Test marketing is an experiment conducted in a field  laboratory compromising of actual stores and real-life buying situations,where the buyers is unaware of participation.

Tested marketing depends on different factors:

  • The investment cost and risk,time pressure and the research cost.
  • High investment and high-risk products where the chance of failure is high.
  • The amount of market testing is reduces if the company is having great time
    pressure because the season is just starting

There are two types of Test Marketing:

  1. Consumer Goods Market Testing
  2. Business Goods Market Testing

Importance of Test Marketing:

Many thousands of prospective customers are surveyed extensively to determine whether or not to bring a product to market. But in spite of the most extensive interviews and surveys, fully 80 percent of new products and services fail within the first year.The more you test your product before you produce and sell it, the more likely you are to earn the sales and profits that you desire.

Here’s how to begin:

  • Develop a prototype, model or description of the product or service that you can show to others.
  • Determine the price that you can sell the product for in the current marketplace.
  • Go to a potential customer with your sample or prototype and ask if he would buy it.
  • Compare your product with other products on the market.
  • Visit trade shows and exhibitions–they’re a terrific place to get immediate feedback on a new product.

Objectives and Process of Test Marketing:

Before starting commercial production of any product at a large scale, it is imperative to conduct test marketing of it. Test marketing involves the sending of goods in small quantities in selected markets in order to observe the response of the buyers.

Objectives of Test Marketing:

(a) Determining the potential of a new product.
(b) Selecting a new product from a number of possibilities.
(c) Determining the optimum price of a product.
(d) Determining We most effective advertising appeal.
(e) Determining the most effective advertising media.
(f) Determining the most effective sales promotion method.
(g) Evaluating alternatives in the area of sales.

Process of Test Marketing:
(a) Determining the Number of Cities.
(b) Duration of Test.
(c) Necessary Information.
(d) Drawing Conclusions.

Test marketing brings out the weakness of the product and marketing policies relating to it and provides a chance to improve them.