Simulated Test Market

Posted in Marketing and Strategy Terms, Total Reads: 599

Definition: Simulated Test Market

Simulated test marketing is a form of market testing where customers are exposed to a simulated market situation to gauge the consumer’s reactions to a product, service or marketing mix variations. It is used to forecast demand and do market analysis.

The average accuracy claimed for developed markets has reached ±9%.


Simulated test marketing's usages go well beyond pre-launch planning and forecasting demand. Marketers can also use this approach to improve the marketing plan post-launch. Marketers can observe the current trajectory of a new product or service based on the data for a month across the world. If they observe a big difference between the product forecasts before the launch and post-launch forecasts of awareness, sales, and profits, they still have the time to change the strategy and the marketing plan. This will also help in maintaining the return on investment.

Although the number of marketers regularly using this technology to test different and numerous versions of new products and services are increasing, we are hard pressed to find so many that use it to formulate the marketing plan.


1. A month on month forecast of relevant performance measures like purchase and share can be obtained through this tool.

2. This method provides an opportunity to work with different marketing plans and evaluate every measure in terms of its effects on sales, profits, or both.

3. The ability to experiment with different measures from traditional and digital medium is very useful for budget allocation.


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