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Market testing (Chapter 18) - Coggle Diagram
Market testing (Chapter 18)
market testing
market testing decision: whether and how to test
what are the disadvantages if we wait too long
when is the most appropriate time to conduct market testing
what are the advantages if the longer we wait to conduct market testing
decision matrix on when to market test: cost and time savings high / scope of learning and accuracy high
factors for deciding whether to market test
any info needed
costs (direct cost of test, cost of launch, lost revenue that an immediate national launch would brought)
special twists on the launch
nature of marketplace (competitive, customer demand)
-serves to evaluate the appropriateness and customer acceptance of proposed marketing plan
-answer the qs of whether the proposed marketing strategy will work as planned
-find out how the market reacts to its product
-assess its future sales potential
-uncover any flaws in the product's concept or design
-determine possible enhancements or improvements
-question: to test or not to test
Methods of market testing
controlled sale
direct marketing
involves focused selling efforts on a particular market segment or target market, which receives info about the product and is offered the opportunity to purchase it
more secrecy
instant feedback
positioning and image development are easier
cheaper than other techniques
technique matches today's growing technologies (credit card financing, telephone ordering, database compilation
minimarkets
select a limited number of outlets
chosen outlets can advertise in its own flyers
shelf displays, demonstrations
use rebate, mail-in premium, or some other method to get names of purchasers for later follow-up
from the results, decide to stop or move forward to a national launch
informal selling
trade shows: salespeople can show the product, informally approach customers, make the pitch, and see if customer will actually buy the product
train salespeople, give them the product and the selling materials, and have them make calls
real presentations, real sales
-buyer must make a purchase
-conducted under controlled conditions
-product has not been released for regular sales
full sale
test marketing
representative segment of the market receives the total marketing program
product is sold into those cities in the regular channels and advertised at representative levels in local media
provides an abundant supply of market info and can verify production capabilities
once: whether to launch a product
now: determine how best to do so
pros:
-risk reduction (monetary risk, channel relationships, sales force morale)
-strategic improvement (marketing mix, production facilities)
disadvantages:
-cost
-time (hurt competitive advantage, competitor may monitor test market, competitor may go national)
-competitor can disrupt the market
rollout
subset of the intended target market receives the product and then the company systematically introduces the new product to other parts of the target market until the entire market is covered
tiered marketing / limited marketing
select a limited area of the country and monitor sales of product there
starting areas not necessarily representative
company may deliberately choose a hard area to sell in, to learn the pitfalls and what really drives success
decision point: when to switch to full national launch
types of rollout
application
influence
geography (including international)
trade channel
risks of rollout
competitors may move fast enough to go national while the rollout is underway
problems getting into distribution channel
need to invest in full-scale production facility early
lacks national publicity that a full-scale launch may generate
-firm has decided to fully market the product
pseudo sale: ask the potential buyers to do something
speculative sale
product use test: how likely would you be to buy a product like this, if we made it
speculative: if we make this product available as I have described it, would you buy it
concept test: how likely would you be to buy a product like this, if we made it
used in B2B settings
often conducted by regular salespeople calling on real target customers
no advertising
conditions for speculative sale
new product work is technical, entrenched within a firm's expertise, and only little reaction is needed from the marketplace
adventure has very little risk
industrial firms have close downstream relationships with key buyers
simulated test market (STM)
follow-up with customer later to assess likely repeat sales
cheaper, more confidential, and faster than controlled sale and full sale methods
create a false buying situation and observe what the customer does
stimulated test market procedure
advertising stimuli
mini-store shopping experience
self-administered questionnaire
post-exposure questionnaire
mall intercept
receive trial package
phone follow-up and offer to buy more
used in consumer markets through the use of advertising testing and other promotion testing
visionary shopper (VS):
-brought into a virtual retail store environment
-say they would buy if the product were available
-no spending, no major risk
methods of marketing testing, and where used
pseudo sale
speculative sale
industrial: goods, services
consumer: durables, services
simulated test marketing
consumer: packaged, durables, services
controlled sale
direct marketing
industrial: goods
consumer: durables
minimarketing
industrial: goods, services
consumer: packaged, durables, services
informal selling
industrial: goods, services
consumer: durables, services
full sale
test marketing
industrial: goods, services
consumer: packaged, durables, services
rollout
influence
industrial: goods, services
consumer: services
geography
industrial: goods, services
consumer: packaged, durables, services
application
industrial: goods, services
trade channel
industrial: goods
consumer: packaged, durables