10. Test Marketing Flashcards
Test marketing & innovation
- necessary for business development
- inherently risky
- something that acts as a catalyst in business
- linked with product lifecycle (PLC)
- one of many kinds: eg. inventions, improvements, new -processes, new methods of distribution etc.
Five factors/principles affect the acceptance
of innovations:
- relative advantage (that innovation gives) (e.g. Its quicker to order a film online rather than blockbuster)
- compatibility - how does the product align with a customer’s belief’s, attitudes etc. - am I comfortable with?
- complexity - how easy is it to understand and then consume the product
- divisibility - We want to try something out before we purchase it e.g. test driving a car
- communicability - how easy is it to communicate what the product it?
The “Diffusion of Innovation” Model. The five stages are a continuum:
- Innovators
- Early adopters opinion leader
- early majority
- late majority laggards
- late adopters
Using the diffusion innovation model
- Necessary to research buying motivations of each type of prospective customer
- Innovators/early adopters are critically important: their –media habits must be carefully researched
- “Laggards” should be encouraged by special promotional offers etc.
Reasons for product failure
- “Too soon”/ “before their time” (market not ready)
- Involve too radical a change of habits
- Neglect of market research
- Pre-conceived ideas of what people want
- Poor distribution
- Product performance below expectations
- Product too complex/complicated
Guides to market success
“True innovation” more successful than “me-too” products/line extensions
Products must fulfil consumer expectations
Long-term support (advertising etc.) must be given
Prominent marketers have greater success
“First in” have greater success
Trial rates vitally important in securing volume sales
markets change over time
- Buying behaviour is dynamic, not static
- Rising standards of living - new levels of -demand/expectations ( heating, holidays, health care etc.)
- Greater variety of products/services available
- Insatiability - people never satisfied for long
- Economic/non-economic factors influence changing consumption patterns
- Therefore: marketers must monitor markets carefully
new product strategies
- Building Strategy (leaders):
planned innovation in design, production, marketing and distribution methods
aim to be the market leaders; willing and able to carry the risks associated with their aggressive strategy - Imitative Strategy (followers):
adopts a ‘wait-and-see’ approach
less adventurous
monitor performance of ‘leaders’ before acting - Acquisitive Strategy:
acquire firms with specialist skills, patent rights etc.
may suffer from personal/organisational problems
Test marketing
- Test marketing is basically a field experiment
- Popularised with advent of commercial TV in 1950s; generally confined to consumer products
- Test area results indicate likelihood of national success
- Many problems encountered: competitive activities, selection of representative test area, adequate media availability, cost and time involved
- Largely (but not entirely) replaced by Simulated Test Marketing (STM)
Sequential Approach to Test Marketing
- Define objectives
- Set criteria for success
- Integrate test marketing operations
- Establish controls
- Select representative area(s)
- Decide on number of test markets
- Establish duration of tests
- Evaluate results
Simulated test marketing
-Attractive alternative to traditional test marketing
-Used for new product evaluation, re-launches of existing products, product line extensions etc.
-Requires considerable data, and involves complicated statistical treatments
-Research International uses 3 types of STM:
mini - test
laboratory test calibrated tests
(micro test)
