Deck 16: Market Testing

Question 1

In the new products process, market testing should typically be carried out:

A) in the concept stage as the idea needs to be tested for practicality.
B) before the project evaluation stage begins.
C) as soon as techniques that will tell us what we need to know are found.
D) once the ideation phase begins.

Answer 1

C

Question 2

The longer we wait to test a product, the lesser we will know about the product and its marketing program.

Answer 2

False

Question 3

The speculative sale method for market testing involves using each retail store as a mini-city or mini-market to speculate revenue and sales.

Answer 3

False

Question 4

Which of the following causes for new product failure does concept testing cover?

A) If there is a lack of need for the product
B) If the product does not meet the consumer needs
C) If the product is marketed poorly
D) If existing infrastructure cannot be used to produce the product

Question 5

Full sale market testing methods fail to test the realities of new products' national introduction.

Question 6

In informal selling methods people are asked if they would buy a new product, but in speculative sale method people are asked to buy the product.

Question 7

Market testing and test marketing are synonymous.

Question 8

The simulated test market (STM) method for market testing can be effectively used for products that are sold predominantly by personal selling or point-of-purchase promotion.

Question 9

The advantages of using direct marketing as a market testing method include secrecy, quick feedback, low cost, and database support.

Question 10

The speculative sale method is best used for conducting market testing for consumer packaged goods.

Question 11

Market testing for a new product should begin as soon as a technique can be found that will tell us what we need to know.

Question 12

May Safe Solutions (MSS) Inc. is on the verge of launching a new security alarm systems for homes. Before the commercialization of the product, the marketing team of the company contacts a few customers, describes the product to them, answers queries on its functioning, negotiates price, and then asks the customers if they would actually buy the product if it was available in the market. Which of the following methods of market testing is MSS Inc. applying in this scenario?

A) Minimarketing
B) Controlled sale
C) Test marketing
D) Speculative sale

Question 13

Identify the situation that most likely requires a company to conduct market testing on its new product.

A) The company's sales promotion plan does not depend on perfect execution.
B) The company's capital investments in the new product are high.
C) The company knows the business well and has been successful there.
D) The sales and revenue forecasts for the new product are conservative.

Question 14

Which of the following is the strongest argument for conducting market testing as late as possible?

A) It has least risk from competitors.
B) It is more useful and more reliable.
C) It minimizes costs.
D) It speeds up the market entry.

Question 15

Which of the following statements is NOT true of market testing?

A) There is a growing trend toward quicker, less costly market testing methods.
B) Test marketing is now a relatively minor market testing technique.
C) Test marketing is replacing scanner-based methods of market testing.
D) Many firms have replaced the traditional test market with a product rollout.

Question 16

InfoScan by itself is a method of market testing.

Question 17

The longer a firm waits to market test a product, the more it will know about the product and its marketing program.

Question 18

Pseudo sale is a more vigorous method of market testing than the controlled sale and much more revealing.

Question 19

Speculative sale method for market testing can be used in situations where industrial firms have very close downstream relationships with key buyers.

Question 20

Distributors and retailers/dealers are essentially avoided in informal selling.

Question 21

Which of the following methods of market testing was a spinout from concept testing and comes very early in the new product development process?

A) Speculative sale
B) Rollout by trade channel
C) Direct marketing
D) Simulated test marketing

Question 22

Identify the controlled sale market testing method that involves distributors and retailers or dealers in the process.

A) Direct marketing
B) Simulated test marketing
C) Informal selling
D) Minimarketing

Question 23

In the context of testing a new product, which of the following is true of test marketing?

A) It refers to a type of market testing in which a representative piece of the total market is chosen for a dress rehearsal.
B) It refers to a type of market testing that involves the sale of a (primarily) consumer product by a maker directly to a consuming unit.
C) It refers to a type of market testing that involves presenting a product to customers to find out if they would buy the product if it were actually available.
D) It refers to a type of market testing in which each store selling a product is used as a mini-city instead of using whole cities.

Question 24

Compared to other test methods, test marketing:

A) provides results that are highly projectable.
B) allows marketers to control all environmental factors.
C) offers the most abundant supply of information.
D) requires lower costs and is time-saving.

Question 25

Identify the method of market testing which is most likely to make use of a rollout.

A) Controlled sale
B) Pseudo sale
C) Full sale
D) Trial sale

Question 26

Which of the following types of market testing relies upon asking potential customers if they would buy the product if the product were actually available, but does not require them to spend money or take a risk?

A) Pseudo sale
B) Direct marketing
C) Full sale
D) Minimarketing

Question 27

Today, most firms primarily use test marketing to:

A) simulate real competitive environment using laboratory experiments.
B) fine-tune their marketing plans and learn how best to do so.
C) help decide whether to go national.
D) present a new product to customers as though it were available for purchase.

Question 28

Before launching its new breakfast cereal, Wish Foods Inc., decided to test the product in the market. The new products team decided to sell the cereal on a small scale in two major outlets of FourMart Inc., a retail departmental store. This technique of market testing would help create an actual buying situation and allow for flexibility in changing the product's price and other variables. Which of the following market testing methods does this scenario best illustrate?

A) Direct marketing
B) Speculative sale
C) Minimarketing
D) Visionary shopper

Question 29

Minimarket testing is a _____ method.

