Posted in Marketing and Strategy Terms, Total Reads: 500
Definition: Market Test
Market Test is done to check the selling potential of any product or service. It is done at a small scale in a small market. Market test helps in getting the response of the consumers and hence alterations can be done before going at a full scale. It saves company a lot of money and effort.
Any business idea needs to be tested first before launching it at the full scale. Entrepreneurs tend to think that their out of box ideas will succeed in the market and end up losing a large amount of money just because they failed to understand the market or the customers did not think the same way that the entrepreneur thought. Thus it is imperative that thorough market test is done and response of the customers is recorded. Only after optimizing the business model, strategy, marketing, finances etc the company should expand into other markets.
Even a big company does market testing for any new product that it develops. They first launch the product in a particular state or city and do all the marketing activities related to the product in that area only. Advertisements, distribution, customer feedback etc are all done in this area as the company plans to do when it goes to more markets. Then based on the results it decides whether to launch the product or drop it.