Pros And Cons Of Test Marketing

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Test marketing is a process that allows a firm to test their marketing strategy and the products in a realistic market setting, before nationally launching the product. There are many pros and con’s of test marketing a product before manufacturing, promoting, and distributing it on a national scale. Firms may decide to use the test marketing process to gauge the viability of a product before investing millions in mass production. This process can provide useful information that can be applied for a more successful launch. There are several advantages and disadvantages that can come with this test marketing process, though.

Many advantages can be gained from test marketing the urban areas that have large commuting populations. One advantage
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Test marketing can be time-consuming and fail in providing useful information. One disadvantage that comes with test marketing is letting market opportunities pass by and competitors gaining an advantage. Test marketing a product makes it available to your competition. A competing company can react in different ways by researching the product development process or pricing. Additionally, If the company also has a faster production process, they can provide the product faster and the firm that is test marketing loses its potential customers while the competing company gains an advantage. Also, only test marketing the product in the urban areas, the company might be missing out on other potential markets that have a demand for the product. If the test marketing is limited to urban areas only, the firm will have no understanding or insight in other areas such as suburban, or rural. By limiting the region to urban areas only, the company will only gain insight for consumers in that area. It will not be able to market the product to other areas because of this limitation. Furthermore, another disadvantage that comes with test marketing to a small sample is the invalid conclusions that are derived from it. It’s not practical to determine whether a population will buy the products based on one type of region and two samples. In order to have a proper understanding of the market, consumers from every region need to be sampled. Additionally, the firm would have to find people that fit the target demographic and are likely to purchase similar
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