14520940 Ch12 Test Marketing

8/6/2019 14520940 Ch12 Test Marketing

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Exploring

Marketing Research

William G. Zikmund

Chapter 12:

Test Marketing


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Controlled experimentationControlled experimentation

Not just tryingNot just trying

somethingsomething

outout

But scientificBut scientific

testingtesting

Test Marketing


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Test Marketing

An experimental procedure that provides an

opportunity to test a new product or a new

marketing plan under realistic market

conditions to measure sales or profit

potential.


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ESTIMATEESTIMATE

OUTCOMESOUTCOMES

IDENTIFY ANDIDENTIFY ANDCORRECTCORRECT

WEAKNESSESWEAKNESSES

IN PLANSIN PLANS

Functons of

Test Marketing


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A Lengthy and Costly Procedure

$$$$$$$$$$

Loss ofLoss of

SecrecySecrecy

When notWhen notto Test?to Test?

How LongHow Long

Should aShould a

Test Last?Test Last?


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Popular Test Markets

Pittsfield,

Massachusetts

Charlotte, NorthCarolina

Columbus, Ohio

Little Rock, Arkansas Evansville, Indiana

Cedar Rapids, Iowa

Eau Claire,Wisconsin

Wichita, Kansas

Tulsa, Oklahoma Omaha, Nebraska

Grand Junction.

Colorado

Wichita Falls, Texas

Odessa-Midland, Texas


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Selecting a Test Market

Population size

Demographic composition

Lifestyle considerations

Competitive situation

Media Self-contained trading area

Overused markets - secrecy


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Control Method of Test

Marketing Small city

Low chance of being detected

Distribution is forced (guaranteed)


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The Advantages of Using the

Control Method of Test Marketing Reduced costs

Shorter time period needed for reading test

market results

Increased secrecy from competitors

No distraction of company salespeople from

regular product lines


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Some Problems Estimating Sales

Volume Over-attention

Unrealistic store conditions

Reading competitive environment

incorrectly

Incorrect volume forecasts Adjusted data

Penetration and repeat purchase rate

Time lapse


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High Tech Test Markets

ElectricElectric

TestTestMarketsMarkets

SimulatedSimulated

TestTest

MarketsMarkets Virtual-realityVirtual-realitySimulatedSimulated

Test MarketsTest Markets


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Advanced Experimental Designs are

More Complex

Completely randomized

Randomized block design

Latin square

Factorial


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Completely Randomized Design

An experimental design that uses a random

process to assign subjects (test units) and

treatments to investigate the effects of onlyone independent variable.


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Completely Randomized Designs

Average minutesshopper spendsin store

Control:no music

Experimentaltreatment:slow music

Experimentaltreatment:fast music

16 18 12


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Independent Variable A

Group A Group B Group C

Level 1 Level 2 Level 3


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Completely Randomized DesignWith a pretest posttest

Group A R O1 X1 O2

Group A R O3 X2 O4

Group A R O5 X3 O6


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With a posttest

Group A R X1 O1

Group B R X2 O2

Group C R X3 O3

Completely Randomized Design


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Randomized Block Design

An extension of the completely randomized

design in which a single extraneous variablethat might affect test units response to the

treatment has been identified and the effects

of this variable are isolated by blocking outits effects.


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Independent Variables

Control:no music

Experimentaltreatment

slow music

Experimentaltreatment:fast music

Mornings andafternoons

Evening hours

Block

ingvariable

Randomized Block Design


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Factorial Design

An experiment that investigates the

interaction of two or more variables on asingle dependent variable.


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Independent Variable 1

No Music

cart signs

Slow Music Fast MusicNo Music

Grocerycart signs

Inde

pe

ndent

Variable2


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Price Red Gold

$25 Cell 1 Cell 4$30 Cell 2 Cell 5

$35 Cell 3 Cell 6

Package Design

Factorial Design -- Roller Skates


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Effects

Main effect

The influence of a

single independentvariable on a

dependent variable.

Interaction effect

The influence on a

dependent variable bycombinations of two

or more independent

variables.


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Men

Women

Ad A Ad B

65

65

70 60

Main Effectsof Gender

Main Effects of Ad

>

>

2 x 2 Factorial Design


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100

90

80

70

60

50

40

30

20

10

Ad A Ad B

Women

Men

Be

lieva

bil

ity

Interaction Between Gender and

Advertising Copy


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Level 1 Level 2

Level 1

Level 2

Group A

Group DGroup C

Group B

INDE

PEND

ENT

VARIABLE

2

Independent Variable 1Independent Variable 1


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Group A R O1 X11 O2

Group B R O3 X21 O4

Group C R O5 X12 O6

Group D R O7 X22 O8

2 x 2 Factorial with a Pretest

Posttest


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Group A R X11 O1

Group B R X21 O2

Group C R X12 O3

Group D R X22 O4

2 x 2 Factorial Design with a

Posttest Measure


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A Test Market Experiment

on Pricing

Sales in Units (thousands)

Regular Price$.99

1301188784

X1=104.75

X=119.58

Reduced Price$.89

145143120131

X2=134.75

Cents-Off CouponRegular Price

1531299699

X1=119.25

Test Market A, B, or CTest Market D, E, or FTest Market G, H, or ITest Market J, K, or L

MeanGrand Mean


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Latin Square Design

A balanced, two-way classification scheme

that attempts to control or block out the

effect of two or more extraneous factors byrestricting randomization with respect to the

row and column effects.


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1 2 3

1 A B C2 B C A3 C A B

Order of Usage

SU

BJ

ECT

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14520940 Ch12 Test Marketing