What is test marketing pdf

The SlideShare family just got bigger. Home Explore Login Signup. Successfully reported this slideshow. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime. Next SlideShares. You are reading a preview. Create your free account to continue reading. Sign Up. Upcoming SlideShare. Test marketing techniques. Embed Size px. Start on. Show related SlideShares at end. WordPress Shortcode. The other way to test the business goods is to introduce it to the trade shows and observe the reaction of customers to it.

Also, these goods can be tested at distributors and dealers showrooms the attention of the customers can be gained. Good article on test marketing. Therefore, you should also keep these things in mind before test marketing your product.

It can sometimes lead you to inappropriate decisions. Since you do not include the full target range, it cannot give appropriate information. It also has a danger of competition. The competitor can learn about your product and come up with the same even before your full launch. It is also time-consuming. It might be costly, as well. This is a trial to test the consumer response in which the consumer will try the product, even for once.

Then, when will they repurchase it? Will they also consider buying it or not? How often will they consider buying it? It is more like choosing particular cities where the test launch will take place. And target people around people are asked to opt for any.

Under this test, the consumer is given the product free of cost. Product managers would like lower levels so that a larger number of products could reach test market. The marketing executive must reconcile these differences by establishing screening criteria consistent with corporate objectives, resources, and opportunities. In addition to establishing these criteria, marketing executives must establish the policies for overriding them.

Researchers agree with the need to override criteria, but they argue that an override should be noted as an exception to the system. The results should be considered in economic-risk terms. Management, like navigators, should use more than one source of information when sailing in dangerous waters. The reality and integrative nature of a test market make it more credible to the executive than any other test procedure.

This partially explains why executives focus primarily on test market results without integrating other data. A second reason for relying only on test markets is that it is difficult to assimilate the variety of information and judgments available to the marketing executive.

But recently developed simulation models can help the marketing executive in combining information to make new product decisions. The high costs of test marketing—indirect and direct—provide an incentive for developing methods that circumvent this procedure. Laboratory and mathematical simulation models are two developments. In this procedure, a sample of consumers is exposed to test commercials and then allowed to shop in a simulated supermarket environment.

Demographic, economic, and brand preference data can be obtained prior to the test. Followup interviews after home use measure product satisfaction and intentions to repurchase. These data can then be fed into mathematical models that predict market share. There are three possible alternatives after the laboratory simulation. First, the product may be killed outright. Second, favorable laboratory simulation results may encourage the marketer to go directly to a regional rollout.

Third, the laboratory simulation may be followed by a test market to measure the productivity of the marketing plan, including trade acceptance, to fine-tune the plan, and to serve as a disaster check. Marketing researchers have established relationships among promotional expenditures, awareness, trial, and repeat purchase that are used in mathematical simulations to predict market share.

Market share predictions become inputs to the profit plan that estimates the payout period. Simulation models are used first to develop an initial payout estimate. At this stage in the process, the inputs to the model are executive judgments. Product-test data replace executive judgment in the next estimate of the payout period. The estimate can then be revised again by using the simulation model with data from the extended product-use test and communication tests.

Mathematical simulations complement test marketing in a variety of ways. Models can be used to project test market results so that tests can be stopped sooner and they can be used for diagnostics after a test market is completed. The decision to test market should be made only after the executive has received a complete marketing plan based on comprehensive product and communication tests. Test markets should be conducted to learn about the productivity of the marketing plan in terms of both consumer and trade response, to learn ways to improve the productivity of the plan, and to avoid potential disasters.

The results of the test market should be used to evaluate the marketing plan, not to generate additional ideas, and not for the evaluation of people. Executives play a major role in the new product development process by establishing levels of criteria for evaluation and policies for overriding these levels.

These levels and policies are part of the mechanism by which executives control the new product development process. James C. Becknell, Jr. You have 1 free article s left this month. You are reading your last free article for this month. Subscribe for unlimited access. Create an account to read 2 more. Test Marketing in New Product Development. Compounding this difficulty is that the goals of […] by Jay E.

Klompmaker, G. David Hughes, and Russell I. Alvin A. Walter Thompson Company Henry J. A version of this article appeared in the May issue of Harvard Business Review. Read more on Marketing or related topics Product development , Market research and Strategy.

Jay E. Klompmaker is assistant professor of business administration at the University of North Carolina at Chapel Hill.