Session 19, New Products 2 Market Testing

Session 19, New Products 2 Market Testing - New Products 2:...

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1 New Products 2: Market Testing Session 19 Introduction to Marketing Professor Greenleaf Fall 2011
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2 Today’s Agenda Market testing Full scale test markets Evaluating results with Awareness-Trial- Repeat models Pre-test markets
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3 Market Testing Suppose we have a new product that has done well in the first five stages of new product development process Can go ahead and introduce it Likely to cost $20 million - $500 million Or should we use market testing to get a more accurate test of whether the new product will succeed?
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4 Market Testing Forecast product’s sales Make Go / No Go decision Fine-tune marketing mix if we do decide to introduce new product Most market testing is a marketing experiment
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5 Full Scale Test Markets Introduce in stores in test-market cities Use full scale marketing effort - scale to actual budget in Business Plan for new product FSTMs typically run 6 - 18 months Measure sales and survey consumers Can also use scanner-based consumer panel
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8 Objective 1: GO - NO GO? Set benchmarks in advance GO : >$30MM estimated national sales NO GO: <$20MM “ Unsure: $20-30MM Explain deviations from Business Plan. FSTM sales alone do not provide enough information to make good decision Must diagnose test market results Awareness-Trial-Repeat model x
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9 Awareness-Trial-Repeat Model Forecast market share =
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Session 19, New Products 2 Market Testing - New Products 2:...

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