Market Testing Essay

Submitted By neha2729
Words: 1058
Pages: 5
Open Document
MKTG 492
Professor Sam Min

Lecture 6
Market Testing

Let’s say (_________) testing showed a need, and the (______________) test indicated the emerging product met that need, without serious drawbacks. And we have a marketing plan.

Now what do we do? Market the item quickly, before competition finds out what we are up to? Or find a way to check out what we have done, to see if it really looks like we will be successful, before spending what usually is a lot of money on the launch? The option open to us is called (_______________).

The basic idea of market testing is to test the combined package of product and its marketing plan. One way this has been done is test marketing:

Implement the entire plan in a few cities and see what happens in the real marketplace, against real competitors, being bought by real customers.

There are three ways to do market testing!

1. Pseudo Sale Methods
2. Controlled Sale Methods
3. Full Sale Methods (Test Marketing)

One experienced Procter & Gamble market researcher said he considers skipping the market testing if….

1. Capital investments are small and forecasts are conservative.
2. The use tests went well and consumer interest is high.
3. The company knows the market well and has been successful there.
4. Advertising is ready and successfully tested; sales promotion plan does not depend on perfect execution.

Any other reasons for skipping market testing?

Pseudo Sale Methods

Speculative Sale
We go to the customers, give them the full pitch on the product, in a version close to ultimate marketing, answer questions, negotiate prices, and lead up to the closing question, “Would you buy it?”

It sounds very similar to the techniques in concept testing. The difference this time is that the product is real, as are the price, delivery schedules, and so on.

Yet, there is no advertising at this time.

Simulated Test Market (Pre-market Testing)
Potential buyers are asked to pick the item off the shelf of a make-believe store.

It utilizes A-T-A-R model.

The central idea is to get estimates of trial rate and repeat rate.

Basic Procedure

1. Respondents are usually gathered in a mall intercept. If the respondent fits the criteria for sample selection, he is invited to step into a research facility.
2. In the facility, the respondent will be given a self-administered questionnaire asking for his attitude and practice in one or more product categories. The advertisements are couched in a TV presentation. Several ads are presented so the respondent isn’t sure what is being tested.
3. The respondent is then taken into another room, usually what appears to be a very small convenience store with shelves of products. The test manager gives the respondent some play money. Hopefully, the respondent entering the “store” will now purchase the new product advertised in the first room. This yield the key variable trial rate.

Note that the leading seller of Stimulated Test Market services does not use a pseudo store. Instead, it asks respondents buying intention and then simply gives trial product to those who express buying interest.

4. Most of the respondents are then free to go. None buyers are given trial (forcing) packages of the product as they leave.
5. Some time later, the respondent is contacted by telephone. Product usage, reactions, and future intentions are asked. At the end of the call, the respondent will be offered a chance to “buy” more of the product. This gives us the second key variable repeat rate.

ASSESSOR (Silk and Urban, 1978) is a pre-market test model designed to give a market-share projection for the new brand.

Long-Term Market Share, s is

s= p*r

s = ultimate market share p = ultimate penetration rate r = ultimate repeat rate among triers

The ASSESSOR model decomposes the penetration rate as follows:

p = F*K*D + C*U – (F*K*D)*(C*U)

F = trial rate
K = awareness rate
D
Show More

Related Documents: Market Testing Essay

Essay on Critically discuss how the empirical exercises in the assignment relates to the literature on testing for market efficiency

exercises in the assignment relates to the literature on testing for market efficiency. I start off by defining the efficient market hypothesis and how academics today test whether it exists or not. Then there is a discussion regarding the testing and the literature on the subject of market efficiency. Further I talk about our assignment and the different questions and exercises we are given, and how it links to the literature of testing market efficiency. Finally I conclude by comparing our work…

Words 652 - Pages 3

New Product Marketing Essay

This week I’d learned about Market Testing, Chapter 18 and Public Policy Issues 20. I learned the importance of team development and the different kind of role to serve the farm, by learning about this concept it helped me to the better the process of market testing. I also felt I learned many of these ideas could be applied in my personal, business, and career. Thoughts about the main topics Learning about market testing and public policies are extremely important to any organization. Public…

Words 425 - Pages 2

Persuasive Essay On Dietary Supplements

Food Supplements Directive. By ensuring the public does not consume banned substances the FDA could potentially save hundreds of lives. Additionally, Pre-market approval…

Words 1280 - Pages 6

Persuasive Essay Against Animal Testing

against Animal Testing In the United States, one of the leading sales industries is that of cosmetics, which collectively earns billions of dollars a year. Some of the most famous cosmetic brands include L’Oréal, MAC, Maybelline, and Neutrogena, but besides the products that they sell, all of these brands have one thing in common: involvement in animal testing. Animal testing is used as an outdated form of security for humans against allergic reactions from new ingredients on the market. It most commonly…

Words 556 - Pages 3

Essay about Performance Testing

Performance Testing Marketing plan About Us.. Compest Solutions Inc is a specialist provider of customized, high-end Business-Technology solutions & services for the Insurance, Banking, Manufacturing and Capital markets. We have consistently provided high-quality software solutions in a cost-effective manner and on time. Compest Solutions provides the right tools, techniques, technologies and skill sets to execute most comprehensive and complex projects with considerable ease. A typical Compest…

Words 2534 - Pages 11

Essay on Clover Valley Dairy Case Study - Letter to Charles Krieger

regards to market testing of the new cups and carriers! Your suggestions are much appreciated and are really very helpful in what we are trying to do. I want to share my thoughts about the market testing we want to conduct and also discuss with you the ideas you have proposed, with the final goal of finalizing them and ensuring that we indeed have the right approach for this initiative. I have outlined below my thinking on key points for your consideration. Before getting into the actual market test,…

Words 943 - Pages 4

Essay on Software Test Engineer Co-Op Position

client/server as well as in a standalone configuration. Connex CS is currently in a limited market release. Full market release is expected early 2014. Because Connex CS is not full market release, there is no Connex CS product information on the Welch Allyn web site. However, Connex CS is similar to our Connex VM product (http://www.welchallyn.com/apps/products/product.jsp?id=18-mu-96-1179856474703). Connex CS testing includes communication with Welch Allyn devices such as the CVSM (http://www.welchallyn…

Words 585 - Pages 3

Impairment Test Essay examples

result in the accounting firm being unable to provide assurance services for the acquirer post acquisition. The professional business valuator will approach the valuation of the Acquiree’s business by applying three valuation approaches: 1. The Market Approach 2. The Income Approach and 3. The Cost approach Each of these approaches will be considered in all valuations. Question 2 Identify the Acquirer It is necessary to identify the acquirer in order to apply the…

Words 812 - Pages 4

Why Is Animal Testing Necessary

the experiments are seen as inevitable as they can prevent human deaths. To what extent is animal testing necessary? Tests are performed to guarantee the safety of customers. They help ensure products are safe as well as advance medical research. A current day example is that scientists and researchers are looking for cures to dementia and cancer with the help of animal experimentation. They are testing a promising drug to find if there are any side-effects (Anderson, 2015). If a cure is found there…

Words 589 - Pages 3

Management's Potential Demand For A New To Market

plan to bring to market in early 90’s was entirely new to market and first of all Hawkins should do a initial market research to estimate potential demand for his visionary product. This assessment should be used to select the potential market segment and market needs the product will serve so as to meet and serve greatest need. The forecasting of market potential can be based on performance of similar less advanced products or population based estimate methods can be used. Once Market potential has…

Words 655 - Pages 3