Discuss the advantages and problems associated with test marketing.

Question

What will be an ideal response?

Answer 1

Test marketing provides several benefits. It lets marketers expose a product in a natural marketing environment to measure its sales performance. A company can strive to identify weaknesses in a product or in other parts of the marketing mix. A product weakness discovered after a nationwide introduction can be expensive to correct. Moreover, if consumers' early reactions are negative, marketers may be unable to persuade consumers to try the product again. Thus, making adjustments after test marketing can be crucial to the success of a new product. On the other hand, test marketing results may be positive enough to warrant accelerating the product's introduction. Test marketing also allows marketers to experiment with variations in advertising, pricing, and packaging in different test areas and to measure the extent of brand awareness, brand switching, and repeat purchases resulting from these alterations in the marketing mix.Test marketing is not without risks. It is expensive, and competitors may try to interfere. A competitor may attempt to "jam" the test program by increasing its own advertising or promotions, lowering prices, and offering special incentives, all to combat the recognition and purchase of the new brand. Sometimes, too, competitors copy the product in the testing stage and rush to introduce a similar product. It is desirable to move to the commercialization phase as soon as possible after successful testing.