Competency Group: Business
Description: Test marketing is the selective rollout of a product to a specific geographic region or demographic group. This is used to gauge the viability of a product or service in the mass market prior to a full-scale roll-out. The criteria used to judge the acceptability of a test market region or group include: a population that is demographically similar to the proposed target market; and relative isolation from densely populated media markets so that advertising to the test audience can be efficient and economical. The test market ideally aims to duplicate 'everything' — promotion and distribution as well as 'product' — on a smaller scale. The technique replicates, typically in one area, what is planned to occur in a national launch; and the results are very carefully monitored, so that they can be extrapolated to projected national results.
Citation for Description: Test market. (2011). Retrieved from Wikipedia, http://en.wikipedia.org/w/index.php?title=Test_market&oldid=455864698.
Advantages: Identifies new product areas and the needs and wants of consumers. It also determines demand for a product and aids in the design of a product that fulfills customer needs.
Limitations: Can lead to faulty marketing decisions based on improperly analyzed data and can create unrealistic financial projections if information is interpreted incorrectly.
Target Audience: Marketing
Relevant to Universal Design: Yes
Stages and Steps: 7.13
Free Resource: Foo, J. (2009). Powerful marketing toolkit from marketing experiments. Retrieved from E-Money Marketing website: http://emoneymarketing.com/tips-and-tricks/powerful-marketing-toolkit-from-marketing-experiments/.
Purchase Resource: Klompmaker, J. E., Hughes, G. D., & Haley, R. I. (1976). Test marketing in new product development. Retrieved from Harvard Business Review website: http://hbr.org/product/test-marketing-in-new-product-development/an/76309-PDF-ENG.