Concept testing and test marketing are two very important concepts when it comes to developing new products for the market.
It’s common to confuse the two ideas – indeed there are indeed several significant similarities between the two. Both concept testing and test marketing play a similar role: ostensibly, to make sure a product is ready to launch and to iron out any issues that might have gone undetected during the design and planning phase.
However, concept testing and test marketing are different processes and are used for different reasons. In this article, we’ll take a look at each, exploring both their similarities and their differences. Let’s start with concept testing.
Concept testing is how we test a product idea before it enters the market. As the name suggests, it involves putting the concept in front of real customers and asking them to evaluate it in multiple areas. This helps us find out how real-life customers will react to the product.
Concept testing has a series of powerful benefits for marketers. It allows you to quickly notice and fix potential errors before the product launches for real, brings fresh insights to your project, and gives you data-driven feedback that you can use to get buy-in from other members of your organization.
There are a number of methods for doing concept testing, spanning quantitative and qualitative methodologies. Each has its own pros and cons and they have different applications.
(More information can be found in our comprehensive guide to concept testing).
Now we know the basics of concept testing, let’s take a look at test marketing and how it’s different.
What is test marketing?
Test marketing plays a similar role to concept testing. Its goal, like concept testing, is to assess how well a product will perform in its market.
However, test marketing has a broader scope. Instead of focusing solely on the concept or product, test marketing aims to evaluate your entire marketing plan. It takes into account advertising, distribution, sales, and many other components of your overall strategy, but it does this without actually fully launching the product and taking on all the associated risks.
In product test marketing, you basically run a mini launch for your product in a selected market and see how it performs. It’s like a crash run of a product launch.
Neither the launch nor the test market is big enough that you would suffer greatly if the product were to fail. The goal is to trial run your entire strategy to get an idea of how it would fare on a bigger scale. This allows you to pinpoint any errors and make any changes in a relatively low-risk way.
What are the advantages and disadvantages of test marketing?
The pros of test marketing
- You get real insights into how the product would perform in a natural marketing environment. There are many things you simply can’t predict or anticipate and the only way to highlight these issues is with a real test in a real-life environment.
- You can gain an idea of how well the product will sell. This allows you to extrapolate predictions to the wider market, build more realistic budgets, gain buy-in from other members of the company, and make any changes needed.
- It helps you determine the most suitable and effective channels for marketing. A small-scale test, as long as it isn’t too small, can give you a solid idea of the marketing channels your target customers respond best to, helping you allocate your resources and effort more wisely when the product launches for real.
- It helps you identify the best distribution channels and build a data-driven distribution strategy for when the product launches.
- Any weaknesses or flaws in your strategy will be exposed without any disastrous consequences. This way, you can make any changes and ensure your entire plan is on firmer footing when you launch for real. Failing during a test is far more preferable to failing on a grand scale.
- You’ll see how customers react to your product, marketing, and other aspects of your brand in real-life scenarios. This gives you real data to work with as opposed to theoretical predictions and second-hand knowledge based on trends.
- You’ll get a heads-up if your product is going to fail. Sometimes, despite best efforts, some products simply aren’t meant to be. If your product fails dramatically in your test (due to lack of interest, for example) it may be a sign to cut your losses and move on, avoiding a catastrophe.
The cons of test marketing
Although test marketing can be useful, there are also some major drawbacks. Anyone planning to carry out test marketing should make sure they are aware of these potential cons before they begin.
- It’s expensive. Doing test marketing right involves a large-scale project which measures multiple factors across your business. This means that if you want reliable results from your test marketing, you need to be prepared to invest a lot of money.
- It’s time-consuming. Again, test marketing is a big project with many different layers. It takes time to set up your test, and you’ll need to run it for a while before you get reliable results. This can delay your product launch, cause frustration among the members of your project team and cost money.
- Test marketing can reveal your game plan to competitors. In a test-marketing project, you are revealing not just your product but also multiple crucial aspects of your marketing strategy in the real world. It’s very easy for competitors to view this and simply copy it with their own product before you even get close to launching.
- The results can be misleading. With test marketing, there is a lot you need to get just right to yield useful results. If your sample size is too small and narrow, you’ll end up with a one-dimensional view of your market which doesn’t reflect reality. The channels you use to market your product and collect data might exclude certain demographics, too.
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Test marketing vs concept testing: which is best for me?
Test marketing and concept testing share many things in common, but they aren’t interchangeable. In this section, we’ll break down the similarities and differences between the two and help you work out which one is best for your situation.
- Both test marketing and concept testing are designed to learn about your product before doing a full launch.
- Both can be effective ways to reduce the risk of failure, gain valuable insights about your product, and make necessary changes before a full launch.
- Both require you to plan carefully in advance and make sure everything is set up right to get the most accurate and reliable results.
Despite their similarities, concept testing and test marketing are two very different processes. Let’s take a look at the things that separate them:
- Concept testing is much easier to carry out. You can complete a solid concept test in a relatively short amount of time, and gain valuable insights from this.
- Concept testing is more affordable. Concept tests can be done for a fraction of the cost of test marketing.
- Test marketing involves launching a product in the market, even if it’s at a small-scale. As a result, it’s not suitable for early stage testing, where concept testing can play an important role.
- Linked to this, concept testing can allow you to test ideas securely before launch. In contrast with test marketing your products are put into the market meaning that there is a risk of competitors getting hold of your ideas.
- Test marketing is wider in scope as it takes a broader view of the entire marketing and sales process. It measures many different factors such as advertising effectiveness which can’t be evaluated in concept testing.
Which one should I use?
Whether you opt for concept testing or test marketing depends on your goals, the resources you have available, your product, where you are in the development process and your timeline, among other factors.
Concept testing is much easier and more cost effective to do than test marketing and can yield reliable results at speed. With concept testing, it’s not hard to get reliable feedback on your product and clear direction to inform actionable changes. This allows you to make meaningful improvements to your product and launch much more confidently.
Give yourself the best chance
Concept testing allows you to launch your product with the best possible chance of success. Instead of operating in the dark, guided only by guesswork and opinions, you can lean on real feedback from real customers.
At Kadence, we can help you with concept testing, ensuring your product goes to market with a strong chance of success. To find out how, request a proposal today or get in touch with your local Kadence team to discuss your options.