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To select a test market, a firm must choose one or several cities (usually small and demographically representative of the target market) for the test. (2) A controlled test market involves contracting the entire test program to an outside service. The service pays retailers for shelf space and can therefore guarantee a specified percentage of the test product’s potential distribution volume. Firms like SymphonyIRIGroup’s BehaviorScan assist marketers inselecting test market cities that must include cable systems to deliver different ads to different homes and tracking systems like those of to measure sales resulting from different advertising campaigns, grocery scanners to measure sales based on other manipulations of selected marketingmix variables such as price, and distribution. (3) To save time and money, companies often turn to simulated (or laboratory) test markets (STM),a technique that replicates a full-scale test market to a limited degree. STMs are often run in shopping malls, where consumers are questioned to identify who uses the product class being tested. Next, qualified participants are shown the product or the product concept and are asked about usage, reasons for purchase, and important product attributes. Then they see the company’s ads for the test product along with those of competitors. Finally, participants are given money to decide to buy or not buy the firm’s - 97 -
or the competitors’ product from a real or simulated store environment.Page(s):259LO: 5AACSB: AnalyticQD: Hard10-305TEST MARKETINGCOMPREHENSIONExplain why NOTall products can use test markets.Answer:Not all products can use test markets. Test marketing a service is very difficult because it is intangible and consumers can’t see what they are buying. For example, how do you test market a new building for an art museum? Similarly, test markets for expensive consumer products such as cars or costly industrial products such as jet engines are impractical. For these products, reactions of potential buyers to mockups or one-of-a-kind prototypes are all that is feasible.Page(s):259LO: 5AACSB: AnalyticQD: Medium- 98 -