Product and Market Testing in Firms
The process of conducting marketing research is often used with product testing procedures. This is done to choose a strategy for promoting this product on the market. In the process of testing, the advantages and disadvantages of this product are identified, in the opinion of the consumer, and a comparative analysis of these products is made with similar products produced by competitors. In addition, the results of product testing in the framework of marketing research should evaluate the competitive environment of this product, if the product has already been released to the market, and assess the main risks of introducing a new product.
Product testing is an essential part of the development and market integration workflow. Generally, such research and testing are carried out annually; however, if competitors pursue an aggressive policy of introducing into the market and produce a large number of new products, it will be useful to assess the competitive environment more often. This testing is aimed at correctly assessing how customer preferences are changing, how competitors react to these changes, which product is currently the leader in this market segment, and making a detailed comparative analysis of the products available in this market segment. With this testing, two parameters must be taken into account: the scale of losses in case of choosing the wrong product promotion strategy and the possible profit when choosing the right promotion strategy.
Furthermore, the release of a new product to the market is always associated with aggressive competitive struggle: the range of consumers of this product will be formed from consumers of competitors’ products, and the test accompanied by a bias on the opinion of consumers. Those who currently use brands of competitors, with the right strategy chosen, may later become new customers. Such testing is carried out before each release to the market of new products.
There are quantitative and qualitative methods for testing products. Quantitative surveys are conducted through reviews: questionnaires, telephone surveys, and personal interviews. These are methods that allow getting the same type of information from consumers; the main thing is the installation of a certain pattern in the opinions of the buyers of the goods. The example of manufacturing companies Atlas and Gaia is an interesting one because the competitive product testing is demonstrated. Qualitative testing is a group discussion in focus groups, in-depth interviews, and other methods that require a deeper analysis, identifying the motives that motivate people to buy a particular product.
The goal of any marketing testing is ultimately the formation of the company’s strategy and tactics, taking into account the actually existing and potentially possible market factors and conditions, on the one hand, and its position and prospects, on the other. At the same time, the essence of the research traditionally consists not in establishing some absolute truth, but in reducing the level of uncertainty of the market situation, especially with a long-term forecast. Based on well-conducted research, the company can reduce business risks and potential losses. Specific demand for such research arises where the market is surplus, and the advantage is not with the seller, but with the buyer.
Testing is carried out in different ways: factors such as the subject of the test, the place where the measurement is conducted, which target audience is being tested, and how many products are being evaluated, affect this difference. By the nature of the target audience, testing is divided into examinations conducted among users of certain brands of products or marketing strategy, among people who make purchases in a particular sector: malls, street markets, luxury shops, as well as among people who own the right on making decisions about shopping in the family. On the subject of testing, there are: testing the price of products, testing the product itself, testing the concept of products and advertising policy, testing the name of the product and its packaging.