A) pseudo sale
B) controlled sale
C) full sale
D) speculative sale

Question 30

Which of the following statements is true of informal selling as a method of market testing?

A) The presentations in the informal selling method are for real, and cash sales take place.
B) The method involves asking customers if they would buy the product rather than directly asking them to buy the product.
C) The method is ineffective for products sold primarily by salespeople directly to end users.
D) The techniques used in the informal selling method are not feasible for industrial selling.

Question 31

The primary role of simulated test marketing in A-T-A-R forecasting is to:

A) help assess the competition in an industry.
B) create brand awareness for an existing product in a new market.
C) help evaluate if there is a customer gap created from using a product.
D) provide estimates of trial and repeat purchasing for a new product.

Question 32

To test its new product, Reliway Inc. chooses three cities to sell the product and three cities very similar to the first group where the product was not sold. All six cities were watched closely, and the stocking and sales of the new product were audited using the InfoScan system. This method helped the company fine-tune its sales plans. Identify the market testing method illustrated in this scenario.

A) Test marketing
B) Informal selling
C) Simulated test market
D) Speculative sale

Question 33

Merva Cosmetics Inc. primarily sells its products by mailing catalogs to consumers. The company tests its new product lines by simply listing them in some of its catalogs and counting the orders. Identify the market testing method being used by Merva Cosmetics.

A) Minimarketing
B) Rollout by influence
C) Direct marketing
D) Speculative sale

Question 34

As a method of market testing, which of the following is an advantage minimarket testing provides over test marketing?

A) Minimarket testing allows for greater flexibility in changing price and other variables of a new product when compared to test marketing.
B) Minimarket testing is free from retailer/distributor stocking problem, whereas test marketing is not.
C) Minimarket testing can be used for industrial goods and services, whereas test marketing cannot.
D) Minimarket testing involves laboratory experiments that do not require customers to make cash purchases, whereas test marketing results in a risk to customers.

Question 35

Which of the following methods of market testing fall under the category of controlled sale?

A) Test marketing
B) Speculative sale
C) Direct marketing
D) Simulated test market

Question 36

Which of the following is a controlled sale market testing method that involves real purchasing under some real competitive environment?

A) Concept testing
B) Direct marketing
C) Speculative sale
D) Simulated test market

Question 37

Which of the following statements is true of the speculative sale method of market testing?

A) It does not involve advertising.
B) It does not fit in a situation where a completely new product type has to be tested.
C) It is best used for projects with very high risk.
D) It creates an actual buying situation and observes what the consumers do.

Question 38

Why is informal selling highly suitable for industrial selling?

A) Because informal selling involves retailers or distributors in the process of testing a new product
B) Because informal selling involves no risk for industrial customers, as sales takes place without actually laying out money
C) Because industrial selling is based on clearly identifiable product features, and informal selling results in real purchasing
D) Because informal selling creates a false buying situation and observes what industrial customers do

Question 39

Which of the following statements is true of test marketing?

A) It is drastically replacing rollouts as a popular testing method.
B) It is a type of pseudo sale market testing method.
C) It is intended to offer simulated, controlled market conditions.
D) It is too expensive to be used as a final exam.

Question 40

Controlled-distribution scanner markets are based on scanner technology and have received much attention in the _____ field.

A) industrial services
B) consumer packaged goods
C) consumer services
D) industrial goods

Question 41

Which of the following statements is true regarding rollout?

A) Rollout is sometimes called speculative sale.
B) The knowledge obtained from rollout is significantly less than that obtained from test marketing.
C) The rollout method for market testing falls under the pseudo sale technique.
D) Today rollout is increasingly replacing test marketing.

Question 42

Which of the following is an advantage of the pseudo sale market testing method?

A) It results in actual cash sales.
B) It is cheap and quick.
C) It is intended to test a product in a real competitive environment.
D) It provides the best sales forecast when compared to other test methods.

Question 43

Discuss the pros and cons of using a rollout as a market testing tool.

Question 44

What are the costs involved in market testing?

Question 45

A rollout when compared to test marketing:

A) fails to provide as much market-related data.
B) gives competitors more time to beat the testing firm to national market.
C) allows the testing firm to minimize losses in case of failure.
D) requires more time to go national.

Question 46

Which of the following market testing methods is sometimes called limited marketing?

A) Rollout
B) Speculative sale
C) Simulated test marketing
D) Informal selling

Question 47

Describe direct marketing and minimarkets as methods of market testing and list their advantages.

Question 48

Discuss the various problems associated with simulated test markets.

Question 49

What are the two important insights that can be gained from market testing?

Question 50

Which of the following is an advantage of using test marketing?

A) It is the most economical market testing method for a new product.
B) It provides the best sales forecast and the best evaluation of alternative marketing strategies.
C) It reduces the risk for test marketers because its forecasts are highly projectable.
D) It is the most reliable method because it helps maintain confidentiality more than any other test methods.

Question 51

Which of the following is a drawback of test marketing?

A) Test marketing cannot be applied to test industrial goods and services.
B) Test marketing results are not really projectable.
C) Test marketing does not permit for verifying production.
D) Test marketing involves mathematical complexities.

Question 52

A firm desiring to use two or more market testing techniques for a new product is most likely to begin with a _____ method.

A) pseudo sale
B) controlled sale
C) trial sale
D) full sale