Test Marketing in New Product Development

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Supermarket image

The idea of the management dropping the short questionnaire into each of the customer’s grocery bag will depend on the willingness of the consumers to cooperate in information delivery, this can be over exaggerated or invalid and thus however much this can be useful for them, it can as well turn out to be irrelevant (Westkamper, 2000).

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First, if customers are honest and in the long run they decide to offer the true image of the firm, this information can be crucial in defining market opportunities within their jurisdiction and help monitor their performance. The aftermath will be advantageous and help redefine their take in the market share because this will help evaluate their service delivery.

Secondly, this process will not only be crucial in helping the firm identifies how changing tidbits revolves around to bring changes in the market mix. In most cases changes in the consumer behaviors is determined by the shifts within the market mix. The management can identify their weaknesses and reignite their services from these lessons. In most instances these might help the firm rise above their competitors (Lamb, Hair, & McDaniel, 2011).

A clear understanding of the customer’s preferences will help identify their behaviors. Such crucial information is essential in laying down strategies and approaches of helping the firm find out on ways of ensuring their meet the desires of their clients. This kind of method employed in data collection may backfire and prove irrelevant especially if the consumers contacted for the process are not willing to offer the exact information as [perceived by most consumers. The management should therefore develop a mechanism of knowing which data to use and which should be discarded. It is logic that not all information given will be used for laying down strategies of meeting customer demands.

Alternatively, the management may decide to use yet another method of helping them identify their image in the market without a compromise of the information expected. This will involve a method called copy testing or a pretesting. This helps in predicting the market performance as well as the level of attention the consumers pay to the products from a certain company as opposed to their competitors (Westkamper, 2000). This is particularly important in this approach because it helps in restricting the possibilities of the competitors form diverting the facts from what the management desires. This will help the firm redefine their strategies and priorities in their service delivery, rethink about their products share in the market with an effort of improving their overall performance.

The firm may also decide to carry out both qualitative and quantitative studies. This usage of more than one design of research is worth in any serious business oriented firm because they will have two sets of data to carry out a comparison from. The first instance will involve acquisition of data to determine the background information of the firm after which the second analysis will focus on exploration of real issues at hand. All these will be geared towards helping the firm redefine its strategies and forge a head.

Identification of trade area

This approach of identifying the firm’s coverage in the market may have both positive and negative effects. What is important is for the management to be in a position of determining which data is important for them to enable their core desires is met.

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Firstly, the method is cheap because the clients who are lied upon to provide the information are customers and therefore, the possibility of them providing more reliable information is high. This information will be paramount in helping those in dire needs of it identify their main interest. Another advantage of this approach is that it offers an immediate response from the customer, this is crucial because the person collecting that information can actually look at their facial expression and they present their argument when responding to questions from the people collecting the data. This has an advantage from other forms of surveys in that identification of their desires is impromptu and can thus be identified on the spot and met thereafter.

The disadvantages of this method are that it does not portray the actual image of the firm from the perspective of the consumers, the information gotten is purely a matter of willingness of these volunteers in providing their views which may not represent the exact image, the information gotten is just a section of customers which may not represent the entire views of the customers.

A new movie scenario

This method of calling a toll number to respond to viability of the movie is likely to have a massive response if the customers have a great interest in viewing it again. The likelihood of garnering a positive response is possible if there is a desire in showing it again. The method is cheap because it will not cost the management or those advertising it any investment for it to come back in the market. However, the possibility of not receiving a call from the customers is possible even though this may not portray the exact image of their views.

The people involved in advertising this movie should devise a method of ensuring those who call are rewarded to maximize the response from the movie goers. If this is not designed effectively, chances of not betting responses are likely. It is thus true to assert that massive response will only happen when there is a desire in viewing the movie again. The best possible way of ensuring that the response is gotten will be possible if the management comes up with a reward system for those who make call to vote for it or not.

Planned Obsolescence

When a producer produces products that have shorter life cycle, they need to ensure their customers are not aware of this trend or else they may turn on the products sold by their competitors. However, if this is concealed, their chances of making more purchase is possible, this will ensure they gain continuous use of the new products. Continuity will only be possible if these consumers don’t identify the key role played by the manufacturers.

For the firm to generate long term scale of selling their products they need to produce product that do not last in the market. This will stimulate their sales and the demand of their products in the market. Consumers will be black mailed into continuous buying of these products given their short duration in the market and their desire to use the products.

This mode of manufacturing ensures that the interval between repeated purchases is reduced. This ensures a shortening of replacement time. The major beneficiaries are the manufacturers because they end up making bountiful sales within a short period for the same type of goods to the same consumers over a long period.

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This method may also prove vital in encouraging innovation because the manufacturers must devise new product that may ensure they have a continual sale of products in the same line. This method may backfire especially if a consumer realizes the motives of the producers. This may set in resistance from the group. This realization by the consumers may also turn everything around for these manufacturers by tarnishing their public image and customer relationship. In most instances, it may however, be true that this direction of the purchasers may turn out to be essential for customers who need such types of products.

