Test market

Topics: Marketing, Marketing research, Exploratory research Pages: 5 (1460 words) Published: June 20, 2014
Test Market
Test marketing is the final stage before commercialization, and is where all the elements of the marketing plan are tested. The stage where all the variables in the marketing plan, as well as the productcharacteristics, are tested in a real-world setting. Test marketing is a technique used during product development to determine how people respond to a product. It can be used at many different phases of development to see whether or not the public will buy the product, how the product may need to be adjusted to make it appealing to the public, and how members of the public interact with the product. Using information from test marketing, product developers can refine products to make them more commercially viable before embarking on a widespread project launch. One of the simplest forms of this type of marketing is online test marketing, in which a manufacturer produces a survey to determine whether or not members of the public even want a product. The survey can also provide useful data about how much people would be willing to pay for a product, whether or not people would travel to obtain it, what kind of features they would look for, and so forth. This form of marketing can also be done through mail and phone surveys sent to a targeted area of the population. Once a product is in development, companies can embark on test marketing which involves bringing actual examples of the public. They expose the product to a selected area of the public to see how they respond. For example, a car manufacturer might bring prototypes to a few major cities viewed as trendsetters to see how people respond and to give people a chance to interact with the car. Or, a manufacturer of potato chips might send out a new flavor to a select group of supermarkets, asking the supermarkets to put it out on the shelf like a regular product and to monitor consumer response. Companies use test marketing to gather information about public response to their products. This information may be used to totally rework or a product, or to add features. It also informs the ad campaign, ensuring that ads are presented in a way which represents the product, hits the target audience, and makes people interested in purchasing the product. Marketing tests are critical, and companies which fail to perform them can run into trouble when they start a major advertising campaign and product introduction. Entrepreneurs who are interested in selling something entirely new are often encouraged to engage in test marketing before they give up their day jobs or savings. This allows them to explore the idea of introducing the product to the market. It may turn out that members of the public don't respond, making investment in actual product development unwise.

While there are many ways to perform market research, most businesses use one or more of five basic methods: surveys, focus groups, personal interviews, observation, and field trials. The type of data you need and how much money you’re willing to spend will determine which techniques you choose for your business. 1. Surveys. With concise and straightforward questionnaires, you can analyze a sample group that represents your target market. The larger the sample, the more reliable your results will be. In-person surveys are one-on-one interviews typically conducted in high-traffic locations such as shopping malls. They allow you to present people with samples of products, packaging, or advertising and gather immediate feedback. In-person surveys can generate response rates of more than 90 percent, but they are costly. With the time and labor involved, the tab for an in-person survey can run as high as $100 per interview.  Telephone surveys are less expensive than in-person surveys, but costlier than mail. However, due to consumer resistance to relentless telemarketing, convincing people to participate in phone surveys has grown increasingly difficult. Telephone surveys generally yield response rates of...
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