Chapter 16 Flashcards
(40 cards)
Q Why shouldn’t you wait too long to run a market test?
A Waiting raises costs, delays launch, and gives competitors more time to react.
Q What does “tests must have teeth” mean?
A Managers must be willing to act—modify or kill the launch—based on test results.
Q Define simulated test market (STM).
A A lab or online simulation that measures trial & repeat intentions to forecast sales.
Q Name three big factors considered before market testing.
A (1) Special launch twists, (2) information needed, (3) costs (test, launch, lost revenue).
Q List the three broad classes of market testing.
A Pseudo-sale, controlled sale, full sale.
Q What is a pseudo-sale?
A Potential users show intent to buy but don’t actually spend money.
Q Define speculative sale.
A Salespeople present the product as if ready to ship and ask, “Would you buy?”
Q Explain informal selling.
A Sales rep visits customers, asks them to place real orders, then records feedback.
Q Two key outputs of an STM.
A Estimated trial rate and repeat rate.
Q Controlled sale—core idea?
A Buyer must actually purchase under controlled conditions.
Q What is direct marketing in testing context?
A Manufacturer sells directly via catalog/online to gauge real orders and response rates.
Q Define minimarket.
A A handful of retail stores act as “mini-cities” for a limited in-store test.
Q Difference between scanner market testing and a regular minimarket.
A Scanner testing uses electronic POS data for precise, real-time sales tracking.
Q What is test marketing?
A A dress-rehearsal sale in a representative geographic area.
Q Define rollout.
A Geographic or segment-by-segment launch, learning and expanding step-by-step.
Q What does CDSM stand for?
A Controlled-Distribution Scanner Market—scanner-equipped stores with restricted distribution.
Q One big pro and one big con of test marketing.
A Pro: rich real-world data; Con: expensive and time-consuming.
Q Key benefit of a rollout versus a one-shot national launch.
A You learn and tweak between waves, limiting risk.
A You learn and tweak between waves, limiting risk.
A Balances learning benefits against cost and competitive delay.
Q What makes every “fact” before market test only an “opinion”?
A Because it hasn’t been validated by real customer behavior.
Prelaunch
Phase of building capability & deciding on pre-announcement.
Early growth phase
Sales begin climbing; learning shifts to scaling.
Beachhead spending
Heavy funds to overcome sales inertia right after launch.
Direct network externality
Product value rises with more users adopting.
