Market Testing Flashcards
When do you do market testing?
After the concept has been tested, a prototype has been developed and the marketing plan is in place
Why should market testing be conducted?
- Generate facts & figures to assure a new product will be actually successful
- Avoid costly failed product launches
- Identify major weaknesses
- Test marketing strategy
- Provides information for all departments
What are some ‘pseudo’ sales methods
- Speculative sales (mainly B2B): giving full business pitch and ending with ‘if we made this would you buy’ (However requires close relationships with key buyers)
- Simulated test market: Giving shoppers the opportunity to go home and test the product and are then surveyed about it later
What are some advantages of using ‘pseudo’ sales methods?
- No financial layout for the buyer, therefore greater willingness to participate
- Can be done early on in the NPD, so information can be gathered & feedback
What are some disadvantages of using ‘pseudo’ sales methods?
- Provides less information
- Is it actually realistic?
What is a controlled sale method?
Small scale tests with real purchasing decisions
What are the advantages of using a controlled sale method?
- More rigorous and informative
- Relative secrecy
- Quick feedback
- Variations of products can be tested easily
What are the disadvantages of using a controlled sale method?
- More costly and complex
- Doesn’t account for geographical preferences
What are the types of sales methods that can be used to market test
Pseudo sales method and controlled sale method
Describe informal selling:
It is primarily B2B, and is conducted by trained sales people and they are given a real product to sell
What is test marketing?
Comprising of actual stores and real-life buying situations, without the buyers knowing they are participating in an evaluation exercise
What is the purpose of test marketing?
To fine tune plans as the product is already decided
What is a ‘rollout’?
The product is launched in one geographical area and then the launch is then gradually. E.g. Mercedes normally launch a car in Germany first
What are the advantages of using the rollout method?
- Cash flow benefits
- Utilised findings in subsequent markets
- Ability to exit at a lower cost
What are the disadvantages of using the rollout method?
- Need for production
- Competitive retaliation
- Limited publicity
