Market testing.

You have an idea for a new product or service, and you are excited about it. But how do you know if someone will actually buy it? We talk about how to determine if there is a market for your product before launch.

If you have an idea for a new product, you are probably very excited. It’s nice to think about the reaction it will cause when it hits the market. It is even more pleasant to dream about where to spend the earned millions. Alas, the launch of such projects should be slow and thoughtful.

The meaning of market testing

Any launch is accompanied by a lot of tests. In order not to hit them all at once, catch the mood of customers in time and, perhaps, fix something, it makes sense to launch the product in stages, iterations. Market testing is just about that.

A classic example of such testing is the history of the Zappos online store. At the launch, its founder, Nick Swinmern, had neither an online store, nor a warehouse, nor the goods themselves in stock. And there was only a website on which Nick put up several photos of shoes of different models and indicated contacts. Thus, he was testing a new business model: buying shoes on the Internet. When the orders arrived, Nick just went to another store, bought the right pair and sent it by mail. There was no question of profit, it was just an experiment, testing the idea for viability.

According to the dictionary, market testing (or market analysis) is a way to test several marketing scenarios and choose the most promising one. From an everyday point of view, this is just a way to check whether your product will sell or not — and if so, how well.

Market testing helps to get answers to fundamental questions:

• What is the demand for my product or service?
• Who are the clients? What do they think about my product compared to the products of competitors?
• What can be predicted product sales figures in the market?
• Which channels are more effective to use for sales?
• What is the optimal price?
• Who are my competitors?
• Are there any legal subtleties that need to be taken into account?
• How will I promote the product?

In fact, these are questions about how the market will react to the launch of the product.

And if the product is fundamentally new?

We decided to clarify. Rarely does anyone come up with the idea of a product that didn’t exist before. But suddenly it came to you. What’s to be done here? After all, if there is no market as such, then what kind of analysis can we talk about?

It is necessary to study competitors and analog products, to look for at least something similar. It makes no sense to talk to the consumer about a non-existent product or service. He will never come up with a product for business. But he can say what he likes and dislikes in what he uses now, what his needs are not closed. The consumer can also test prototypes.

Market testing and product testing. What’s the difference?

They are often confused, and it’s easy to see why. But there are a few differences that help to understand the difference.

Product testing = getting feedback from consumers

Beta testing or IHUT (home use test) is conducted on a sample from the target audience. They study the characteristics of the product in the context of consumer reviews.б

Helps:

• Evaluate customer impressions and their intention to buy the product.
• Get a reaction not only to the product itself, but also to its packaging, instructions, individual parts.

Market Testing = Soft product launch

They launch a product on the selected market for a certain period of time, then evaluate its success based on the KPI. Which KPIs to evaluate are decided before testing.

Helps:

• Understand the actual consumer demand and attractiveness of the product — especially in comparison with competitors’ products.
• Increase the success rate of a full-fledged product launch.

The main difference is that market testing does not involve communication with consumers. It determines where, when and for how long the product will be sold on the market. While product testing provides information on how to improve the product itself — and increase customer satisfaction. To create a strong product and successfully bring it to market, you need to use both.

Before launching any new product, as a rule, it is tested in one form or another. Market testing is not always carried out, as it can be expensive and time-consuming. We are figuring out what can be done on our own.

Conclusions

Market testing is a way to check how well a product or service will work. It usually consists of trial studies that should answer the question of how the market will react to the launch of the product.

Market testing is different from product testing. The latter is necessary in order to get feedback from consumers. The first is aimed at forecasting the market potential of the concept.

Different methods are needed for successful market testing. To begin with, you can test the idea on friends, online, create a prototype and conduct a competitive analysis. The bottom line is that market testing is an effective tool for determining the potential of a product among consumers.