Standard Market Tests
A standard market test is one in which a small sample of market areas usually cities is selected and the product is sold through regular distribution channels, using one or more combinations of product, price and promotional levels. Standard market tests are also used for price, package and advertising testing. Selecting the market areas for a standard test marketing program is clearly an important decisions. Random sampling is seldom used. Purposive selections are made. The firm needs to be aware of its "strength" in the test market areas relative to its strength nationally. Test are selection is a particularly acute issue when more than one version of the product is to be tested. Site selection is also uniquely difficult for multinational firms.
Firms with a new multinational product can test the product simultaneously in several key markets. The product and or the marketing mix may be standardised or altered for each major market. Brand sales are monitored through store audits, or most commonly, UPC Scanner data. Trial and repeat purchase rates, household penetration, substitution patterns, and use demographics are measured through existing or especially established household mail or scanner panels. Survey research can be also be used for these purposes.
The length of time that a test market is conducted depends on the repurchase cycle for the product, the probability of a competitive response, the initial consumer response, and company philosophy. Standard test marketing takes a long time. Not only do most tests run for one year to one and half year, but the sales force must also spend two to three months selling the product through the distribution channel before the consumer test can begin. Only two or three versions of the overall marketing mix are tested. The fact that the test versions do not prove successful may not leave a clear cut basis for eliminating other versions of the total product offering. Most organizations approach this problem by extensive consumer testing prior to test marketing.
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