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Marketing Basics - Kotler Philip

Market Testing

If the car has successfully passed functional tests and consumer testing, the company produces a small batch of machines for testing in market conditions. At this stage, the product and the marketing program are tested in an environment that is closer to actual use in order to identify the views of consumers and dealers on the controllability of the machine, the features of its use and problems of resale, as well as determine the size of the market.

Test methods in market conditions vary depending on the type of product. (An example of testing under market conditions is given in Box 23.) A firm that tests packaged consumer goods will probably want to get rough data on when and how often consumers purchase its goods. Based on these estimates, a general sales forecast can be made. The firm hopes that the estimates will be high. However, it often turns out that many consumers who have tested the product do not make a repeat purchase, thereby expressing some dissatisfaction with it. It may turn out that a repeat purchase made once, then almost never repeats. Or, a high rating of a product may be accompanied by a low frequency of purchases (as is the case with many frozen delicacies), because customers decide to use the product only on special occasions.

Box 23. Trial marketing saves goods - Dream Whip cream

After conducting extensive laboratory tests of the product and testing it under consumer domestic use, General Foods Corporation decided that its new Dream Whip, heavy cream for whipping, was ready for sale in several trial markets in order to obtain data on how much consumers will buy goods in real market conditions. For trial marketing, the markets of five cities were selected - Indianapolis, Huntington, Louisville, Columbus and Cincinnati, which made it possible to test different marketing complexes and different levels of appropriations. In addition, the performance of just one or two cities could be atypical due to weather conditions, competitors' maneuvers, etc.

Dream Whip Cream was launched in October and received a very positive response. However, by June next year, inventories began to grow. Letters with complaints about the goods began to come from consumers. General Food researchers examined complaints and found that in hot weather, cream often stopped whipping. The management decided to postpone access to the national market. Instead, the number of trial markets was increased - the cities of Boston, Detroit and Pittsburgh were connected to them during the cold weather months in order to accumulate consumer information and reduce inventory. Meanwhile, the research and development department was looking for a solution to the problem. The answer was found a year later, and the necessary changes were made to the product formula. Creams made using the new formula have been successfully tested in hot weather in all trial markets. Thus, the new product was finally ready to enter the national market. The costs of trial marketing were negligible compared with the losses incurred by the company, if it were immediately involved in nationwide marketing.