Running head: Sale Forecasting

The glowstar Solar Lantern in Africa, Kenya

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Marketing is a commercial process that involves the promotion, selling and the distribution of goods and services by making them available for the consumers. In this case, the glowstar solar lantern is the product to be in the market. While the process that involves the estimation of sales a business can be able to achieve in the future is referred to as sale forecasting. This is an integral part in managing a business (ward). When a business lacks a concrete idea about the future sales, it will be almost impossible for the business to manage the inventory, its cash flow and even have no a clear picture on the future plans for the growth of the business. Therefore the main objective of sale forecasting is the provision of information that will help the business to make a decision that is intelligent. An established business has a baseline for its sale forecasting compared to the unestablished business. The glowrstar solar lantern is a new product that has been launched and therefore its sale forecasting is problematic since it has no baseline for its past sales, and there is need for sales forecasting. This essay will look into the background of the glowstar solar lantern, its potential in the market and the methods of forecasting it and access its impact in Africa.

Any new product in the market is as a result of the challenges or the draw backs of the existing product. In Africa individual that live in the rural area have limited or no access to electricity and therefore most families do rely on kerosene lamps, candles for the provision of basic light in their homes. In Kenya, one of the countries in Africa, only 4% of the population can access electricity while 70% of the homes in Kenya spend their petty earned cash on dry cells batteries for torches. This monthly recurrent cost does eat up the earning that would rather be for valuable investment in children education and also for healthy family meals and the health as well (Ward, 2010).

The African country has a plenty supply of solar energy from the sun that is costless. This has stirred a growing interest in photo-voltaic (This is a device that is used to convert solar energy into electricity) and the solar systems. It is unfortunate that it is costly to have a modern solar system for most families in Africa. A low cost glowstar solar lantern has been designed by the sollatek company as an alternative for solar system. It has been designed with an intention to give most of the rural families in African an opportunity to climb an “energy ladder.”

The result from customer research was positive, since the lantern is ecologically friendly and it is potable but expensive to the target group. The current price is 10,500 Kenyan Shillings that is around $150 US. This is double the market price that was indicated by the glowstar research. The researcher indicates that the sensible and affordable price ranges between 3,000 to 5,000Ksh. There is a considerable market for the solar system with a price that ranges between 12,000 to 20,000Ksh that offers two or three lighting options. Sollatek should have there own price to avoid competition from other system and have a market segment of there own (White & Fearnon, pg.2)

It is problematic to forecast the glowstar solar lantern since it is a new product in the market and has no history of its sales. Sollatek Company therefore lacks a baseline for this product that can be used to determine its future sale. Therefore the need for the company to identify sale forecast process. This process does involve market research and analyzing of the target market. The company should also identify its trading area and the existing competitors and analyze the collected research with an objective to guesstimate the possible future sales. The forecasting becomes beneficial if the method is strategically planned. According to Elliot, it is indeed difficult to forecast new product due to the absence of sales history that can be give a guide. However, sales revenue can still be estimated by forecasting (Ward, 2010). For example the sollatk company was working with the World Bank for the purpose of finance back up, then sollatek as a company has to make multiple estimates with an objective to instill more confidence when they will be forecasting.

In the first place sollatek should identify its average sales per square foot, for the similar product and the location that of similar and in size as well. It being a new product in the continent perhaps in a year the approach may be general especially if the income is 2% from most households. The sale forecaster should now go to specific places, in Kenya for example and find out how many families require the lantern within a mile? How much will be the spent annual and what sollatek will earn after the glowstar has been bought as compared to the current competitors. The same can then be done within five miles as the forecasting figure is kept low and the distance should be sensible for the location that has been chosen (Ward, 2010). To have a productive forecasting, the company should estimate the revenue of each product that it sales and the service line as well; this will give an estimation of where the company will be in the next six months. With the estimate the gross profit can be calculated for a day, a month and annually with or without any sales of the glowstar.

The glowstar solar lantern has been useful to rural schools in the Rift Valley province around a town called Nakuru. Students in the region are grateful since they will have a chance to have an environment where they can easily study with no hindrance and are positive that they will improve in class performance. This lantern will also lower the chances of eye diseases that are sometimes caused through straining when reading in deem light. Kerosene expenses will also reduce and be channeled to other important expenses.

The glowstar has a high reputation in the market since it is ecologically friendly but it is unfortunate that it has limited penetration to the target group. The major reason for this is still not affordable. In spite of it focusing the rural areas, and thus give an eye opener for future consideration.

Reference:

Ward, S. (2010). Business Management. Sales forecasting. New York Time.Retrived on 26

November, 2010. http://sbinfocanada.about.com/od/management/g/salesforecast.htmWhite, C & Fearnon, K. (2010). Developing next generation of glowstar solar lantern. Retrieved on 26

November, 2010.http://www.hedon.info/docs/EWB_ENERGY_Chris_White_and_Karen_Fearnon_Developing_the_Next_Generation_of_Glowstar_Solar_Lantern.pdf