Forecasting a Market in a Chaotic Environment: Learnings From Ecuador, a Highly Volatile Economy

Esteban Vega-H.
Corporacion Maresa Holding, Ecuador

G. Bernardo Creamer
Institute of Economic Studies, San Francisco University, Ecuador

INTRODUCTION

Constant changes in developing countries are common; to be well prepared for them, firms need to adapt their sales strategies in accordance with the environment. Under these conditions, some understanding of the coming of crisis or sales booms is crucial for the firm in order to adapt its marketing plans and product stocks.

Marketing research professionals are responsible for coming up with reliable forecasts of future market conditions, and expected sales volumes, which in turn depend on market conditions such as the size of economic activity, interest rates, government investments and expenditures, stability of households income, and taxes, among others. This task becomes complex in economies from developing countries, where various product markets show high volatility. On the other hand, it is a fact that the further we go into the future in our prediction, the greater the probability of errors in our forecast.