Consumer testing and Market testing

When the prototypes are ready, they must be put through rigorous functional tests and customer tests. Alpha testing is the name given to testing the product within the firm to see how it performs in different applications. After refining the prototype further, the company moves to beta testing with customers. It enlists a set of customers to use the prototype and give feedback.

Consumer testing can take several forms, from bringing consumers into a laboratory to giving them samples to use in their homes. In-home placement tests are common with products ranging from ice cream flavors to new appliances. When Dupont developed its new synthetic carpeting, it installed free carpeting in several homes in exchange for the homeowners’ willingness to report their likes and dislikes about the product.

Consumer preferences can be measured in several ways. Suppose a consumer is shown three items – A, B, and C as three cameras, three insurance plans, or three advertisements.

The rank order method asks the consumer to rank the three items in order of preference. The consumer might respond with A>B>C. Although this method has the advantage of simplicity, it does not reveal how intensely the consumer feels about each item or whether the consumer likes any item very much. It is also difficult to use this method when there are many objects to be ranked.

The paired comparison method calls for presenting pairs of items and asking the consumer which one is preferred in each pair. Thus the consumer could be presented with the pairs AB, AC, and BC and say that she prefers A to B, A to C, and B to C. Then we could conclude that A>B>C. People find it easy to state their preference between two items, and this method allows the consumers to focus on the two items, noting their differences and similarities.

The monadic rating method asks the consumer to rate liking of each product on a scale. Suppose a seven point scale is used, where 1 signifies intense dislike, 4 indifference and 7 intense like. Suppose the consumer returns the following ratings: A = 6, B= 5, C= 3

We can derive the individual’s preference order (i.e. A>B>C), and even know the qualitative levels of the person’s preference for each and the rough distance between preferences.

After management is satisfied with functional and psychological performance, the product is ready to be dressed up with a brand name and packaging, and put into a market test. The new product is introduced into an authentic setting to learn how large the market is and how consumers and dealers react to handling, using and repurchasing the product.

Not all companies undertake market testing. Primarily higher priced items not geared for mass distribution would be unnecessary for market test. In this case when a company develops a new product, say an improved liquid makeup, the marketer knows it’s going to sell because of familiarity of the company in the field. They may also resort to several demonstrators in department stores to promote it. Many companies believe that market testing can yield valuable information about buyers, dealers, marketing program effectiveness and market potential. The main issues are: How much market testing should be done, and what kind(s)?

The amount of market testing is influenced by the investment cost and risk on the one hand, and the time pressure and research cost on the other. High investment – high risk products, where the chance of failure is high, must be market tested; the cost of the market tests will be an insignificant percentage of the total project cost. High risk product those that create new product categories (first instant breakfast drink) or have novel features (first gum strengthening toothpaste) – warrant more market testing than modified products (another toothpaste brand).

The amount of market testing may be severely reduced if the company is under great time pressure because the season is just starting or because competitors are about to launch their brands. The company may therefore prefer the risk of a product failure to the risk of losing distribution or market penetration on a highly successful product.