Forecast adjustments during post-promotional periods

Sales promotions are a key cause for judgmental adjustments to forecasts, especially in the world of Fast-Moving Consumer Goods (FMCG). Typically, three types of periods are relevant for sales promotions: a normal period as a comparison point, a promotional period, and a post-promotional period. Yet, research on forecasting with sales promotions has focussed specifically on promotional effects and their elevation versus a normal sales period, while generally disregarding adjustments for post-promotional periods. To investigate further into the effects of promotions after their occurrence, we employed an incentivized laboratory experiment focussing specifically on the role of human judgment in sales forecasting after a promotion has occurred. Our study shows that, without guidance, the post-promotional period is considered equal to a normal period in sales numbers. However, a post-promotion dip is commonly observed in reality. We therefore introduced information on the existence of post-promotional dips, in itself (treatment one) or with added average magnitude of such a dip (treatment two). Information provision resulted in increased forecasting accuracy in both treatments, but more so in treatment two. Thus, this study promotes the provision of guiding information. We find that structured support, allows an improvement in judgmental forecasting accuracy after a sales promotion.