This document discusses test marketing and provides examples of its use. It begins with an introduction that defines test marketing as an experimental procedure conducted under realistic market conditions to test new products or marketing plans. It then provides details on 4 main types of consumer goods market testing: 1) sales wave research, 2) simulated test marketing, 3) controlled test marketing, and 4) test markets. Each method is described in 1-2 sentences. It also briefly discusses business goods market testing and mentions disadvantages of test marketing. Specific examples of test marketing McLobsters and products by Reliance Home Products are also referenced.

1. PRESENTED
BY:
Anil mundra; roll no. 11
Atul Kumar ;roll no. 15

2. INTRODUCTION:
 An experimental procedure that provides an
opportunity to test a new product or a new marketing
plan under realistic market conditions.

3.  Test marketing is an experiment conducted in a field
laboratory (the test market) comprising of actual stores
and real-life buying situations, where the buyers is
unaware of participation.
 test marketing may last from few weeks to
several months.

4. Market testing depends on different factors:
 The investment cost and risk , time pressure and the research
cost .
 High investment-high risk products where the chance of failure
is high.
 High risk products those who creates new product categories or
have novel features.
 The amount of market testing is reduced if the company is
having great time pressure because the season is just starting.

6. CONSUMER GOODS MARKET
TESTING:
1. Sales wave research
2. Simulated test marketing
3. Controlled test marketing
4. Test markets

7. 1. Sales wave research:
 In sales wave research a consumer who initially tried
the product at no cost are reoffered it, or a competitor’s
product at slightly reduced prices. The offer may be
made as many as five times (sales waves), while the
company notes how many consumers selected the
product again and their reported level of satisfaction.
 It’s quick, secure, and can be carried out without final
packaging.

8. 2. Simulated test marketing:
 30 to 40 qualified shoppers were called and questioned brand
familiarity and preferences in a specific product category.
 These consumers attended a brief screening of well known as
well as new TV commercials or print ads.
 Consumer are provided small amount of money and they are
invited to a store where they may buy any items.
 This provides a measure of the ads relative effectiveness against
competing ads in the market.
 This method gives fairly accurate result of effect of ads and trial
rates. The results are incorporated in to new product
forecasting model to project ultimate sales levels.

9. 3. Controlled test marketing:
 A panel of stores carries new product for a fee.
 Specific number of stores and geographic location.
 Controlled shelf position; number of facings,
 Sales are measured at check out.
 A sample of consumers interviewed later to give their
impression of the product.
Disadvantage:
 This technique exposes the product and its
features to competitors’ scrutiny.

10. 4. Test markets:
 Few representative cities,
 Good shelf exposure.
 Full Advertisement and Promotion campaign.
In this method company have to take following decisions:
- HOW MANY TEST CITIES?
- WHICH CITIES?
- LENGTH OF TEST?
- WHAT INFORMATION TO BE COLLECTED?
- WHAT ACTION TO TAKE?

11. BUSINESS GOODS MARKET TESTING:
 Expensive industrial goods and new technologies will normally undergo two
type of test marketing.:
 Alpha testing (within the company)
 Beta testing (with outside customers)
 During beta testing the company’s technical people observes how test
customers use the product.
 The company can also observe how much value the equipment to the
customers operation as a cue to subsequent pricing.
 The company asks test customers their purchase intention and other reaction
after the test.

12. Disadvantages:
 Customer who comes in might not represent the target
market.
 Customer might place early orders that can’t be filled.

13. Test Marketing of McLobsters:

14. Reliance Home Products: FMCG Test Marketing

15. The End