1. Unit 1 Product Trial AS Edexcel Business

2. Learning objectives To be able to discuss the process of test marking a product to assess likely demand levels To be able to consider how a business might turn a product trial into a repeat purchase To be able to answer past paper questions on the topics.

3. Starter Which of these businesses might benefit from a product trial: A new bakery A new car garage A new chocolate bar A new cleaning service

4. Tesco product trials To avoid expensive mistakes Tesco have a panel of home testers – you can join the panel of testers! https://tescohomepanels.com/Site1/login.aspx

5. Product trial definition The process of testing a market by selling the product or service to a small target area first to gauge demand. For example with new food items often Guernsey is used as a product trial area as it is a very small version of the same demographic and socio economic / ethic mx as the UK. A Multinational may launch a new product in just one country before launching Europe-wide. This can prevent costly mistakes.

6. Test marketing A business may invent or buy in a new product. Everyone in the business agrees this is a good product. How do they actually know if it will sell? Discussion: a business is staffed with people who are aged 18-50. They sell a range of disability living aids for the elderly. Are those in the business able to determine what will sell? Yes or no? Press esc for answer

7. Advantages of Product trials Product trails provide a wealth of data for the business. This may include possible sales data. This is important so the business knows how many products to produce or buy in. It may also determine certain budgets for marketing and sales Other data that may be gained is any potential improvements that could be made on the product – the shape of a handle or colour of a chocolate wrapper for example.

8. Disadvantages of product trials This is a very expensive method of launching a new product. A new business may not have the finances to trial products – it may need to start selling immediately in order to meet its fixed costs. It delays the final launch and may only conclude data that had been predicted

9. Product trial to repeat purchase The main goal of any product trial is to sell a product or service to a customer and then using the marketing mix to persuade the customer to keep buying the product. Product trials can iron out any problems or reasons why a customer may not buy again in the future. Improvements can be made and hopefully a perfect product for the target market will hit the shelves. Once loyalty is established then prices can rise and profit maximisation can occur. What products are you loyal to? Macdonalds, Addidas, Manchester United?

10. Sample question 1 Before Sunny Delight mass produced its soft drinks, it underwent product trials in Carlisle, a town in the north of England. Which one of the following might be regarded as the most likely reason for a business like Sunny Delight to undertake product trials? A An increase in interest rates B To segment the market C To assess the possible demand for a product D To reduce liability [4]

11. Answer question 1 Correct answer is option C - Definition of product trial (1) - Explains that trials are essentially carried out to avoid expensive mistakes (1) - A trial should give information on likely demand in the wider market (1), who may have the same tastes and preferences as the trial consumers (1) - Interest rates would not directly cause a product trial to take place though they may affect the financing of it (1) Any acceptable answer which shows selective knowledge/application and/or development NB up to 2 marks out of 3 may be gained for part (b) if part (a) is incorrect. Maximum 2 marks for explaining why distracters are incorrect.

12. Sample question 2 Levi Roots carried out product trials at the Notting Hill Carnival before producing significant quantities of Reggae Reggae Sauce. Briefly explain two reasons why Levi Roots conducted product trials. [6]

14. Answer question 2 Knowledge/understanding 2, Application 2, Analysis 2 Knowledge/understanding: up to 2 marks are available for defining product trial or test marketing Application: up to 2 marks are available for relating the above to Reggae Reggae Sauce, e.g. providing free samples of the sauce to passers by Analysis: up to 2 marks are available for consideration of causes, consequences or costs such as the likely effects on costs, sales, revenue, ability to set or meet sales targets, effects on company’s image or reputation, etc. Two reasons needed for full marks (3+3 marks)