Test marketing is the trial sales that are conducted before selling a new product or service. Test marketing not only confirms market
needs
, but also has benefits such as reducing the risk of excess inventory and improving advertising and sales strategies.
This time, we will introduce test marketing, along with its purpose and specific implementation methods.
What is test marketing?
Test marketing is the practice of selling a new product or service on a trial basis for a certain period of time in a limited area before selling it. The purpose is to minimize risks when selling new products and services, predict sales when they are rolled out nationwide, and formulate effective production plans.
In the case of food and cosmetics, an example of test marketing is when a company hosts an event offering free samples or sells products on a trial basis at convenience stores in a specific area. The data obtained during the test period will also be used in marketing strategies.
As a result of test marketing, if we collect consumer feedback and get good reviews, we can expand nationwide and expand sales. On the other hand, if the evaluation is poor, we will consider reducing the scale of sales or canceling the sale.
Why is test marketing important?
There are three main reasons why test marketing is important.
objective judgment
Test marketing is conducted to determine whether there is demand for the product. We conduct tests to objectively determine whether a new product or service will be accepted by the market, and verify whether the expected demand exists.
If the test results are as expected, we will use the feedback obtained from the test to improve and sell our products and services. Additionally, if the expected results are not achieved, we may decide to discontinue sales.
Risk reduction
If you sell a new product or service nationwide without conducting test marketing and it does not sell at all, you will end up with an overstock situation, resulting in a huge loss. Test marketing has the advantage of being able to avoid these risks in advance.
You can check whether the needs of the target users are met, whether the sales direction is correct, and determine whether it is appropriate to invest funds for nationwide expansion. In addition, sales volume can be predicted appropriately, allowing efficient production planning with no waste.
Confirm target audience
Test marketing allows you to check whether your product matches the target group you have envisioned in advance. If you test market a product targeting women in their 20s and find that the main users are men in their 50s, you will have to rethink your marketing strategy from scratch.
By determining whether the target settings for a new product or service are appropriate, you can make adjustments to packaging, advertising, sales methods, etc., and approach the target more appropriately.
Main methods of test marketing
Test marketing can be divided into two methods:
online
and offline. It is important to understand and implement the advantages and disadvantages of each.
off-line
Offline allows you to get users’ real emotions and feedback that is closely related to their daily lives. On the other hand, the disadvantage is that it is difficult to measure accurate data like online.
①Test sales at real stores
This is a method of testing and selling products in a specific area on a trial basis. Generally, we conduct test sales in medium-sized cities, similar to when we roll out nationwide. The biggest advantage of selling at physical stores is that we can collect highly accurate data.
②Monitor survey
This is a method of distributing product samples so that customers can actually use them at home and get feedback. Survey methods include targeting new users and existing users. While you can get real feedback from new users, there is a risk of being recognized by other companies.
③Venue investigation
This is a method in which survey subjects are gathered at a designated venue. We will recruit survey participants in advance and ask them to come to the venue, or ask them to come by and talk to them around the venue. We conduct a survey by interviewing survey participants at the venue about their impressions of new products. This is a survey method that can be carried out even during development.
online
Online testing is easy in terms of cost and process, and because it guarantees anonymity, it is possible to obtain frank feedback from users. However, it is difficult to predict sales because it differs from the actual sales environment.
①Internet questionnaire survey
This is a method of sending new products to monitors, offering new services for free, and conducting surveys on the Internet. You can recruit monitors from various platforms to collect feedback from different user groups.
②SNS
By using SNS, you can gather many monitors. Also, like a survey, there are various SNS, so if you collect monitors from each SNS and conduct a test, you will be able to utilize the results in advertising and sales strategies.
③Crowdfunding
Crowdfunding is also an effective test marketing tool. The main purpose is to make people feel the value of a product or service and solicit investment, but it is possible to judge how much sympathy can be gained.
summary
Test marketing allows you to see user reactions before selling a new product or service and reduce sales risk. In addition, it is important to always verify the results of test marketing and utilize them in target setting, advertising and sales strategies, and carry out marketing activities.