Sales Forecast in a Personal Selling Intensive Industry: An Empirical Analysis of the Repeat Purchase Diffusion Model

It is essential for managers in personal selling-intensive industries to find the optimal mix of personal selling and other promotional efforts to forecast sales, meet sales projections and avoid costly marketplace failures. To that end, we develop and test a repeat purchase diffusion model that allows for the impact of personal selling, pricing and other promotional activities (advertising and sampling) on the adoption of a new product. This model recognizes manager-defined segments of prescribers and incorporates a manager's judgments on the distribution of resources among these various segments. Prescribers are categorized as potential new prescribers and repeat prescribers, based upon sales call attractiveness ratings provided by the sales organization. Market potential is then a function of sales call activity. Our results provide the marketing manager in a personal selling-intensive industry more feedback on the impact that variations in marketing activities could have on new product sales than previously available.