Relevant Market Forecast

The page describes the Relevant Market Forecast table in the National Forecast tab

In order to calculate the target market share we need both the forecast for the product/SKU as well as for its Relevant market. The Relevant Market Forecast table allows us to model the sales evolution of the Relevant Market based on their insights and market trends.

The Relevant Market Forecast table is displayed under specific conditions. It becomes available only when the 'Set Market Share' option in the Configuration settings is activated (if you seek further information on enabling the Relevant Market table, please refer to the Configuration - Manage Market Share page). The primary purpose of the Relevant Market Forecast table is to support the market share targets calculation. By enabling the 'Set Market Share' option, users gain access to a comprehensive view of market forecasts, facilitating strategic planning and decision-making processes.

Relevant Market Forecast table

Relevant Market Forecast Table

The relevant market forecast table is similar to the SKU forecast table having a similar main structure, with the following components: Each Relevant Market associated with an SKU during the configuration phase will be represented by 1-3 rows in the table, one row for each measurement in which market share targets will be calculated. The initial column of this row will furnish information such as the Relevant Market's name, measurement, and the Data Source-Channel combination used for the forecast.

The main difference between the SKU forecast table and the Relevant Market forecast table is that in the former there is one row for each SKU and in that row, all measurements are displayed, but in the latter Relevant Market forecast is done separately for each measurement.

Converting Units to Value or DOT is easy for products, by using Price or Volumes to DOT, but it is difficult for the market because the mix of products in the market may change.

First column in the Relevant Market table

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Historical Data (Volumes)

The second header of the table is named Historical Data (Volumes) and is split into 2 halves:

• last 3 months with available data

• Average Growth % - quarterly / yearly

Historical Data columns

For each Relevant Market, the system will present sales data measured in volumes for the last 3 months (regardless of the cycle length) for which data is available. If no data is available for a month, the system will display N/A.

Quarterly average growth refers to the average rate of growth over three months, calculated by the ratio between the sales volumes/value/DOT in the previous quarter to those from two prior quarters:

$$\text{Average growth}_\text{quarterly} = \left( \frac{\sum_{i=1}^{3} \text{Sales}_{i}}{\sum_{i=1}^{3} \text{Sales}_{i-3}} - 1 \right) \times 100$$

where:

• $\sum_{i=1}^{3} \text{Sales}_{i}$ represents the sum of sales in volumes/value/DOT in the previous quarter;

• $\sum_{i=1}^{3} \text{Sales}_{i-3}$ represents the sum of sales in volumes/value/DOT from two quarters ago;

• 1 represents the last month with data

Quarterly average growth will always be calculated based on the last 3 months with data regardless of the cycle length!

Yearly average growth refers to the average rate of growth throughout the cycle length, calculated by the ratio between the sales volumes/value/DOT in the previous quarter with the same period of the previous year:

$$\text{Average growth}_\text{yearly} = \left( \frac{\sum_{i=1}^{n} \text{Sales}_{i}}{\sum_{i=1}^{n} \text{Sales}_{i-12}} - 1 \right) \times 100$$

where:

• $\sum_{i=1}^{n} \text{Sales}_{i}$ represents the sum of sales in volumes/value/DOT in the previous quarter;

• $\sum_{i=1}^{n} \text{Sales}_{i-12}$ represents the sum of sales in volumes/value/DOT from the same period of the last year;

• n represents the cycle length.

Yearly average growth will always be calculated based on the cycle length.

When the cycle length < 3, the yearly average growth will be calculated using data from the most recent three months.

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Monthly Forecast

The third header of the table is named Monthly Forecast and contains a column for each month in the current cycle and a Total column. Within these columns, relevant market targets for each month in the current cycle must be established. The relevant market target can be set on Volumes, Value or DOT. Consequently, the following formula is applicable across all measurements:

$$\text{Total Volumes} = \sum_{i=1}^{n} \text{Target}_i {_{\text{\qquad\qquad ,where n = cycle length}}}$$

Monthly Forecast columns

Access to editing the Volumes columns is permitted only to users with TS-Write permission, applicable only when the plan is in the National state.

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Growth

The fourth header of the table is named Growth and is split into 2 halves:

• quarterly growth

• yearly growth

Quarterly growth is calculated as a comparison between the current cycle's target and the sales from the previous months based on the duration of the current cycle;

Yearly growth is calculated as a comparison between the current cycle's target and sales from the same months of the previous year.

Quarterly and yearly growth can be calculated using volumes, value, and DOT. The same formulas are applied uniformly across all three measurements:

$$\text{Quarterly Growth} = \text{Total Volumes} - \text{Total Volumes of Previous Quarter}$$

$$\text{Yearly Growth} = \text{Total Volumes} - \text{Total Volumes of Same Period of Previous Year}$$

where:

• $\text{Total Volumes}$ represents the total volumes for the current cycle in the current year;

• $\text {Total Volumes of Previous Quarter}$ represents the total volumes for the quarter immediately preceding the current cycle;

• $\text{Total Volumes of Same Period of Previous Year}$ represents the total volumes for the equivalent months in the previous year.

Growth columns

Quarterly and Yearly growth are always calculated based on the cycle length.