What is test marketing?

Test marketing is a staged process. Here are the common phases of test marketing:

• Concept testing

This stage of test marketing involves the testing of the initial concept of the product or service by measuring consumer interest and demand. This is done through focus groups, surveys, and other types of market research.

Concept testing is immensely beneficial because it can save a company a lot of money, in the event it chooses not to commit to the product or service due to poor test results. It can also help companies to adjust their offerings for additional concept testing or to move on to the next phase of test marketing.

• Prototype testing

Prototype testing consists of building a prototype of the product or service and testing with a small portion of target consumers. This gives a company the opportunity to receive important feedback from consumers on the offering's functionality, performance, or overall appeal.

• Market testing

This phase of test marketing involves doing a small and contained launch of the product or service in a limited geographical region, specific market segment, or specific distribution channel, to gauge its reception among a small audience and also to evaluate its potential for success in a more widespread launch.

Test marketing is an important process because it helps companies understand how their product is received by consumers on a small scale before they commit to the resources and expenses it takes for a larger launch. Test marketing also gives companies the incredibly valuable opportunity to gain specific insights and data on:

• Consumer preferences

• Consumer behavior

• Consumer attitudes

Test marketing is known to increase the possibility of success for a specific product or service, as well as provide valuable information to companies on their target consumer groups.