Simulated Test Marketing Gets Your New Products/Services Off on the Right Foot
Simulated test marketing research enables you to experiment and hone in on the best marketing plan. Learn more about this method and its application in this article.
While it's true that some marketers use simulated test marketing technology to test a few alternative plans and pick the winner in terms of projected volume or sales, there’s really no reason to put a cap on the number to try out.
And here's why.
Now more than ever, marketers need plans that enhance new product/service performance as much as possible. Marketers everywhere—even the ones with great products and services ready to go—need to ask themselves: “Do I have the right combination of strategy and tactics that will generate the most return in terms of share, revenue and/or profit from my investment?”
When we asked a leading consumer packaged goods manufacturer recently about the reasons behind the company’s 90%-95% failure rate, the company explained that “a faulty marketing plan and/or the failure to implement the plan” more often than not upended performance.
Beyond its uses as a forecasting tool, simulated test marketing research enables you to experiment with different inputs—from strategic elements such as the target and positioning to tactical elements such as GRPs and budget allocation across different traditional and digital media—and narrow in on the marketing plan most likely to support performance objectives in the real-world.
We’ve never seen a plan a sophisticated simulated test marketing recommended that didn’t beat the ones submitted by marketing management. Sometimes the margin is modest; sometimes the difference is overwhelming.
Simulated test marketing's applications go beyond pre-launch planning and forecasting. Marketers can also use one cleverly done to improve the marketing plan post-launch. Marketers can see the current trajectory of a new product/service or program based on as little as 30 days of actual, real-world results. If they see a big difference between the pre-launch and post-launch forecasts of awareness, sales, and profits, they have the time—and the simulated test marketing technology—to do some reformulating of the plan and get innovation ROI on track.
Though more and more marketers regularly use technology to test different and numerous configurations of new products and services, we’re hard pressed to find too many that use it to formulate the marketing plan. Turning to technology tools such as simulated test marketing will go a long way to improving the performance of innovation efforts.