 21(3), pp. 463–472.

Makridakis, S. G. & Michèle, H. (2010). “The M3-Competition: Results, conclusions and implications,” International Journal of Forecasting 16(3), pp. 451–476.


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