Testing

Prior to full-scale product launches, many companies put new products and their supporting marketing programs through validating tests.

For example, packaged goods companies, such as P&G, traditionally test market new products in isolated geographic areas that are considered broadly representative (i.e. have characteristics common with other markets).  In concept, the test markets provide a "shake out" of the actual product, allow experimentation with alternative marketing programs (e.g. different prices or different levels of advertising support), and provide results that may be projected to other markets.

But, test marketing per se has become less common for three fundamental reasons:

(a) front-end market research and design methodologies have tightened the link with customers, making market responses somewhat more predictable

(b) competitors' market surveillance has become more sophisticated, alerting them to test market activity and allowing them to influence (i.e. contaminate) test market results

(c) competitors benefit from a "heads up" that may signal the need to launch a fast-follow product of their own.

Nonetheless, for high technology products, it is common to beta test radically new products.  The beta tests put near-complete products (such as software) in the hands of impact users to surface any remaining bugs and establish a reference base for the product.