Bonneville Communications Is Concerned About Test Marketing Its New Device. Which Of The Following Is Not A Disadvantage Of Test Marketing That Would Likely Concern Bonneville Communications?

Solution To The Multiple Choice Question (MCQ)

The correct answer is D) as in Test Marketing, marketers get better understanding and know-how valuable market experience about company’s products or services before fully launching the new device or service into the market. It is the main advantage of test marketing which the company (Bonneville Communications) has by implementing Test Marketing.

In order to solve this mcq, the students must have clear understanding about test marketing, its advantages / merits and disadvantages / demerits which are discussed below:

What Is Test Marketing

Test marketing means a company wants to test its new product or service so that the company can check what is probable result will be when the customers try it before fully launching the product or service into the market. The company wants to make some experiments before introducing its product or service such as whether the customers like the product or not. What kind of age like the product the most? Whether the customers like the taste of the product or not. What to be done to improve the quality of product. The answers of such questions may help the company in launching a successful product or service into the market.

Advantages Of Test Marketing

1. The marketer will get actual and real feedback from customers before launching a new device or service.

2. The company will know better understanding of the targeted customers in a particular area of region about its new product or service and accordingly adopt marketing strategy i.e. comparing to different regions, the marketer will find that in the south region most of the people like the product or service.

Disadvantages Of Test Marketing

1. It is time consuming (may be one to 3 years) to test a product or service into realistic situations before launching the product or service into the marketplace and finally it may be possible to get the potential customers in the marketplace.

2. The cost of testing marketing is very high as it requires human resources and finance which can be a big loss if required outcomes are not achieved.

3. Due to huge investment of conducting test marketing, competitors take competitive advantage by producing better and less costly product or service than its competitors by gaining secret information about new product or service through spy person. A competitor should avoid this unethical conduct and should focus on improving its product or service quality.

4. Test marketing can not give guarantee of success as it is applied only in selected small segmentation of market so there is a high risk involved in it i.e., whether the new product in different regions of population can satisfy the customers’ needs or not, whether it will sustain in different marketplaces or not, etc.