Test marketing
DESCRIPTION
A pilot trial of a firm’s offering on a small scale in actual or simulated market conditions at a time before its full-scale introduction and commercialization.
A pilot trial of a firm’s offering on a small scale in actual or simulated market conditions at a time before its full-scale introduction and commercialization.
KEY INSIGHTS
The aim of test marketing is to understand better the market’s acceptance of the offering and how well the marketing will perform if fully commercialized. Test marketing further allows the opportunity for finetuning the marketing strategy and marketing mix elements developed in support of a new product development effort. (See also new product development.) Test marketing can be done in certain representative geographic areas in the market or otherwise done through the use of product development simulation models.
The aim of test marketing is to understand better the market’s acceptance of the offering and how well the marketing will perform if fully commercialized. Test marketing further allows the opportunity for finetuning the marketing strategy and marketing mix elements developed in support of a new product development effort. (See also new product development.) Test marketing can be done in certain representative geographic areas in the market or otherwise done through the use of product development simulation models.
KEYWORDS Market testing, new product introduction
IMPLICATIONS
The aim of market testing before introducing the new offering to the market on a much larger scale is to reconcile the difference between what marketers think consumers want and what consumers actually want. Test marketing can help define the difference or similarity in order to improve any of the marketing mix elements before commercial market introduction. Problems in using simulated test marketing techniques may arise, however, out of the inability of some models and techniques to capture realistic market dynamics. On the other hand, when an offering is test marketed in the actual market, there is the risk that competing firms may become aware of the firm’s plans and learn from the effort in a way that gives the competitor a head start in developing a competitive response.
The aim of market testing before introducing the new offering to the market on a much larger scale is to reconcile the difference between what marketers think consumers want and what consumers actually want. Test marketing can help define the difference or similarity in order to improve any of the marketing mix elements before commercial market introduction. Problems in using simulated test marketing techniques may arise, however, out of the inability of some models and techniques to capture realistic market dynamics. On the other hand, when an offering is test marketed in the actual market, there is the risk that competing firms may become aware of the firm’s plans and learn from the effort in a way that gives the competitor a head start in developing a competitive response.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Mohammed, Salleh A., and Easingwood, C. (1993). ‘Why European Financial Institutions do not Test-Market New Consumer Products,’ International Journal of Bank Marketing, 11(3), 23.
Mohammed, Salleh A., and Easingwood, C. (1993). ‘Why European Financial Institutions do not Test-Market New Consumer Products,’ International Journal of Bank Marketing, 11(3), 23.
Marketing Research
Silk, Alvin J., and Urban, Glen L. (1978). ‘Pre-Test-Market Evaluation of New Packaged Goods: A Model and Measurement Methodology,’ Journal of Marketing Research, 15(2), May, 171–191.
Silk, Alvin J., and Urban, Glen L. (1978). ‘Pre-Test-Market Evaluation of New Packaged Goods: A Model and Measurement Methodology,’ Journal of Marketing Research, 15(2), May, 171–191.
Urban, Glen L., and Katz, Gerald M. (1983). ‘Pre-Test-Market Models: Validation and Managerial Implications,’ Journal of Marketing Research, 20(3), August, 221–234.
Clancy, Kevin J., Shulman, Robert S., and Wolf, Marianne (1994). Simulated Test Marketing: Technology for Launching Successful New Products. New York: Lexington Books.
Cameron, Trudy A., and James, Michelle D. (1987). ‘Estimating Willingness to Pay from Survey Data: An Alternative Pre-Test-Market Evaluation Procedure,’ Journal of Marketing Research, 24(4), November, 389–395.
BIBLIOGRAPHY
Klompmaker, J. E., Hughes, G., and Haley, R. (1976). ‘Test Marketing in New Product Development,’ Harvard Business Review, 54, 128–138.
Klompmaker, J. E., Hughes, G., and Haley, R. (1976). ‘Test Marketing in New Product Development,’ Harvard Business Review, 54, 128–138.