Consumer Goods Market Testing

In testing consumer products, the company seeks to estimate four variables: trial, first repeat purchase, adoption, and purchase frequency. The company hopes to find all of these variables at high levels. In some cases, however, it will find many consumers trying the product but few rebuying it. Or it might find high permanent adoption but low purchase frequency (as with gourmet frozen foods).

The major methods of consumer-goods market testing, from the least to the most costly, are:

^ Sales-wave research. Consumers who initially try the product at no cost are reoffered the product, or a competitor's product, at slightly reduced prices, as many as three to five times (sales waves). The company notes how many customers select its product again and their reported level of satisfaction.

^ Simulated test marketing. Up to 40 qualified buyers first answer questions about brand familiarity and product preferences. These buyers are invited to look at commercials or print ads, including one for the new product, then they are given money and brought into a store where they can make purchases. The company notes how many people buy the new brand and competing brands as a test of the ad's relative effectiveness against competing ads in simulating trial. Consumers are also asked why they bought or did not buy; nonbuyers receive a free sample of the new product and are reinterviewed later to determine product attitudes, usage, satisfaction, and repurchase intention.15

^ Controlled test marketing. A research firm manages a panel of stores that will carry new products for a fee. The company with the new product specifies the number of stores and geographic locations it wants to test. The research firm delivers the product to the participating stores and controls shelf position; number of facings, displays, and point-of-purchase promotions; and pricing. Sales results can be measured through electronic scanners at the checkout. The company can also evaluate the impact of local advertising and promotions during this test.

^ Test markets. When full-blown, the company chooses a few representative cities, the sales force tries to sell the trade on carrying the product and giving it good exposure, and the company unleashes a full advertising and promotion campaign in these markets. Here, marketers must decide on the number and location of test cities, length of the test, what to track, and what action to take. Today, many firms are skipping extended test marketing and relying instead on faster and more economical market-testing methods, such as smaller test areas and shorter test periods.

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