168 CHAPTER9POSITIONINGPRODUCTSTHROUGH THELIFECYCLE
commercials or print ads, including one for the new product, then they are given
money and brought into a store where they can make purchases. The company
notes how many people buy the new brand and competing brands as a test of the
ad’s relative effectiveness against competing ads in simulating trial. Consumers are
also asked why they bought or did not buy; nonbuyers receive a free sample of the
new product and are reinterviewed later to determine product attitudes, usage,
satisfaction, and repurchase intention.^15
➤ Controlled test marketing.A research firm manages a panel of stores that will carry new
products for a fee. The company with the new product specifies the number of
stores and geographic locations it wants to test. The research firm delivers the
product to the participating stores and controls shelf position; number of facings,
displays, and point-of-purchase promotions; and pricing. Sales results can be
measured through electronic scanners at the checkout. The company can also
evaluate the impact of local advertising and promotions during this test.
➤ Test markets.When full-blown, the company chooses a few representative cities, the
sales force tries to sell the trade on carrying the product and giving it good
exposure, and the company unleashes a full advertising and promotion campaign in
these markets. Here, marketers must decide on the number and location of test
cities, length of the test, what to track, and what action to take. Today, many firms
are skipping extended test marketing and relying instead on faster and more
economical market-testing methods, such as smaller test areas and shorter test
periods.Business-Goods Market Testing
Business goods can also benefit from market testing. Expensive industrial goods and
new technologies will normally undergo both alpha and beta testing. In addition, new
business products are sometimes market-tested at trade shows. Trade shows such as the
annual Toy Fair and semiannual Internet World draw a large number of buyers who
view many new products in a few concentrated days. The vendor can observe how
much interest buyers show in the new product, how they react to various features and
terms, and how many express purchase intentions or place orders. The disadvantage
of trade shows is that they reveal the product to competitors; therefore, the vendor
should be ready to launch the product soon after the trade show.Commercialization
If the company goes ahead with commercialization, it will face its largest costs to date.
The company will have to contract for manufacture or build or rent a full-scale manu-
facturing facility. Plant size will be a critical decision. The company may choose to
build a smaller plant than called for by the sales forecast, to be on the safe side.
Quaker Oats did this when it launched its 100 Percent Natural breakfast cereal.
Unfortunately, demand so exceeded the company’s sales forecast that for about a year
it could not supply enough product to the stores. Although Quaker Oats was gratified
with the response, the low forecast cost it a considerable amount of profit.
In addition to promotional decisions, other major decisions during this stage
include:
➤ When (timing).Marketing timing is critical. If a firm learns that a competitor is
nearing the end of its development work, it can choose: first entry(being first to
market, locking up key distributors and customers, and gaining reputational
leadership; however, if the product is not thoroughly debugged, it can acquire a
flawed image); parallel entry(launching at the same time as a rival may gain both