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With companies launching new products every day and the market giving us hundreds of choices for the same product, consumer behavior is fluctuating constantly. New trends and evolving interests have become harder to track and even harder to deliver successfully.
So, when launching a new product, it is essential to gain valid, reliable, and timely insights from the target market. Test marketing is one efficient feedback mechanism companies adopt to gather real-time feedback and adjust strategies to ensure it resonates with the audience and maximizes the ROI.
In this blog, we’ll explore the significance of test marketing and how it helps your business gauge the potential of a product/service in the target market.
As an organization, certain strategies and products emerge that everyone collectively thinks as a good move. But how do you know they’d definitely work in favor of the company? This is where test marketing comes in.
Test marketing is a method used by most companies to see whether their products and marketing strategies are efficient and valid enough to give them a go. Businesses use test marketing to gain insights into what the customers are expecting and what they want. Performing test marketing is basically doing field research in the market (testing the market) without customer participation.
Test marketing helps you see how your product or marketing strategy is going to work on customers and the market. It also helps you understand the competition and how you can upskill the way you develop, promote and maintain certain services.
It helps evaluate four aspects of a product/service’s journey in the market. These are:
The insights help you identify customer preferences, needs, and pain points to meet their expectations at every turn and pivot the strategies to align with what resonates with your customers.
“We execute hundreds of product-test surveys each year. Voxco Multi-Mode has allowed us to perfectly synchronize our different data collection methods, whether we’re recruiting on the street, testing products in a controlled virtual environment, or getting feedback over the phone.” – Luc Milbergue, CEO, Stratégir
The process helps you evaluate how the real-world appeal and potential of your product/service. It helps you navigate the feasibility of the product in the target market with all your competitor’s products. Some key advantages of test marketing include the following.
Conducting a test market allows the product to sell itself in a better market. Once the product’s value is clear enough, customers will prefer your product over any competitor’s product. Test marketing makes it likely that the products will leave a good impression on the customers, which they will stick to as a loyalty.
Additionally, it helps you evaluate how well-suited it is in the real-world setting. You can determine the weaknesses and potential issues in the product/service that may lead to disastrous outcomes. The test empowers you with the right insight you need to ensure it can successfully last for a longer period of time in the market.
Test marketing also gives you a competitive edge over competing products. Although providing a free product trial to customers may not be in your best interest, you have to do it anyway because of what the competitors are offering them simultaneously.
Not offering a free trial might then damage the company’s image. The focus should be more on how you present your product to them so they move past the trial phase and choose to buy it again.
Customers using the product for the trial are likely to give honest feedback. You could use this honest feedback in the test marketing phase rather than launching the product in the market on a large scale and later on finding out the issues people are facing with your services.
You can ask each trialist to upload pictures and videos of their experience and doubts, if any. This gives you scope to change your product and make it better.
It helps you sync the customer interest with the company values. When you offer a free trial of the product to customers, you should make sure they know what the product is for. Make them see how their interests align with what the company is looking to provide as a value.
Launching the product on a full scale in the market requires higher costs. Testing the market before taking that risk will give you all the areas in which the product needs improvements and how it can be better. This will help you reduce the risk that goes behind full-scale production and supply of the products.
This allows you to identify gaps in your marketing approach and refine your strategies to anticipate any roadblocks. The insight enables you to tailor the marketing content based on the various customer segments engaging with the product/service.
You can gather insights from the target consumers and fine-tune your marketing and promotional tactics along with product development. This lets you ensure that your strategies respond to the interests and desires of the consumers, hence maximizing return on investment.
In this section, we will look into two key types of test marketing – based on the different audiences in your market and based on the process of data collection.
Each test marketing is unique and helps you learn more about the different consumer segments. Here we will look into three types based on the audience you want to focus on.
Consumer goods:
This type helps you evaluate all the products/services that your in direct use by your consumers. The aim is to understand and learn about consumers’ behavior towards the product and gather reliable data. Customer experience or customer satisfaction surveys are some ways you can gather data directly from customers to assess their opinions.
Industrial testing:
Industrial products include goods that are used in manufacturing other products. There are two ways the company tests products in this setting:
Alpha testing – Here, the company distributes the prototype inside the company to gather feedback.
Beta testing – Here, the company invites some real users or gathers feedback from users at an event.
Marketing-effectiveness:
Also known as A/B testing is a common type of test marketing in digital marketing. This test helps you assess the effectiveness of a marketing campaign. For example, you can run two similar campaigns on different channels but with two different CTA or target different audiences. This will help you gauge which campaign brings the most value.
Here we will explore three types of test marketing where you can leverage surveys to gather data from consumer directly.
Controlled test marketing:
To conduct this type of test market, you choose an audience in a defined environment. Your selected focus groups represent the target population to evaluate the strategies and offerings before a full-scale launch closely.
By gathering feedback live, you can see your efforts may fare in the real market. You can leverage mobile-offline survey tools to gather data in a portable device in real-time.
Simulated test marketing:
In this type you simulate the market conditions to imitate customer behavior and preferences. For example, a departmental store invites a group of people and offer exclusive discount on certain items. The store distributes a sample of the new product that they want to test, to get the customers acquainted with it.
The store places old products or competitors’ products along with new products to observe customers’ preferences.
Standard test marketing:
This is also seen as the soft launch of a product/service in a chosen geography that represents the characteristics of the target population. A popular and traditional approach, the process allows you to introduce your product to a handful of people and gather honest feedback. You can leverage online survey tools and send a survey link to all the involved customers to gather their feedback once they have become acquainted with the product.
See how Voxco can enhance your research efficiency.
For a successful business and market leader, you need to be agile and data-driven. Test marketing helps you capture relevant and valid insights you need to make informed decisions aligning business goals with customer needs.
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