F*ck Focus Groups. Market Test Your Product Instead.

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Abstract

rticipants are aware that the situation is artificial. As a result, they may develop biased opinions. The concept can be compared to reality television shows, where reality stars are likely to act differently when they know they are being filmed. Focus groups only target a specific group of people, failing to consider the opinions of random buyers.</p><p id="d3ad">For example, in the 1990s, General Mills was looking to implement a marketing strategy that would allow them to increase their market share. At the time, Kellogg’s was dominating the cereal market. <a href="https://www.mentalfloss.com/article/618808/fingos-hybrid-cereal-snack-disappointment-90s">General Mills came up with a new cereal called<i> </i>Fingos</a>, which was intended to be an all-day breakfast or snack that consumers could eat with their fingers. Before launching the product, General Mills developed a focus group to determine customer opinions on Fingos.</p><p id="328d">In the experiment, participants loved the concept and taste of Fingos. Subsequently, General Mills spent millions of dollars on marketing and soon released the product into the general market. Despite the success of Fingos within the focus group, the product failed miserably on shelves. If the company had conducted a test market, they could have anticipated the product failure, significantly reducing uncessary manufacturing and advertising costs.</p><h2 id="0d3e">Target Market Selection & Location</h2><p id="5f0d">When choosing the perfect test market location, there are a number of factors to consider. The population of the test market, for example, must be representative of the population that would later sell the finalized product. Most test markets consider a mix of industries, genders, ethnicities, as well as blue and white-collar occupations. Moreover, test market locations tend to have low-to-medium media costs, average-sized populations with conservative shoppers, and no dominating products or close competitors.</p><p id="83e1">London, Ontario and Winnipeg, Manitoba are i

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deal test market locations within Canada. Both cities meet the above requirements and have a long history of test market products. <a href="https://www.cbc.ca/listen/live-radio/1-70/clip/15775127">For example, the Johnny Cash ATM was first tested in London, and Pepsi Wild Cherry Cola was first tested in Winnipeg</a>. If test market locations are selected accordingly, they can enable promotional buzz, determine potential sales performance, generate early customer reviews, and reveal crucial product insights.</p><h2 id="e3e0">Remaining Innovative</h2><p id="06d7">In the business world, successes are frequently glorified. Even in test markets, there is no guarantee that a product will sell once it is released to shelves.</p><p id="9668">Product failures may happen for a number of reasons, such as high margin costs, poor branding, lack of customizable offerings, and inadequate forecasting. Therefore, companies must remain proactive throughout the product development process, finding consistent ways to expand customer reach and increase market share. In the midst of COVID-19, intelligent market strategists have compared the crisis to past dilemmas, such as the 2008 economic crisis or the collapse of the World Trade Center in 2001. By studying how consumers react in similar situations, opportunity gaps can be identified.</p><div id="a0f9" class="link-block"> <a href="https://kairose.medium.com/membership"> <div> <div> <h2>Read every story from Kai Rose (and thousands of others on Medium) </h2> <div><h3>As a Medium member, a portion of your membership fee goes directly to Kai Rose and other writers you read. You’ll also get full access to every story.</h3></div> <div><p>kairose.medium.com</p></div> </div> <div> <div style="background-image: url(https://miro.readmedium.com/v2/resize:fit:320/0*ijwXxoQ6xZkPXYdt)"></div> </div> </div> </a> </div></article></body>

The importance of test marketing and why it matters.

“The definition of insanity is doing the same thing over and over again, but expecting different results.” — Albert Einstein

To mitigate risks in the product development process, marketing strategists use rigorous research tactics. Becoming an informed decision-maker is crucial when considering the raw material, manufacturing, distribution, and marketing costs associated with launching a new product. Loyal customers become frequent purchasers because they see value in regularly purchasing a specific product or service. Despite the fact that new products are constantly being introduced to the market, up to 90% of them fail to thrive on store shelves. Hence, test markets are frequently used determine the likelihood of a product’s success.

The Power of Test Marketing

In a test market, companies are able to assess their product in the real world before distributing it nation-wide. Contrary to focus groups, test market data is not subject to the Hawthorne effect.

“The Hawthorne effect is a term referring to the tendency of some people to work harder and perform better when they are participants in an experiment.” — Kendra Cherry

In focus groups, participants are aware that the situation is artificial. As a result, they may develop biased opinions. The concept can be compared to reality television shows, where reality stars are likely to act differently when they know they are being filmed. Focus groups only target a specific group of people, failing to consider the opinions of random buyers.

For example, in the 1990s, General Mills was looking to implement a marketing strategy that would allow them to increase their market share. At the time, Kellogg’s was dominating the cereal market. General Mills came up with a new cereal called Fingos, which was intended to be an all-day breakfast or snack that consumers could eat with their fingers. Before launching the product, General Mills developed a focus group to determine customer opinions on Fingos.

In the experiment, participants loved the concept and taste of Fingos. Subsequently, General Mills spent millions of dollars on marketing and soon released the product into the general market. Despite the success of Fingos within the focus group, the product failed miserably on shelves. If the company had conducted a test market, they could have anticipated the product failure, significantly reducing uncessary manufacturing and advertising costs.

Target Market Selection & Location

When choosing the perfect test market location, there are a number of factors to consider. The population of the test market, for example, must be representative of the population that would later sell the finalized product. Most test markets consider a mix of industries, genders, ethnicities, as well as blue and white-collar occupations. Moreover, test market locations tend to have low-to-medium media costs, average-sized populations with conservative shoppers, and no dominating products or close competitors.

London, Ontario and Winnipeg, Manitoba are ideal test market locations within Canada. Both cities meet the above requirements and have a long history of test market products. For example, the Johnny Cash ATM was first tested in London, and Pepsi Wild Cherry Cola was first tested in Winnipeg. If test market locations are selected accordingly, they can enable promotional buzz, determine potential sales performance, generate early customer reviews, and reveal crucial product insights.

Remaining Innovative

In the business world, successes are frequently glorified. Even in test markets, there is no guarantee that a product will sell once it is released to shelves.

Product failures may happen for a number of reasons, such as high margin costs, poor branding, lack of customizable offerings, and inadequate forecasting. Therefore, companies must remain proactive throughout the product development process, finding consistent ways to expand customer reach and increase market share. In the midst of COVID-19, intelligent market strategists have compared the crisis to past dilemmas, such as the 2008 economic crisis or the collapse of the World Trade Center in 2001. By studying how consumers react in similar situations, opportunity gaps can be identified.