What is test marketing? What role does it play in new product development? What factors do firms consider when determining whether or not to conduct test marketing?

What will be an ideal response?

Test marketing is the stage at which a product and its proposed marketing program are introduced into realistic market settings. A product reaches this stage only after it passes the concept test and product test stage. Test marketing gives the marketer experience with marketing a product before going to the great expense of full introduction. It lets a company test the product and its entire marketing program — targeting and positioning strategy, advertising, distribution, pricing, branding and packaging, and budget levels. The amount of test marketing needed varies with each new product. Test marketing costs can be high, and testing takes time that may allow market opportunities to slip by or competitors to gain advantages. A company may do little or no test marketing when the costs of developing and introducing a new product are low, or when management is already confident about the new product.