Market research is a huge industry that provides important information to companies that supply various goods and services. Market testing is used in order to evaluate consumers’ responses to new goods and services and gauge various marketing strategies. No company can sell a product that buyers do not have a need for. That is why, market researches and tests are essential to help manufactures understand what customers are looking for.
One of the efficient uses of test marketing data is high visibility to the potential customers of new products at the market. Almost every market test involves total marketing assaults that help increase the visibility of goods and services to customers. Due to this, manufacturers can get an insight into the importance, demand and success of their goods and services. Detailed customer feedbacks are very important to improve the efficiency of the products provided by the manufacturers.
Among the limitations of test market information, there are competition awareness, costs and accuracy of test information. Manufacturers have no desire to tip off the competition of new goods. In certain cases, this works to the disadvantage of manufacturers. Marketing a new product in the test region may require extremely high costs. The most expensive method of test marketing is product sampling. Among the cheaper methods, there are Simulated Test Marketing that recruits potential customers while they do shopping, and Scanner Based Marketing that tracks what customers buy in a small test environment. The preciseness of test information plays a very important role as one would presume that in the testing of new goods and services, customers may not be informed enough to make precise judgments of the tested products. The results of testing may also be skewed by such external factors as competitor counter attacks or exceptional economic conditions.