Market Testing

MT is a way to find out whether all our marketing efforts are

successful, before spending lots of time and money on the
launch.

Some common methods are – pseudo sale, controlled sale

and full sale.

In the recent times, there has been a shift from traditional

market testing methodologies like Test Marketing (selling the
product in two or more cities) to newer, cheaper and faster
techniques, in order to get reliable marketplace information.

Phase 1: Decide whether or not to Test?

Phase 2: Decide when to Test?

• What’s more critical – Time & cost vs. Success of launch
• If Time & Cost: Do Tests earlier when you have more time
and money left to save
• If Success of Launch, then later, as more we know about
the final product. The more we can learn from the market
testing.

Marketing test costs –

1. Direct cost for market research and test +

2. Cost of launch/rollout +
3. Loss in revenue a nation/wider launch would have
brought
Methods of Market test –
1. Pseudo Sale: As potential buyers to think/imagine that
the product is available on the shelves and they are
buying the product or create a make believe store. Key
elements are presentation. No risk, no cost for
customers. This can be done early on.

2. Controlled Sale: Buyer makes an actual sale. Sale is

conducted under controlled situations. Product is not
available for regular sale. This test is more vigorous
and revealing. For instance, tracking sales record –
yours and competitors, tweaking variables, monitoring
customer behaviour.

3. Full Sale: Firm has decided to fully market the product

but wants to do so, on a limited basis first. Soon will go
to full national launch.

4. Speculative Sale: You have the actual product. Have all

the concept tests, use tests and pseudo sales test to
asses’ customer response for the product. Works well
as opposed to cases when speculative sale has no
tangible product and doesn’t satisfy customers’
curiosity. Advertisement cost is min.

Simulated Market Tests

Collect consumer opinions and data, simulate and forecast
results.

Controlled Sale
Real purchasing with some controlled variables to get the
maximum out of the tests.
Test Markets vs Rollouts

Simply Salad

1. Concept Test – Survey asking users opinions (done)

2. Product use Test – Recipe/Salad Tasting tests (done

during development stage)

3. Market Tests –
1. Speculative/Pseudo Tests with sample recipes

2. Rollout with controlled attributes– First phase in

Commercial malls, Phase 2: CBD Areas.
Also, recipe and product rollouts in phases, after
monitoring the purchase behaviour.

Later tests are preferred as it gives us a better picture of our

target marketplace and consumers. Product Launch is the
more important factor here rather than development cost.