As a business owner in Malaysia, you must be aware of the seasonal demands throughout the year. These demands can vary based on your industry. Still, some of the busiest times for businesses in Malaysia include festive seasons such as Chinese New Year, Hari Raya, and Deepavali, as well as school holidays and events like the SEA Games, the World Cup, and concerts featuring internationally renowned musicians. However, forecasting seasonal demand is crucial to ensure your business is prepared to handle these demands.
Why Is Seasonal Demand Forecasting Vital?
Seasonal demand forecasting is crucial as it helps you anticipate customer needs and avoid stockouts or dissatisfied customers. It also enables you to identify opportunities to increase sales and profitability by offering seasonal promotions or launching new products that cater to customer needs during peak seasons.
How to Forecast Seasonal Demand
To effectively forecast seasonal demand, you must understand your business cycles and choose the proper analytical framework. Here are some strategies you can use to forecast seasonal demand in Malaysia:
1. Understand your business cycles
The first step in forecasting seasonal demand is to analyze your business cycles by identifying the patterns and trends in your sales, inventory, and customer behavior throughout the year. Doing this lets you determine when and what factors may influence your peak seasons. For example, if you run a hotel business in Malaysia, your peak season happens during school holidays and major events.
2. Choose the correct analytical framework
Once you understand your business cycles well, you must choose the proper analytical framework to forecast seasonal demand. Some of the most popular frameworks used for seasonal demand forecasting include clustering, time series, and qualitative data analysis.
Clustering
Clustering involves grouping similar data points to identify patterns and trends. For example, you could cluster customer data based on peak season purchases to identify the most popular products or services.
Time series
Time series analysis involves analyzing data to identify trends and patterns, which can help you predict future demand based on past performance. For example, based on past trends, you could use time series analysis to predict hotel occupancy rates during the upcoming school holidays.
Include qualitative data
In addition to quantitative data, it is vital to consider qualitative data such as changes in consumer behavior, new competitors entering the market, or long-awaited events happening in Malaysia.
3. Consider outliers as well
It is also essential to consider outliers when forecasting seasonal demand. These unexpected events or circumstances, such as a pandemic or a major political event, can impact demand. However, you shouldn’t irrationally fear outliers because they can be an excellent opportunity to reap more profits. Instead, you should see whether it could occur again.
One notable example would be during Coldplay’s concert in 2023. Hotels around the event venue–Bukit Jalil National Stadium in Kuala Lumpur–saw a massive increase in guest numbers, and guests were looking forward to wearing fun concert outfits, which benefitted fashion brands.
How to Implement Seasonal Demand Forecast in Business Strategy
Once you have a good understanding of seasonal demand forecasting, it is essential to implement it into your business strategy. Here are some steps you can take to do this:
- Use your seasonal demand forecasts to plan your inventory, marketing, and staffing needs, so you have sufficient resources to meet customer demands during peak seasons.
- Consider offering seasonal promotions or launching new products that cater to customer needs during peak seasons. This strategy can help you increase sales and profitability during these periods.
- Monitor your seasonal demand forecasts regularly and adjust your strategy as needed to stay ahead of changes in demand and ensure that your business is always prepared to meet customer needs.
Seasonal demand forecasting is critical to running a successful business in Malaysia. Ensure you have enough funds to better implement your seasonal demand forecast in business strategies. However, rest assured that there’s an affordable solution available for you! At Funding Societies, we’re committed to helping SMEs in Malaysia grow and succeed with financial solutions offering flexible repayment terms and competitive rates. Contact us today to learn more about how we can help your business thrive.