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What Is Test Market Analysis?

Article Details
  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 14 November 2016
  • Copyright Protected:
    2003-2016
    Conjecture Corporation
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A test market analysis is a type of evaluation that utilizes the data collected from a designated test market to determine future efforts to market a product or group of products within that designated demographic. While there is no single strategy used to analyze the results related to a given test market, the general goal is to use the data to enhance the marketing techniques used to promote the products and possibly even make changes to some aspects of the products themselves, if the data indicates that type of action is necessary. A properly created and executed test market analysis can make the difference between the failure of a product in one or more consumer markets, and successfully launching and growing the customer base for that product.

There are several elements that are commonly part of any type of test market analysis. One key aspect has to do with how information about the product is relayed to the test market designated. The idea is to evaluate those mechanisms and make sure they are a good fit for the customer demographic that is involved with the test market. For example, if that market is composed of consumers of all ages and genders residing in city or town, then the focus will often be on how successful the use of local radio and television advertising is in educating consumers on the benefits of the product, versus using print ads or even online advertising on locally owned websites.

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The test market analysis will also address the actual uses of the product in question, and how those uses relate to the needs and wants of the demographic included in the test market. This often goes hand in hand with making sure consumers are informed about the product through the most likely outlets, since identifying the potential uses of the product can be a significant component in the advertising effort. By making sure consumers in the test market understand how to use the product properly, it is easier to determine if those intended uses are of interest to those consumers and likely to motivate them to make a purchase.

Another important aspect of the test market analysis is to determine if consumers can find the product and purchase it with relative ease. Here, the focus is on making sure that the collection of retail stores or online sites where the product is sold are known and regularly visited by the desired demographic. This means that if the product is intended to appeal to a demographic that focuses on low-income households, the analysis will reveal that placing the product in discount retail stores would be a better approach than attempting to sell it in high-end stores.

The exact combination of elements found in a test market analysis will vary, based on the size and characteristics of the test market itself. Small local businesses as well as multinational corporations can engage is this type of analysis as a way of refining a product, its packaging, and even the overall marketing campaign by testing the product in limited markets before engaging in a large-scale product launch. The information gained during the analysis can save a great deal of money later on, and significantly increase the chances of the product reaching the right consumers and ultimately becoming successful.

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