Testing is an important stage in the process of a new product development. Before starting scale, it is imperative to conduct testing. As a of matter of fact, it is at the stage of testing that one could testify the accuracy of marketing information on the basis of which various stages were completed. These commercial experiments are necessary to verify earlier business judgments.
Thus the object of this stage is basically to assess whether the product meets the technical and commercial objectives envisaged in the original proposal. There are various tests conducted at various levels in order to ascertain the product acceptability.
There are three types of tests usually conducted (1) Concept Testing. (2) Product Testing, and (3) Test Marketing.
A. Concept Testing. This is concerned with measuring customer reactions to the idea or concept of a product. In fact, it is a kind of research in which the product idea is screened before any money, time or labor are committed to making the prototype products. The idea of a product with as many details as possible is made known to the customers either verbally or through the use of suitable blueprints. The response of the customers is checked and only if it is found encouraging that the development of the product prototype is taken up.
For instance, when the rest of the world had largely gone in for a synthetic detergent in the powder form, it was decided by the Unilever Limited to test a detergent bar as a concept, because in India most people do not use washing machines or even buckets and are accustomed to using a bar to rut on the fabric.
The concept testing can tell whether the product is likely to be a future success or not. To achieve better results, however, the product concept should include the finished product itself, with all details viz., packaging, price category, the brand name, etc. On the basis of these details interviews are conducted to collect the opinion of the would-be purchasers.
The major advantage of concept testing is that the management could form early judgments on the likelihood of the market success of the new ideas.
The other objectives of concept testing could be :
(i) To evaluate the relative merits of several new product proposals,
(ii) To determine, whether the product idea is to be abandoned or modified,
(iii) To determine the size of the potential market,
(iv) To guide the management to adopt suitable marketing policies in advance.
However, concept testing has the following limitations also:
(i) It entails some is of disclosing the company plans to competitors.
(ii) There is a time-lag for obtaining and assessing the results.
(iii) Respondents may overstate their interest and encourage unsound development.
(iv) The validity of any measure of potential market size obtained through early stage concept testing is often dubious.
(v) Findings may be misleading if the test is not carried out properly.
B. Product Testing.
Once the concept test of the product is successful, the next step is to put the real product into a few selected markets. This test will prove whether the product performs as expected or whether it lives up to the promise of the concept. Such a test enables the management to pick out the likes and dislikes of the consumers towards the product. It also gives an opportunity to the buyers to compare the product with the competitive products.
Product testing helps:
(i) To assess proper product performance.
(ii) To minimize the risks attached to full scale launching of a new product.
(iii) To identify the most productive market segments,
(iv) To collect necessary data of responsiveness from the customers.
However, this test is not a foolproof system for predicting the future. It cannot help to forecast the market size, sales volume, brand shares repeat buying, etc. Correct pricing can also not be assessed.
C. Test Marketing.
Even the most favorable results from the two tests mentioned above are not a conclusive evidence for the success of a new product. For instance, even where the product is seen to possess a high quality market failure is still a possibility if other important factors in the marketing mix show weakness.
It is, therefore, logical to examine how the company’s total marketing mix may be tested using test marketing methods. Experience shows that the chances of a new product being successful are ‘significantly greater’ if it is first put into a controlled test market where it is exposed to realistic competitive conditions.
The objectives of test marketing are
(i) To evaluate a complete marketing plan including advertising, distribution, sales, pricing, etc.
(ii) To determine media mix, sales channels, etc.
(iii) To forecast sales volume.
Though definite advantages are pointed out in favor of test marketing, some limitations are also experienced
(i) Competitors’ response and their defensive action may not allow test marketing to be conclusive.
(ii) Test marketing is a costly affair.
(iii) it is a time-consuming method. Many firms avoid test marketing, since they wish to be the first in the market.
Still, most firms do resort to test marketing. For example, Liril Soap, introduced, by the Hindustan Lever Limited was originally tested in two towns (Hyderabad and Lucknow). These towns were selected because of their different characteristics which make thew representative of a large spectrum of towns in India.
The product was distributed in all normal outlets in the whole town and supported by advertising to inform the consumers. The results of the test enabled the company to make several improvements which were successfully incorporated before the product was nationally extended.
To make test marketing more fruitful a ‘post-launching’ survey should be conducted. This survey will reveal whether the earlier satisfaction continues to be derived, whether people like the product and make re-purchased, whether the advertising is appealing, etc.
On the basis of the findings, changes will have to be incorporated before, the product is finally launched in the market.