Group Members
Senthil Kumar
 Shivani Mittal
 Pritam Sawant
 Amol Naik
 Parvez Modi
 Tintu Rajan
 Shoaib Alim
 Akash Patil

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14
24
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What is a Test Marketing?

Test marketing is a technique used
during product development to
determine how people respond to a
product.

Test market is a geographic region or
demographic group used to gauge the
viability of a product or service in the
mass market prior to a wide scale rollout.
Death of an idea

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
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
10% of ideas reach the test market
stage
50% of new products fail in test
marketing
50% of those fail on national launch
only 2.5% ever enter the marketplace
1 entrant for every 64 ideas
the average new product that fails costs
about $50 million
some product failures have losses of
over $100 million for some companies
Purposes of Test Market
To observe consumer behavior
 Helps to assess potential problem areas
 provides a great deal of information
 often used to make profit and sales
forecasts

Pros and Cons of Test Marketing
Advantages:


Disadvantages:
Risk Reduction

Cost
 monetary risk
 channel relationships
 sales force morale

Time (9-12 months+)
 hurt competitive advantage
 competitor may monitor
test market
 competitor may go national
Strategic
Improvement
 marketing mix
 production facilities

Competitor can disrupt
test market
•While
Procter & Gamble was busy test-marketing its
soft chocolate chip cookies, both Nabisco and Keebler
rolled out similar cookies nationwide.
•The
same thing happened with P&G’s Brigade toiletbowl cleaner. It was in test marketing for three years,
during which time Vanish became established in the
market.
Process

Establish Goals
Conduct a Test with Select Customers
 Conduct a Regional Launch
 Select an Area That Matches Your
Target Market
 Use Media Resources Wisely

Conduct Research Before and After
Testing
 Evaluate Distribution Channels
 Evaluate Competitive Response
 Use Direct Marketing
 Conduct an Online Test

What to Avoid

You Don’t Test the Market
You Choose a Test Area That Doesn’t
Reflect Your Market
 You Fail to Evaluate Factors Critical to
Success

Alternative to test marketing
Single source reserch in super market
 Simulated labrotary market testing

Case study

TATA PUSH TO TALK
Simulated test marketing

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Created in the 1960s from the Yankelovich,
Skelly and White Inc .
According to Joseph Willke President, AC
Nielsen BASES (2003) it is an alternative
to test marketing, which is slower, more
expensive, and less secure.
Create a false buying situation and observe
what the customer does.
Follow-up with customer later to assess
likely repeat sales.
Often used for consumer nondurables.
Simulated Test Market Procedure
Mall intercept.
 Self-administered questionnaire.
 Advertising stimuli.
 Mini-store shopping experience.
 Post-exposure questionnaire.
 Receive trial package.
 Phone follow up and offer to buy more.

Possible Drawbacks to STMs

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Mathematical complexity
False conditions
Possibly faulty assumptions on data, such
as number of stores that will make the
product available
May not be applicable to totally new-to-themarket products, since no prior data
available.
Does not test channel member response to
the new product, only the final consumer
Marketing plan
of
new product
Consumer Insight
Competitive Analysis:
Competitors Analysis
Market Data
Market Share Data
Target Market
Segmentation:
Demographic Segmentation
Positioning
Personality and life style:
Seven P’s of Marketing Mix
pertaining to the new product
Product
Process
price
Physical
evidence
promotion
Place
people
Promotion
Promotional Budget:
Public relations:
Creative strategy:
Brand Activation:
Media strategy:
Punch Line:
Electronic media:
Print: Newspapers, Magazines, Hoardings
and Billboards
What is a target market?

Market – The set of all actual and
potential buyers of a product or service.

Target Market – A set of buyers sharing
common needs or characteristics that
the company decide to serves.
How do we determine who to
target?

Three key factors to target market
selection:
 Segment size and growth
 Segment structural attractiveness
 Businesses objectives and
resources
Developing a Target Market
Market Segmentation
1) Identify basis for
segmenting market.
2) Develop Segment Profile
Market Targeting
3) Develop measure of
segment attractiveness
4) Select target segments
Market Positioning
5) Develop Positioning for
target segments
6) Develop a marketing mix
for each segment
Market Segmenting –dividing a market into smaller
groups of buyers with distinct needs, characteristics,
behaviors, etc. that might require separate products or
marketing mixes.
Characteristics to analyze
Demographic
Analysis
 Age
 Gender
 Geographic location
 Annual Income
 Marriage Status
 Education level
Psychographic
Analysis
•What do they VALUE
•Price
•Entertainment
•Convenience
•Safety
•Travel distance
•Activities
Target Market ( In short)
Product positioning involves tailoring an entire marketing
program including product attributes, image, and price, as well
as packaging, distribution, and service to best meet the needs of
consumers within a particular market segment.
General Product Positioning Process:
1)
•
•
The Target Customer:
It is the person at whom the product is aimed.
Target customer can be defined by age, sex, location, attitude
etc.
2)

3)
4)
The Market in which the Product Competes:
The competitiveness in the existing products
in the market and the companies vision.
Collecting information from a sample of
customers about their perceptions of each
product on the relevant attributes.
Determine each product's current location in
the product space.
Positioning Concepts:

Functional positions
 Solve problems
 Provide benefits to customers
 Get favourable perception by investor and lenders

Symbolic positions
 Self-image enhancement
 Ego identification
 Belongingness and social meaningfulness
 Affective fulfilment

Experiential positions
 Provide sensory stimulation
 Provide cognitive stimulation
Product Strategy
”Product strategy begins with a strategic
vision that states where a company
wants to go, how it will get there, and
why it will be successful.”
”Product strategy is like a roadmap, and
like a roadmap it’s useful only when you
know where you are and where you
want to go.”
What is Product
Strategy?
•
Price is the only revenue generating element.
A well chosen price should do three things:
• Achieve the financial goals of the company
• Fit the realities of the marketplace
• Support a product's positioning and be consistent with the other
variables in the marketing mix.
PROCESS OF PRICING
Develop marketing strategy
2. Make marketing mix decisions
3. Estimate the demand curve
4. Calculate the cost
5. Understand the environmental factors
6. Set pricing objectives
7. Determine pricing
1.
PRICING STRATEGIES
Price lining
 Promotional pricing
 Premium pricing
 Goldilocks pricing
 Demand-based pricing
 Multidimensional pricing

Advertising
Advertising is a form of communication
used to influence individuals to purchase
products or services or support political
candidates or ideas.
 Advertising is communication used to
influence individuals to purchase
products or services or support political
candidates or ideas.

Types of advertising
Television
 Infomercials
 Radio advertising
 Print advertising
 Online advertising
 Billboard advertising
 Etc…

Product-Oriented Advertising
 Image Advertising
 Advocacy Advertising
 Public Service Advertising

THANK YOU