Group Members  Senthil Kumar 13  Shivani Mittal 14  Pritam Sawant 24  Amol Naik 26  Parvez Modi 53  Tintu Rajan 70  Shoaib Alim 76  Akash Patil 67

What is a Test Marketing?  Test marketing is a technique used during product development to determine how people respond to a product.  Test market is a geographic region or demographic group used to gauge the viability of a product or service in the mass market prior to a wide scale roll- out.

Death of an idea  10% of ideas reach the test market stage  50% of new products fail in test marketing  50% of those fail on national launch  only 2.5% ever enter the marketplace  1 entrant for every 64 ideas  the average new product that fails costs about $50 million  some product failures have losses of over $100 million for some companies

Purposes of Test Market  To observe consumer behavior  Helps to assess potential problem areas  provides a great deal of information  often used to make profit and sales forecasts

Pros and Cons of Test Marketing Advantages:  Risk Reduction monetary risk channel relationships sales force morale  Strategic Improvement marketing mix production facilities Disadvantages:  Cost  Time (9-12 months+) hurt competitive advantage competitor may monitor test market competitor may go national  Competitor can disrupt test market

While Procter & Gamble was busy test-marketing its soft chocolate chip cookies, both Nabisco and Keebler rolled out similar cookies nationwide. The same thing happened with P&G’s Brigade toilet- bowl cleaner. It was in test marketing for three years, during which time Vanish became established in the market.

Process  Establish Goals  Conduct a Test with Select Customers  Conduct a Regional Launch  Select an Area That Matches Your Target Market  Use Media Resources Wisely

 Conduct Research Before and After Testing  Evaluate Distribution Channels  Evaluate Competitive Response  Use Direct Marketing  Conduct an Online Test

What to Avoid  You Don’t Test the Market  You Choose a Test Area That Doesn’t Reflect Your Market  You Fail to Evaluate Factors Critical to Success

Alternative to test marketing  Single source reserch in super market  Simulated labrotary market testing

Case study  TATA PUSH TO TALK

Simulated test marketing  Created in the 1960s from the Yankelovich, Skelly and White Inc.  According to Joseph Willke President, AC Nielsen BASES (2003) it is an alternative to test marketing, which is slower, more expensive, and less secure.  Create a false buying situation and observe what the customer does.  Follow-up with customer later to assess likely repeat sales.  Often used for consumer nondurables.

Simulated Test Market Procedure  Mall intercept.  Self-administered questionnaire.  Advertising stimuli.  Mini-store shopping experience.  Post-exposure questionnaire.  Receive trial package.  Phone follow up and offer to buy more.

Possible Drawbacks to STMs  Mathematical complexity  False conditions  Possibly faulty assumptions on data, such as number of stores that will make the product available  May not be applicable to totally new-to-the- market products, since no prior data available.  Does not test channel member response to the new product, only the final consumer

Marketing plan of new product

Consumer Insight

Competitive Analysis:

Competitors Analysis

Market Data

Market Share Data Target Market Segmentation: Demographic Segmentation Positioning Personality and life style:

Seven P’s of Marketing Mix pertaining to the new product ProductpricepromotionpeoplePlace Physical evidence Process

Promotion Promotional Budget: Creative strategy: Media strategy: Electronic media: Print: Newspapers, Magazines, Hoardings and Billboards Public relations: Brand Activation: Punch Line:

What is a target market?  Market – The set of all actual and potential buyers of a product or service.  Target Market – A set of buyers sharing common needs or characteristics that the company decide to serves.

How do we determine who to target?  Three key factors to target market selection:  Segment size and growth  Segment structural attractiveness  Businesses objectives and resources

Developing a Target Market Market Segmentation 1) Identify basis for segmenting market. 2) Develop Segment Profile Market Targeting 3) Develop measure of segment attractiveness 4) Select target segments Market Positioning 5) Develop Positioning for target segments 6) Develop a marketing mix for each segment Market Segmenting –dividing a market into smaller groups of buyers with distinct needs, characteristics, behaviors, etc. that might require separate products or marketing mixes.

Characteristics to analyze Demographic Analysis  Age  Gender  Geographic location  Annual Income  Marriage Status  Education level Psychographic Analysis What do they VALUE Price Entertainment Convenience Safety Travel distance Activities

Target Market ( In short)

Product positioning involves tailoring an entire marketing program including product attributes, image, and price, as well as packaging, distribution, and service to best meet the needs of consumers within a particular market segment. General Product Positioning Process: 1) The Target Customer: It is the person at whom the product is aimed. Target customer can be defined by age, sex, location, attitude etc.

2) The Market in which the Product Competes:  The competitiveness in the existing products in the market and the companies vision. 3) Collecting information from a sample of customers about their perceptions of each product on the relevant attributes. 4) Determine each product's current location in the product space.

Positioning Concepts:  Functional positions Solve problems Provide benefits to customers Get favourable perception by investor and lenders  Symbolic positions Self-image enhancement Ego identification Belongingness and social meaningfulness Affective fulfilment

 Experiential positions Provide sensory stimulation Provide cognitive stimulation

Product Strategy ”Product strategy begins with a strategic vision that states where a company wants to go, how it will get there, and why it will be successful.” ”Product strategy is like a roadmap, and like a roadmap it’s useful only when you know where you are and where you want to go.”

What is Product Strategy?

Price is the only revenue generating element. A well chosen price should do three things: Achieve the financial goals of the company Fit the realities of the marketplace Support a product's positioning and be consistent with the other variables in the marketing mix.

PROCESS OF PRICING 1. Develop marketing strategy 2. Make marketing mix decisions 3. Estimate the demand curve 4. Calculate the cost 5. Understand the environmental factors 6. Set pricing objectives 7. Determine pricing

PRICING STRATEGIES  Price lining  Promotional pricing  Premium pricing  Goldilocks pricing  Demand-based pricing  Multidimensional pricing

Advertising  Advertising is a form of communication used to influence individuals to purchase products or services or support political candidates or ideas.  Advertising is communication used to influence individuals to purchase products or services or support political candidates or ideas.

Types of advertising  Television  Infomercials  Radio advertising  Print advertising  Online advertising  Billboard advertising  Etc…

 Product-Oriented Advertising  Image Advertising  Advocacy Advertising  Public Service Advertising

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