Pilot Project Launch- Evaluating the market

Published by MBA Skool Team, Published on September 02, 2011

Companies bring about products and services which give a benefit to the people. It is very important for companies to understand the requirements and the perceptions of people. It is the responsibility of the organization to carefully study the market dynamics, customer requirements, and the actual benefit which they perceive to get from the service or product. Until and unless such things are taken into account and studied by the company, it would be difficult for them to position their product and make certain improvements as per the customer requirements. Thus, one of the most important strategies which companies have on their priority list is a pilot study or a test project launch where they can study the reaction of the people before completely launching their brand in the market.



Whenever companies decide to enter the market, they have to study all the aspects of the market like competition, substitute products, customer requirements. However, all the analysis on paper seems fine and the practical implementation of such projects is the real challenge. Companies thus have to select a sample market from their decided or prospective target group. They need to also select this sample target audience in the territory where they want to launch the product in the future. This pilot study helps companies to analyze the feasibility in terms of marketing, financial viability, branding, areas of improvement, acceptance by the audience etc.

A pilot study is a similar to a full-fledged launch with the only difference being that it is restricted to a smaller number of customers. For FMCG products, companies decide on small territory which has similar demographics and market segment which suits the entire customer base, and they tie-up with retail chains, grocery stores and other outlets and analyze the customer perception. Customer surveys, feedbacks, mystery shopping etc are some ways in which companies can tap the customer reactions and convert this statistical data into information which would be useful for the company to improve. Engineering projects and software applications are often tested with people on a small scale which also help in reducing the overall cost of the project by improving at the initial stage. Pilot studies also help in making corrections and improvements in post-launch evaluations of products, services or even ad campaign evaluations.

Even though pilot studies are beneficial, they do have drawbacks. A pilot study is performed on a sample, and simply extrapolating these results for the entire population does backfire in certain situations. Thus, stereotyping the customer requirement and the reaction of the sample audience can cause problems when the project is launched on a large scale. Another major disadvantage of a pilot launch is that it exposes the company’s product or service to the competitors. Competitors can buy the new product, analyze the new product, make improvements in their own and strategize their own path. In fact, there have been instances where major players have completely bought out the entire new product range from the shelves even before the customers come to know about it. This way, competitors completely destroy a brand or product even before the people come to know about it.

Companies realize that they have just one opportunity to make an impression on the minds of a customer. They need to ensure that their product or service is of the highest quality because once a bad word of mouth spreads, it becomes difficult for brands to revive. Thus, it becomes critical for companies to first understand the market dynamics and this evaluation of the customer needs can be done through an important strategy like pilot project launch.

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