Some of these products, with short life cycle have been witnessed in the computer and software markets, and cosmetics. Most of the computers that were manufactured prior to the latest models have features that cannot enable them to communicate with the ones manufactured of late. This is contrary to the fact that the latter can accept major software that is currently in the market as well as those in the previous mode. This is not true with the previous models. This is also true with the software. A majority of them can only be used with specific models; this is like an evolution of goods from one form to another. This affects the consumers at most because they have to keep abreast with latest versions by buying the new version of the products in the market.

This mode of business does exploits the customers to a great extend because they have no option but rather buy the products if they have a desire of enjoying these vital products. As long as they are not aware of the intention of these manufacturers they will be fooled forever. This is advantageous to producers because they make a lot of repeated sales from the same kind of products over a longer period. The purchasers will be on the receiving end for this motive. They would be fooled from making continuous purchase of the same kind of goods that only last over a shorter period. The results will be loss of resources and funds for the customers because they will be compelled to buy such goods (Fitzpatrick, 2009).

Test marketing

There are three major disadvantages of test marketing, these are; trade secrets, invalid conclusion and cost consideration amongst many others that are not paramount yet have contributing effect.

Trade secrets, this is very lethal for the growth of the firm because the important information is made available to their potential competitor. These competitors will have an opportunity of counteracting to these new products and their specific features that may seem important for gaining market preferences. It is also true that these competitors may also came up with an appropriate method of ensuring their product gains an upper hand from this research and development survey. They may as well take up the advantage if their products posses a broader life cycle development. This method is however important if the survey is carried out over a small scale as opposed in large scale, the latte will present major weaknesses and secrets and thus give the competing firm an upper hand over those carrying out survey. To ensure that the firm conceals the important secrets of it’s good from their competitors they need to carry out this testing over a small scale.

Invalid conclusion comes in for this type of survey because the management will be relying of the take of those given a chance to taste their produce. They will therefore, have to make some conclusions, which may not represent the actual effect of their services and goods in the long run. These conclusions and assumption will be based on the likelihood of prospective and potential buyers buying the products, the management will develop, and assumption that the positive response will represents a proportion of those likely to buy their products. They will have to assume that the demographic area represented will represent a good coverage for their products to gain market share. The information gotten from the people who tested the products will be assumed honest and justifiable. The most important assumption from his mode is that the competitors’ capabilities of swaying the results will be null. Even though this last assumption may be overlooked, it may prove to be vital because the results gotten at the end of the survey may prove futile because of the competitor’s effect on the eventual aftermath. These conclusions and assumptions can be effective if the survey was done over a small scale, the likelihood of obtaining authentic assumption is high when the testing is restricted over a smaller demographic area (Klompmaker, Hughes, & Haley, 1976).

Thirdly, the most important disadvantage is the cost factor. The method is expensive because there is no return from the good sampled out to potential consumers. They are not meant to buy these goods and thus the firm is likely to experience financial constrains. The results gotten may also be less accurate considering this will only attempt at looking at immediate response from consumers who may not have an opportunity of using these goods from another time. It is true that one cannot give an accurate response to the viability of a produce for the first time, but rather a repeated use will enable a consumer to have a thorough analysis of the produce in totality (Day, 1981). For the firm to obtain an effective assessment of their goods yet to be introduced in the market they need to offer incentives to those involved in the study. This will motivate them to have interest in taking part as well as providing accurate information concerning the product they are required to assess.

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Kodak

Services offered by Kodak are customized to suit their client needs and desires. This is why they have wide market target, which in turn is attributed to increase in variety without increase in costs. Customization enables it to realize massive production of goods and corresponding services (South-Western Cengage, 2008).

Realization of its goal is effected by the sound service mix laid in place for execution. These revolve around the seven P’s. They ensure their products are of quality as demanded by their consumers, their prices complements for other elements as well as reflecting the value of their products, apart from promoting their goods on a large scale they also have both selective and franchising distribution (South-Western Cengage, 2008).

Pricing strategy for Kodak’s services

services Pricing strategies Effectiveness of the strategy
Learning tools like Print textbooks, pens etc. Product line pricing This is applied because there exist a range of products with different pricing.
e-Books Price skimming This used because they have substantial advantage over their competitors.
Single e-Chapters Product bundle pricing Where a combination of different chapters on order can be sold as a package to potential clients

References

Day, G. (1981). The Product Life Cycle; Analysis and Applications Issues. Journal of Marketing, 45, 60-67.

Fitzpatrick, K. (2009). Planned Obsolescence: Publishing, Technology, and the Future of the Academy. New York: New York University.

Klompmaker, J., Hughes, D., & Haley, R. (1976). Test Marketing in New Product Development. Harvard Business Review, 54, 128-38.

Lamb, C.W., Hair, J.F., & McDaniel, C. (2011). Marketing: 2011 custom edition (4th ed.). Mason, OH: South-Western Cengage Learning.

South-Western Cengage. (2008). Kodak – Services and Nonprofit Organization Marketing. Web.

Westkamper, E. (2000). Live Cycle Management and Assessment; Approaches and Visions towards Sustainable Manufacturing. Annals of the CIRP, 49(2), 501-522.

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