Test Marketing

• Test marketing is a method that aims to explore consumer response to a product by making it available on a limited basis to test markets before a wider release
• The main advantage of test marketing is the ability to gather feedback from consumers about their preferences, opinions, and reactions towards the new product.
• A disadvantage of test marketing is its high cost due to the need to produce and distribute products to selected areas or stores.
• Another disadvantage of test marketing is the possibility of competitors copying the idea if they find out about it.
• Test marketing involves replicating all elements of a product launch to a specific planned smaller geographic region or demographic group
• Companies can use information from test marketing to make informed decisions regarding whether to proceed with a nationwide launch or modify the product based on customer feedback
• Test marketing is an important part of market research
• What are the postitives of test marketing?

  • Actual sales results can be used to inform decisions
  • Can generate feedback to modify the product
  • Minimises risk and firms do not wast high costs on a product launch if it is not going to be successful
• What are the negatives of test marketing?

  • Tastes in one area may not translate to the rest of the market
  • Can be costly and time consuming
  • May give competitors time and opportunity to respond if test marketing delays the full launch