MARKET

TESTING
 ✓ when prototypes are ready, they must be put through rigorous
functional and customer test
CONSUMER
before they enter the market place.
TEST ✓ Alpha testing tests the product within the firm.
✓ Next, Beta testing the product to customers.

MARKET TESTING
✓ After management is satisfied with functional and
psychological Performance, the product is
ready to be branded with name, logo and packaging
and go into a market test.
 MAIN ISSUES

✓ How much testing should be done and what kind?

✓ High-investment- high risk products, whose chance of
failure is high, must be market tested.
✓ High risk product that can create new product
categories.
 CONSUMER-GOODS MARKET TESTING

Consumer-products tests seek to estimate four variables:

1. Trial
2. First repeat
3. Adoption and
4. Purchase frequency
FOUR MAJOR METHODS OF CONSUMER-GOODS
MAREKET TESTING
Sales-Wave Research

1
> Consumers who initially try the product at no cost
are re-offered with it, or a competitor’s product at a
slightly reduced prices.

Simulated Test Marketing

2 > Consumers are asked the reasons for their

purchases or non-purchases
FOUR MAJOR METHODS OF CONSUMER-GOODS
MAREKET TESTING

Controlled Test Marketing

3
> The company with the new product specifies the
number of stores and geographic locations it wants
to test.

Test Marketing
> the company chooses a few representative cities and
puts on a full marketing communication campaign, and the
sales force tries to sell the trade on carrying the product. 4
 MANAGEMENT FACES SEVERAL DECISIONS:

1. How many test cities?

- Most tests use two to six cities; The greater the possible loss, the regional
differences, and the chance of test-market interference by competitors, the more cities
management should test.

2. Which cities?
-Selection criteria include good media coverage, cooperative chain stores,
average competitive activity and how presentative the city is of other markets
must also be considered.
 MANAGEMENT FACES SEVERAL DECISIONS:

3. Length of test?
-Market tests last a few months to a year ; the longer the average repurchase
period, the longer the test period.

4. What information to collect?

-Store audits will show retail sales and competitors’ market shares but will not reveal buyer characteristics.
-Consumer panels will indicate which people are buying which brands and their loyalty and switching rates.
-Warehouse shipment data will show gross inventory buying but will not indicate weekly sales at the retail
level.
-Buyer surveys will yield in-depth information about consumer attitudes, usage, and satisfaction
 MANAGEMENT FACES SEVERAL DECISIONS:

5. What action to take?

- If the test markets show high trial and repurchase rates, the marketer should laun
the product nationally;
- if a high trial rate and low repurchase rate, redesign or drop the product;
- if a low trial rate and high repurchase rate, develop marketing communications to
convince more people to try it.
- If trial and repurchase rates are both low, abandon the product
B. Industrial/Business-Product Market

Testing-encompasses:
* Alpha testing (conducted within the firm through
employees)

*Beta testing
(conducted with outside customers, often through trade
shows, distributors and dealers, wherever the attention of the
customers can be gained)
 TEST MARKETING IN NEW PRODUCT
DEVELOPMENT
By Empulse Market Research
✓ Marketing Teams often find Market Research a tedious task. Why? Although through the test
marketing campaign, a marketer may ascertain the success ratio and improvement areas to
beat the competition, its accuracy, and secrecy is always a challenge as per marketing folklore.

✓ What makes the test marketing sometimes more difficult, is that the goals of the test marketing
are sometimes unclear to the marketing executive. Besides, once the information is once
gathered, it is often not used up to the mark in comparison to the potential it holds. The
problem piles up as test marketing also has major disadvantages. One of the biggest risks is
that the competition learns about its product. Hence brands must weigh the scale of risk its
disadvantages against key advantages and then only the decision must be evaluated.

✓ This article is aimed at exploring various benefits and challenges of the new product test
marketing, and most importantly, the possible alternatives to deal with those challenges.
 WHAT IS NEW PRODUCT TEST
MARKETING?

✓ The market test is generally carried out to ascertain the

performance and probable market
success of the new products. It provides necessary
information on the level of product
acceptance, viability and customer satisfaction before it is
launched in the market on a large
scale.