Evaluate the usefulness of test markets as a market research method.

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  • Created by: jerd
  • Created on: 30-04-23 14:55

Evaluate the usefulness of test markets as a market research method.

Advantages

  • data provided is from actual customer spending
  • reduces risk of full-scale launch - if product fails a test then significant costs may be saved
  • provides a way to tweak the marketing mix before full launch
  • can create a promotional 'buzz' which supports main launch

Disadvantages

  • danger of the competition learning about the product + coming up with a response before full launch
  • test market may not be representative of full market - leading to inappropriate decisions
  • delays in full launch may limit revenue opportunity in markets subject to change
  • costly + time consuming to administer

Evaluation

A 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 roll-out. The aim of test marketing is to gather as much info. as possible about the main elements of the marketing mix. 

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