Exam 12: Developing and Managing Products

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Test marketing provides several benefits. It lets marketers expose a product in anatural marketing environment to measure its sales performance. A company canstrive to identify weaknesses in a product or in other parts of the marketing mix. Aproduct weakness discovered after a nationwide introduction can be expensive tocorrect. Moreover, if consumers' early reactions are negative, marketers may beunable to persuade consumers to try the product again. Thus, making adjustmentsafter test marketing can be crucial to the success of a new product. On the otherhand, test marketing results may be positive enough to warrant accelerating theproduct's introduction. Test marketing also allows marketers to experiment withvariations in advertising, pricing, and packaging in different test areas and to measurethe extent of brand awareness, brand switching, and repeat purchases resulting fromthese alterations in the marketing mix.Test marketing is not without risks. It is expensive, and competitors may try tointerfere. A competitor may attempt to "jam" the test program by increasing its ownadvertising or promotions, lowering prices, and offering special incentives, all tocombat the recognition and purchase of the new brand. Sometimes, too, competitorscopy the product in the testing stage and rush to introduce a similar product. It isdesirable to move to the commercialization phase as soon as possible after successfultesting.