What is standard test market

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Stage 6: Nlarket Testing

Market testing is a stage of the new-product process that involv

exposing actu"al produ-tt to p.otp"ctive consu-mers under realisl

pr."fru.-" conditions to see if they will buy' If the budget permi

iorrr.", packaged goods firms do this by test marketing' involves off"tirg a product for sale on a limited basis in a ' area for u ,p""ifi" time period. The three main kinds of test kets are (listandard, (2) controlled, and (3) simulated'42 Be

standard test markets are so time-consuming and expensive and

alert competitors to a firm's plans, some firms skip test markets

tirely or use controlled or simulated test markets'

Standard Test Markets ln a standard test market, a company develops product and then attempts to sell it through normal distribution tn*ilt:1T.::*

Consumer Products companies, such as General

Mills shown here, often use

controlled test markets to assess the likely success of

new product, Promotional, or

pricing strategies.

of test-market cities. Test-market cities must be demographically representative

markets targeted for the new product, have cable TV systems that can deliver diff

ent ads to dlfferent homes, und hul " retailers with checkout counter scanners to

sure sales. A distinguishing feature of a standard test market is that the producer

the product to distiibutors, wholesalers, and retailers, just as it would do for

products.

Controlled Test Nlarkets A controlled test market involves contracting entire test program to an outside service. The service pays retailers

for shelf space

can therefbre guarantee a specified percentage of the test product's potential di

tion volume. SymphonylRi Gtorrp is a leader in supplying controlled test mark

BehaviorScan service ,rses five demographically representative cities to track

made to a panel of households. In some cases the effectiveness of different TV

mercials and other direct-to-consumer promotions can be measured'

full-scale test market. STMr ur" often run in shopping malls, to find consumers

"r" ifr" pr"auct class being tested. Next, qualified participants are. shown the

pr

or the produ6t concept unJur. asked about usage, reasons for purchase, and impn

prodrct attributes. They then see the company's and competitors' ads for the test

uct. Finally, participants are given *o'"y to decide to buy or not buy the firm's competito;s' produit from a real or simulated store environment.

Sirnulated Tbst Markets To save time and money, companies often simulated (or laboratory) test markets 6fM), a technique that somewhat repl

When Tbst lvlarkets Don't Work Not all products can use test l Test marketing a service is very difficult because consumers can't see

what

buying. For ei.ample, how do you test market a new building for an art

Simila'rly, test maikets for expensive consumer products such as cars or

dustrial products such as jet engines are impractical. For these products'

of poteniial buyers to mockups or one-of-a-kind prototypes are all that is

Stage 7: Commercialization Finally, the product is brought to the point of commercialization-the

sl

new-product process that positions and launches a new product in full-

duction and iales. Companies proceed very carefully at the commercl

stage because this is the^most eipensive sta-ge for most new pt?d"."11,7

torf irtrodu"e a product that leapfrogs the firm's own new product or if

'

izationofitsownexistingproductslookssignificant,thefirmmay new-product launch.

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