Test marketing is a technique used during product development to determine how people respond to a product. It can be used at many different phases of development to see whether or not the public will buy the product, how the product may need to be adjusted to make it appealing to the public, and how members of the public interact with the product. Using information from test marketing product developers can refine product to make them more commercially viable before embarking on a wide spread product launch.
One of the simplest forms of test marketing is online test marketing, in which a manufacturer produces a survey to determine whether or not members of the public even want a product. The survey can also provide useful data about how much people would be willing to pay for a product, whether or not people would travel to obtain it, what kind of features they would look for, and so forth. This form of test marketing can also be done though mail and phone surveys sent to a target area of the population.
Once a product is in development, companies can embark on test marketing which involves bringing actual examples of the public. They expose the product to a selected area of the public to see how they respond. For example, a car manufacturer might bring prototypes to a few major cities viewed as trend setters to see how people respond and to give people a chance to interact with the car or a manufacturer of potato chips night send out a new flavor to a select group of supermarkets, asking the supermarket to put it out on the shelf like a regular product and to monitor consumer response.
Companies use test marketing to gather information about public response to their products. This information may be used to totally rework on a product, or to add factures. The result of test marketing also informs the ad campaign, ensuring that ads are presented in a way which represents the product, hits the target audience, and makes people interested is purchasing the product. Marketing tests are critical and companies which fail to perform them can run into trouble when they start a major advertising campaign and product introduction.
All test marketing provides additional information in advance of a launch and may ensure that launch is successful. It is reported that, even at such a late stage, half the products entering test markets do not justify a subsequent national launch.