Three Types of Test Marketing and Their Importance

Have you ever noticed how people dip their toes before jumping in a pool? Market testing is similar to dipping your toes to test the market before committing resources. In this article, we define what the three types of test marketing are and how they affect your campaign

What is Test Marketing?

Test marketing refers to the process by which a company launches a product or advertisment to a tightly targeted group before its official launch. In digital marketing, test marketing evaluates the potential of a particular marketing effort before product launch.

Why is Test Marketing Important?

Test marketing allows a company to see what they need to change in a product or marketing strategy. These changes can come in the form of a product feature or an advertisment’s medium, platform, and audience.

Test marketing also helps companies avoid costly marketing blunders by pinpointing the best marketing method for a new product.

For example, statistical data demonstrates that certain apps attract more users than others. There is no way for a company to tell whether an app will meet performance and customer satisfaction metrics.

Test advertising allows the company to test the app in a limited release. Depending on the trial results, the company can make changes to match their target audience’s preferences without risking their brand or product.

Three Types of Test Marketing

There are three types of test marketing. They each have a different objective, method, and purpose. Each also comes with its own set of advantages and limitations. 

1. Standard Test Marketing

Standard test marketing operates similarly to a national marketing campaign, except it deals with a limited audience base. It’s similar to beta testing in that only a select number of consumers can see the ad.

The marketer does everything that he would do in a full-scale marketing campaign. The main benefit of Standard test marketing is it measures the real-world performance of a particular advertisement. Its results are usually accurate.

The main disadvantage of standard market tests is that competitor marketers will learn about your new strategy or product. 

Your competitors gain an opportunity to formulate a countermeasure. Moreover, standard market tests are expensive and time-consuming. It means they are not ideal for small businesses and limited budgets.

2. Controlled Test Marketing

Controlled test marketing is a faster and cheaper alternative to standard test marketing. 

Controlled market tests relate to new product introductions. A controlled test market allows the marketer to deploy the test product in multiple stores. In addition to tracking retail sales of competitive products, suppliers monitor the checkout scanner data to measure initial and repeat purchases. It also shows how the new product performs versus competing products. 

The main advantage of controlled test marketing is that distribution of the new product is guaranteed. However, the marketer cannot measure retailer reactions to the new product. 

It also means that competitors can look at the new product before its official launch. Also, the sample size of a test group may not be representative of average user sentiments.

3. Simulated Test Marketing

Simulated test marketing seeks to provide a better research method than standard market tests. Simulated market tests are not performed in actual market conditions. Instead, they are performed as a lab experiement.

A simulated test market is a staged marketplace where researchers expose subjects to advertising and mixed variables to gauge levels of purchase intent.

Simulated test markets are faster and cheaper than standard market tests. It allows marketers to focus on a particular aspect of their campaign instead of executing the whole marketing plan.

Takeaway

Test marketing is vital to the success of any campaign. Researchers collect different information that can determine a customer’s intent to buy, product improvement, and the product’s level of competitiveness relative to its competitors.

Test marketing is essential before launching a whole campaign because it saves you a lot of time and money. Don’t forget to dip your toes before diving in a pool.