Although some countries, e.g. Ethiopia in the early 1980s, have attempted to forecast demand on the basis of surveys of all farmers, it is virtually impossible to directly ascertain farmers' intentions regarding fertilizer usage, except through a sample survey. The sample being necessarily very small likely purchases, as ascertained by the sample survey, may have a large degree of error. Fortunately, in the fertilizer business it is possible to assess farmers' intentions through retailers. Many retailers are located in villages and are in daily touch with farmers. Many are themselves practising farmers and have a good feel for agricultural prospects for the ensuing season or year. Being close to the scene of action, they have a good assessment of produce price trends, available purchasing power, likely crop shifts, etc. It should be possible to ascertain from each retailer directly or through a large sample, the likely fertilizer demand. Through enquiry from their own outlets, marketing organisations can produce a fairly accurate sales forecast.
When surveying retailers the type of questions to be addressed should be simple and direct. Questions of a long-term nature should be avoided. The main questions to be addressed should be:
what fertilizer types did they buy last year and in what quantities?
what percentage increase or decrease do they expect for the coming season/year?
what are the reasons for the expected increase or decrease? (It is preferable to help the dealer to choose from a list of possible reasons with one item reading “others” to provide for reasons outside the list).
Aggregation of this information to determine a regional growth rate provides the forecast for the next season or year, as well as valuable information on market forces.
The Survey of Buyers' Intentions method is ideally suited for short and medium-term sales forecasts for marketing organisations. The results can be fairly accurate and realistic. Senior marketing executives of companies should apply their judgement to correct anomalies and apply the effect of overall market factors which retailers are not in a position to evaluate. The accuracy of the survey increases if the number of dealers to be covered is not many and if almost all of them respond to the survey. The value of a retailer survey lies in a near hundred percent coverage being possible, especially in smaller countries. The cost is not high and the survey can be carried out through a company's own sales force. It is preferable to have personal interviews instead of issuing questionnaires to be filled in by the respondents. A specimen Check List for the type of information to be gathered at the interviews is in Annex II. This method is most useful when past data does not exist. Because of the close supply-demand balance of fertilizer in most developing countries, dealers are usually willing to disclose their intention with a good degree of frankness. At times, expecting a shortfall, there is a tendency to exaggerate requirements and this needs correction by an expert assessment of company executives. Care also needs to be taken to control for the effect of dealers ceasing business and others starting up as agents of the company.
The reliability of this method also depends on the dealer structure prevailing in the country. In a competitive market, to the extent that dealers switch their loyalty, the sales forecast based on the survey can go wrong. If dealers buy from different sources, there can be problems in using the retailer survey method effectively, especially for company sales forecasts. The retailer survey method is effective when a marketing organisation has a fairly large proportion of dedicated outlets which buy exclusively from it or when the company enjoys a monopolistic or dominant position in the market.
For forecasting national-level, short-term demand, the retailer sample survey can be employed to much advantage and is preferable to a sample survey of farmers as the size of the sample is more reliable. However, for want of fertilizer legislation in many countries there is no registration system to provide a list of fertilizer retailers for ready use for a survey. For this reason, this method is used more by companies for sales forecasts than by governments.
