(Note the use of the world "REAL." I
am not a fan of simulated test marketing.)
While the objective is "Assessment in Context," it is assessment of real
world conditions. Care must be taken in conducting the research to
ensure realistic assumptions are made within the marketing plan. I
have been involved in Test Markets where the conditions were not realistic.
We spent more money per household than was ever possible in a national
environment. Also, competitors might do something in a test market
that they would never do or could not afford to do in a national market.
For instance, in one of the last sell-in Test Markets where I was involved,
two weeks before we were to open the market, a major competitor had a "buy
one, get one free" sale of their brand. They literally took a major
portion of the market "off the table" for us for the next four to six months.
I just completed a meeting with Rich to discuss our different points of
view pertaining to "Test Markets." Rich answered my concerns with a
couple of good points. First, while I believe if the manufacturer says,
"this is the funding we plan for the introduction, these are the promotions
we are planning and this is the market penetration we will achieve year one,"
we are obligated to conduct our research and analysis utilizing their commitment.
Rich believes that if the plan put forward is unreasonable, it must
and is challenged so that the plan is executed in the same manner as the
national plan will be executed. Secondly, if a competitor interjects
a bias within the Test Market, the manufacturer will know and take corrective
action. Rich believes this to be low because competition knows they
will receive "retaliation" if they themselves go to Test Market in the future.
I believe Rich and I are very close in our thinking when it comes to the
use of Test Markets. For perspective, I would (almost) never suggest
moving forward to a national roll-out without Test Market Data.
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