Test marketing involves launching the product in

This preview shows page 50 - 52 out of 52 pages.

We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Understanding Basic Statistics
The document you are viewing contains questions related to this textbook.
Chapter 1 / Exercise 5
Understanding Basic Statistics
Brase/Brase
Expert Verified
distribution requirements for a full launch. Test marketing involves launching the product in small part (usually geographic) part of the target market in order to gauge the viability of a product or service in the target market prior to a main roll-out or launch. The aim of the test marketing is to gather as much information as possible about the elements of the marketing mix, including: The product itself The promotional message and media spend The distribution channels The price Sometimes several test markets (usually small ones) are used, with each testing different marketing mixes. The main benefits and disadvantages of test marketing can be summarized as follows: Advantages of Test Marketing Data provided is from actual customer spending Reduces the risk of a full-scale launch – if the product fails a test then significant costs may be saved Provides a way to tweak the marketing mix before full launch Can create a promotional "buzz" which supports the main launch 50 | P a g e
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Understanding Basic Statistics
The document you are viewing contains questions related to this textbook.
Chapter 1 / Exercise 5
Understanding Basic Statistics
Brase/Brase
Expert Verified
Disadvantages of Test Marketing Danger of the competition learning about the product and coming up with a response before the full launch Test market may not be representative of the full target market, leading to inappropriate decisions Delays in full launch may limit the revenue opportunity in markets subject to rapid change Costly and time-consuming to administer Product life cycle strategies Product life cycle “the course of product's sales and profit over its lifetime. '' Products typically go through four stages: 1 . Introduction After a period of development , the product is introduced or launched into the market. It gains more and more customers as it grows and, eventually, the market stabilizes and the product becomes mature. Then after a period of time, the product is overtaken by development and the introduction of superior competitors , goes into decline, and is eventually withdrawn. At each stage, marketing strategy varies. 2. Strategies for the Different Stages of the Product Life Cycle Introduction The need for immediate profit is not a pressure. The product is promoted to create awareness and develop a market for the product. The impact on the marketing mix and strategy is as follows: Product branding and quality level is established and intellectual property protection, such as patents and trademarks are obtained. Pricing may be low penetration to build market share rapidly or high skim pricing to recover development costs. Distribution is selective until consumers show acceptance of the product. Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and educate potential consumers about the product. 3. Growth Competitors are attracted into the market with very similar offerings. In the growth stage, the firm seeks to build brand preference and increase market share.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture