Test marketing is a technique used during product development to determine how people respond to a product. It can be used at many different phases of development to see whether or not the public will buy the product, how the product may need to be adjusted to make it appealing to the public, and how members of the public interact with the product. Using information from test marketing, product developers can refine products to make them more commercially viable before embarking on a widespread project launch.
One of the simplest forms of this type of marketing is online test marketing, in which a manufacturer produces a survey to determine whether or not members of the public even want a product. The survey can also provide useful data about how much people would be willing to pay for a product, whether or not people would travel to obtain it, what kind of features they would look for, and so forth. This form of marketing can also be done through mail and phone surveys sent to a targeted area of the population.
Once a product is in development, companies can embark on test marketing which involves bringing actual examples of the public. They expose the product to a selected area of the public to see how they respond. For example, a car manufacturer might bring prototypes to a few major cities viewed as trendsetters to see how people respond and to give people a chance to interact with the car. Or, a manufacturer of potato chips might send out a new flavor to a select group of supermarkets, asking the supermarkets to put it out on the shelf like a regular product and to monitor consumer response.
Companies use test marketing to gather information about public response to their products. This information may be used to totally rework or a product, or to add features. It also informs the ad campaign, ensuring that ads are presented in a way which represents the product, hits the target audience, and makes people interested in purchasing the product. Marketing tests are critical, and companies which fail to perform them can run into trouble when they start a major advertising campaign and product introduction.
Entrepreneurs who are interested in selling something entirely new are often encouraged to engage in test marketing before they give up their day jobs or savings. This allows them to explore the idea of introducing the product to the market. It may turn out that members of the public don't respond, making investment in actual product development unwise.