Test Marketing Test 1

Front 1

Three types of test markets

Back 1

Standard, Controlled, and Simulated

Front 2

Standard Test Markets

Back 2

Test the product through company's normal distribution channels

Front 3

Controlled Test Markets

Back 3

Company uses and outside research firm. They guarantee that distributor will put your product on the shelf.

Front 4

Simulated Test Markets

Back 4

Subjects are selected based on target market of test product.

Front 5

Advantages of Standard Test Markets

Back 5

Good reflection of how the product will perform

Front 6

Disadvantages of Standard Test Markets

Back 6

Competition automatically known product/packaging and can sabotage you.

Front 7

Advantages of Controlled Test Markets

Back 7

-It gets the product out faster most of the time
- Can also be used in places that are harder to get into

Front 8

Disadvantages of Controlled Test Markets

Back 8

-May not represent firms actual distribution system
- competition can still sabotage you

Front 9

Advantages of Simulated Test Markets

Back 9

-Much harder for competition to sabotage you
-Faster to do
-Good if you want to spot a clearly weak product quickly.
-save yourself money

Front 10

Disadvantages of Simulated Test Markets

Back 10

-Equation they throw it into is based on assumptions and assumptions may not always be accurate.
- No indication of how willing retailers/ distributers are to cooperate.

Front 11

What is test Marketing?

Back 11

A field experiment conducted in actual product market(s)
-frequently used for new products

Front 12

Cannibalization

Back 12

When consumers choose a new offering as a replacement for another product offered by that same company.

Front 13

What is the most common use of test marketing?

Back 13

to forecast the sales of new products

Front 14

Problems with forecasting sales

Back 14

-time lapse between test market and full launch
-limited indication of repeated purchases

Front 15

Other uses for test marketing (3)

Back 15

- identify product/marketing mix weaknesses
-detect product ricks and minimize span of impact
-generate positive buzz/publicity prior to the full launch of the product

Front 16

Population Size

Back 16

-No one size represents the best pop. for a test market city
-Pop should be large enough to provide meaningful results but small enough to ensure the casts are not too high

Front 17

When to not test market

Back 17

If you are selling expensive durables (car, fridge, etc.)
-products that involve little investment
-if you want to keep something a secret from competitors
- if you make small tweeks in a product

Front 18

Why can short term sales be misleading?

Back 18

It may over estimate sales because usually early adopters are heavy users of the product. Projections are based on consumers who are far form avg.

Front 19

Recommended length of time for a test market and the avg. length

Back 19

Long enough for consumers to become award of the product, buy it, consume it, and repurchase it at least one more time.
-------avg is on year.

Front 20

Test Market Sabotage

Back 20

Intentional attempts to disrupt the results of a test market being conducted by another firm.