Assess the usefulness of sales forecasting to a health and fitness club, such as Virgin Active - Edexcel - A-Level Business - Question 1 - 2017 - Paper 3
Question 1
Assess the usefulness of sales forecasting to a health and fitness club, such as Virgin Active.
Sales forecasting is a projection of achievable sales revenue, based... show full transcript
Worked Solution & Example Answer:Assess the usefulness of sales forecasting to a health and fitness club, such as Virgin Active - Edexcel - A-Level Business - Question 1 - 2017 - Paper 3
Step 1
Sales forecasting is a projection of achievable sales revenue
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Answer
Sales forecasting uses historical data, market surveys, and trends to estimate future revenue. For example, the revenue of Virgin Active can be forecasted using data from existing clubs.
Step 2
Limitations occur because of changes in consumer tastes
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Answer
Forecasting might be flawed if tastes change or if new competitors emerge in the market, like Pure Gym. Members might prefer different facilities or services, making past data less reliable.
Step 3
If past data is not available, forecasts rely on guesswork
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In cases where historical data is missing, such as for new clubs, assumptions must be made. For instance, estimating membership numbers for a new Virgin Active club requires conjecture about market demand.
Step 4
Unexpected changes can alter forecast accuracy
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Market volatility and unforeseen events, like health crises affecting consumer behavior, can distort sales predictions. This makes it essential for clubs to stay adaptable.
Step 5
Ongoing market research is beneficial
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Regular research can help clubs anticipate changes in preferences. For example, analyzing competitors like David Lloyd can provide insights into member expectations and trends.
Step 6
The dynamic nature of the fitness industry requires flexibility
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Health and fitness clubs must adjust offerings frequently to meet changing consumer demands. Effective sales forecasting should be refined continually using updated market data.
