Consumer-Goods Market Testing

This test is conducted to know the consumer behaviour in terms of:

 Trial: Whether a consumer will try a product, at least once.

 Repeat: Whether the consumer will repurchase it after the trial.
 Adoption: Whether the consumer accepts the product and will purchase it again.
 Purchase Frequency: How often the consumer will buy the product.

To ascertain these variables the following test are conducted:

1. Sales-Wave Research: Under this test, the consumer is offered the product, again,
free of cost. This is done to determine the willingness of the customers to use the
product every time it is offered. This test is conducted to determine the potential of
the product to be consumed/accepted every time it is offered to the customers to
accept the product. One major example is a free trial of new lipsticks, perfumes
offered to the existing customers, and feedback.

2. Simulated Test Marketing: Under this test, 30-40 customers are selected and invited
to the customers are selected and are invited to the store where they can buy
anything. The new products are placed with the old or competitor’s product and
then consumer’s preference is ascertained through their selection of the products.
In case, the new product is not chosen by them, then the free samples are inquired
telephonically about their product experience after some weeks.
 3. Controlled Test Marketing: Under this test, the company select certain stores in
different geographic areas and ask them to keep its new product into their stores in
return for a fee. The company controls the shelf position, displays, point of
purchases promotions and pricing.

In this test new products are introduced to chain stores and the chain stores and
the presentation of the product is controlled by the brand their presentations, sales,
pitch, introduction, etc. It is not distributed for free to make people try the product
for the price they will get in the future. In cafes, you are pitched by the waiter for
their new recipes and they even ask you to share the feedback.

4. Test Markets: Under this, the firm chooses the representative cities where the full-
fledged launch of the new product is done starting from the promotion campaign to
ultimate sales. Once it is successful, the firm goes for the national launch.
Every brand has its market, they know the demographics and geographic of
their customers. A test market is a set of particularly selected areas or segments of
the audience used for a launch (product launch on a small scale), this small test
market is representative of the entire market size of the company.
For example, many tech companies launch their new features in particularly
selected areas on the basis of sales, customer loyalty, etc.

Industrial-Goods Market testing

There are two types of market testing:

1. Alpha testing (within the firm)

2. Beta testing (with outside customers)
Alpha Testing

The alpha testing is done within the firm by test engineers or employees who check the
marketing mix of a new product and fix the issue arising in any steps of launch.

The actual Alpha test involves having developers, business members, or outside individuals
use and thoroughly evaluate the product. Here are some simple steps to make certain your
Alpha Test runs smoothly and provides valuable feedback for the idea:
 Introduce the Product- Do not explain the product in detail. Give a simple
explanation of the product and gauge their reaction and interest in the product.
 Information About Product- Allow the testers to use the product with as little
information and instructions as possible. You should record any problems the testers
have in understanding and using the product.
 Functionality of Product- Observe the testers to make certain the product functions
as intended. If it fails to function as intended, do not interrupt the test. Also, do not
provide information to the testers explaining how the information to the testers
explaining how the product should work. Simply note the functionality failure as a
point of departure for correcting the issue.
 Candid Feedback- Make certain that you incentivize the testers to point out things
that they do not like about the product or that could use improvement. Establishing
 a testing environment where testers want to be in agreement with the
entrepreneurs or where they are reluctant to voice concerns about the product
invalidates the results of the test.
 Timing of Test- Testing should take place once the product reaches a substantially
useable state. Make certain that the testers have adequate time fully explore the
product. This could mean extending the test over a period of hours or days. Often,
the issues associated with a product do not appear until after considerable use.
Remember also, it is common to put the product through several iterations before
arriving achieving an acceptable product outcome. You want to make certain the
initial exploration is as through as possible.
 Individual Tester- The individuals in charge of product development control the
Alpha Test. Developers, business members, outside individuals (such as friends,
family members, of potential customers).

Following the Alpha Test you should have identified many of the problems with the
product and identified the critical issues that must be addressed. You may also have new
insight on features of the product that customers would prefer changed, added or
removed. You may also have new insight on features of the product and customers
would prefer changed, added or removed. Your next step is to return the product to the
development stage to explore options for making changes and if possible, make the
changes. Remember, the Alpha test is a method. You should have well-defined
benchmarks for the product going into the Alpha test. To the extent that the product
fails to meet those benchmarks, you should be ready and motivated to make the
necessary changes.

Beta testing
The Beta testing is done with the customers where they are asked to use the product and
give their feedback on its usage. The other way to test the business goods is to introduce it
to the trade shows and observe the reaction of customers to it. Also, these goods can be
tested at distributors and dealers showrooms the attention of the customers can be gained.
A beta test is a coordinated project intended to improve the quality of a pre-release
product by collecting feedback from members of the product’s target market. During a beta
test, real people get to use the product in real world environments. Beta tester are
recruited, unpaid volunteers who match the product’s target market. After allowing them to
spend some more time with the product, they provide feedback about their experience and
any problems they encountered. The company then analyses the feedback and uses it to
make improvements to the product before it is released. The company can also use the
results from their beta test to better prioritize requests and concerns for future version of
the product.

Management faces several questions:

Developing Marketing
1.How many test cities? Most tests use between two and six cities. The greater the
strategies, the greater the regional differences, and the greater the chance of test-
market interference by competitors, the greater the number of cities that should be
used.

2. Which cities? Each company must develop test-city selection criteria. One

company looks for test cities that have diversified industry, good media coverage,
cooperative chain stores, average competitive activity, and no evidence of being
over tested.
3. Length of test? Market tests last anywhere from a few months to a year. The
longer the product's average repurchase period, the longer the test period necessary
to observe repeat-purchase rates. This period should be cut down if competitors are
rushing to the market.
4. What information? Warehouse shipment data will show gross inventory buying
but will not indicate weekly sales at the retail level. Store audits will show retail sales
and competitors' market shares but will not reveal buyer characteristics. Consumer
panels will indicate which people are buying which brands and their loyalty and
switching rates. Buyer surveys will yield in-depth information about consumer
attitudes, usage, and satisfaction.

5. What action to take? If the test markets show high trial and repurchase rates, the
product should be launched nationally. If the test markets show a high trial rate and
a low repurchase rate, customers are not satisfied and the product should be
redesigned or dropped. If the test markets show a low trial rate and a high
repurchase rate, the product is satisfying but more people have to try it. This means
increasing advertising and sales promotion. If trial and repurchase rates are both
low, the product should be abandoned.
Test marketing permits testing the impact of alternative marketing plans. Colgate-
Palmolive used a different marketing mix in each of four cities to market a new soap
product: (1) an average amount of advertising coupled with free samples distributed
door to door, (2) heavy advertising plus samples, (3) an average amount of
advertising linked with mailed redeemable coupons, and (4) an average amount of
advertising with no special introductory offer. The third alternative generated the
best profit level, although not the highest sales level.
In spite of the benefits of test marketing, many companies question its value today.
In a fast-changing marketplace, companies are eager to get to market first. Test
marketing slows them down and reveals their plans to competitors. Procter &
Gamble began testing a ready-to-spread Duncan Hines frosting. General Mills took
note and rushed out its own Betty Crocker brand, which now dominates the
category. Furthermore, aggressive competitors increasingly take steps to spoil the
test markets. When Pepsi tested its Mountain Dew sport drink in Minneapolis,
Gatorade counterattacked furiously with coupons and ads.