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Test marketing: Definition and Benefits

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MARKET RESEARCH BRAND AWARENESS2
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What is test marketing?

As an organization, there come up certain strategies and products that everyone collectively thanks is a good move to make. But how do you know it’d definitely work in favor of the company. If only there was a way to know beforehand that these solutions would work right? Well, 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 on what the customers are expecting and what they want. Performing test marketing is basically doing field research in the market (testing the market) without the customer participation.

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Why do you need test marketing?

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.  

The test is conducted in a way like below:

  • Trial – if the customer will buy the product at least once. 
  • Repeat – whether the customer will re-buy the product after the first trial.
  • Adoption – whether the customer adopts the product and is happy using it. 
  • Frequency – how often will the customer buy that product.

10 benefits of test marketing to businesses

  • Test marketing gives the product a chance to sell itself in a better market. Once the value of the product is clear enough, customers will prefer to buy your product over any other competitor product. Test marketing makes it likely for the products to have a good impression on the customers to which they will stick to as a loyalty.
  • Test marketing also gives you a competitive edge over the other competing products. Providing a free product trial to the customers sometimes might not be in your best interest but you have to pull it off anyway because of what the competitors are offering them simultaneously. Not offering a free trial might then look bad for the company image. The focus here should be more on how you are presenting your product to them so they move past the trial phase and choose to buy it again. 
  • Invest the time in the brand. Test marketing promotes putting more time and effort into testing the product and marketing plans. Looking at your product’s performance, branding, and marketing will only get you to know your audience more. 
  • Product feedback is received. Customers using the product for trial are likely to give honest feedback. For all the right reasons, you could really 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 a scope to still change your product and make it better. 
  • Give incentives to the trialists. Once the customer fence tries your product and gives honest feedback, they tend to buy the final product. You can give them some incentives or discounts on those products as a token of thanking them for participating in the trial. One more way to promote and increase your sales is by giving them referral incentives and discounts too.

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  • Test marketing gives a sense of urgency to the customers. After the free trial ends, customers feel a sense of urgency into buying the product and focus on what are the pros and cons of owning that product. And the one thing we know about urgency is that it forces decisions. When the customers feel the sense of a product running out of stock, it compels them into buying it as soon as possible. 
  • It helps you sync the customer interest with the company values. When you offer the free trial of the product to customers, you should make sure they know what the product is for. Make them see how their interests are aligning with what the company is looking to provide as a value.
  • Test marketing can tell you more about your leads. Once you give out free trials and still the audience has no signs of responding or buying the product, you know your lead is going cold. Well, many participants will take the trial with no intention of buying the final product. But still, there are many trialists that are excited to see how the product turns out. This will tell you a lot about where your lead is and what they think of your product. 
  • Customers provide the actual data based on their spending. The products sent from trial can be replicated based on the customer feedback. Brands will have an idea on how the product will do when finally put up on the market. The data captured from the customer tells you the cost behind packaging, size and price of the product once it is in the market. 
  • Test marketing reduces the risk of full-scale launch. Launching the product on 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.
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