Test marketing refers to an experiment conducted in a laboratory with a set up of real life buying situations and actual stores. The buyers are unaware of their participation in the evaluation exercise. The time period of test marketing varies from weeks to months. Test marketing is very useful for the following reasons:
1. It provides a marketer an opportunity to observe consumer behavior towards a product in a real market situation.
2. It helps a marketer gain experience with a marketing program, and assess potential problem areas before launching a full-scale product introduction.
40 CFR 712.3 states that test marketing means distributing in commerce a limited amount of a chemical substance or mixture, or article containing such substance or mixture, to a defined number of potential customers, during a predetermined testing period, to explore market capability prior to broader distribution in commerce.
Test marketing provides a great deal of information about the future success of a product and is often used to make profit and sales forecasts.