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What Is Test Marketing? - Definition, Types & Examples

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  • 0:01 Test Marketing
  • 0:25 Beta-Testing
  • 1:00 Regional Launch
  • 1:40 Direct Marketing
  • 2:40 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
Companies often use test marketing before a new product or new advertising campaign is completely rolled out. In this lesson, you'll learn what test marketing is as well as the different types utilized.

Test Marketing

Test marketing is a tool used by companies to provide insight into the probable market success of a new product or effectiveness of a marketing campaign. Test marketing can be used by a business to evaluate factors such as the performance of the product, customer satisfaction or acceptance of the product, the required level of material support for the full launch, and distribution requirements for a full launch.

Beta-Testing

There are three common types of test marketing. Sometimes a business will send a new product to a select group of customers before it's released into the full marketplace. In return, the customers will help identify any problems in the product and provide feedback on the product's performance. Any necessary changes based upon the feedback can then be incorporated into the product before its launch. This is known as beta-testing. Beta-testing is very common in the software industry, where software ranging from word processor upgrades to new console games is sent to beta testers for review.

Regional Launch

Another approach to test marketing is to limit the release of a product or marketing campaign to a specific geographic region or regions for testing. This is called a regional launch. A small regional launch saves money and lets a business determine the impact of different factors affecting the launch, such as advertising, sales training and incentives, use of specific retailers, and lines of distribution. In undertaking a regional launch, you should try to find a region that matches your full target market as much as possible. An example of a regional launch may be a new sandwich being tested by a food company in Los Angeles, Chicago, and New York.

Direct Marketing

The final marketing approach, known as direct marketing, minimizes the information that your competitors can find out about the campaign, such as its size and scope. Direct marketing allows you to test a bunch of different variables, including the type of offer, different creative approaches, different target audiences, the method of response, and the frequency and timing of the marketing activities.

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