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Analysis of Factors Affecting Product Sales with an Outlook toward Sale Forecasting in Cosmetic Industry using Statistical Methods

Author

Listed:
  • Mohammad Khajehzadeh

    (Department of Industrial Engineering, Iran university of Science and Technology, Tehran, Iran)

  • Farhad Pazhuheian

    (Department of Industrial Engineering, Iran University of Science and Technology, Tehran, Iran,)

  • Farima Seifi

    (Faculty of Natural Resource and Environment, Islamic Azad University, Science and Research Branch, Tehran, Iran,)

  • Rassoul Noorossana

    (Department of Industrial Engineering, Iran University of Science and Technology, Tehran, Iran,)

  • Ali Asli

    (Department of Mechanical Engineering, Iran university of Science and Technology, Tehran, Iran)

  • Niloufar Saeedi

    (Department of Industrial Engineering, Karaj Islamic Azad University (KIAU), Karaj, Iran.)

Abstract

There are several factors associated with the sale of cosmetic products which contribute to gaining market share for related companies in this industry. Furthermore, sales forecasting is indispensable in all levels of a company’s supply chain including production, distribution and logistics, marketing, and sale. This article mainly focuses on the analysis of characteristics affecting sales and sales forecasting in the cosmetics industry in which it will be helpful in determining sales strategies of cosmetics companies. Therefore, as a case study in this study, the main factors affecting the sale of cosmetic products were determined and categorized; accordingly. Three products including moisturizing cream, perfume, and sunscreen were examined using a statistical method. The effect of factors on product sales was predicted using the spline smooth prediction method and based on the predicted values, using the non-parametric Friedman test and Mean Rank, the effective factors were ranked in each of the three products. Moreover, the company’s sales volume in each of the three products was forecasted by using ARIMA models. The results demonstrated that factors such as “price” and “product” elements are the main drivers influencing the sales of moisturizing creams and “promotion” and “Inflation rate” factors play the most effective role in the sales of the perfume. Also, the compound aggregated growth rate (CAGR) for moisturizers, perfumes, and sunscreens over a five-year period in the study company are 30%, 29%, and 45%, respectively. It is very clear that to achieve ideal sales, paying attention to these influential factors and forecasting product sales lead to predicting material procurement of manufactures, distribution channels, and sales which finally provides business with customer satisfaction.

Suggested Citation

  • Mohammad Khajehzadeh & Farhad Pazhuheian & Farima Seifi & Rassoul Noorossana & Ali Asli & Niloufar Saeedi, 2022. "Analysis of Factors Affecting Product Sales with an Outlook toward Sale Forecasting in Cosmetic Industry using Statistical Methods," International Review of Management and Marketing, Econjournals, vol. 12(6), pages 55-63, November.
    • Handle: RePEc:eco:journ3:2022-06-6
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    More about this item

    Keywords

    Cosmetic Industry; Marketing; Sale Forecasting; Purchasing Power; Time Series; ARIMA Model;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other
    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets

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