Test Markets

The fatality rate for new ventures is high. New businesses and even new products from established businesses fail frequently, for one reason or another. Test-marketing new products has become key to the risk management involved in new ventures, because such tests can shed light on the product's potential [Page 449]appeal before the full complement of resources has been committed to rollout. A market test is a key element of market research, in which a new or modified product, good, or service is offered to a limited market in order to observe its response. This is done after initial research—the in-house development, determination of pricing, and so on—and often after the focus group stage, in preparation for introduction to the full market. The process is known ...