Page 170 - DMGT408DMGT203_Marketing Management

Unit 7: New Product Development and Product Life Cycle Strategies

Test Market: The company test-marketing, the new product selects a few cities representing Notes
target markets, employs all final national launch promotional tools, including advertising and
sales promotion, etc., and also employs sales force to motivate resellers to keep the product. It
is like a mini national launch, and is quite expensive.
Other methods companies use to conduct test marketing include laboratory tests, demonstrations,
and putting the product in exhibitions and trade fairs.
Some methods of test marketing expose a product to natural marketing environment to make
an assessment of its acceptability to target consumers and its sales performance. By testing a
product in a limited area, the company can learn about any weaknesses in the product or other
marketing mix elements. This is of great advantage to the marketer as it provides an opportunity
to correct the shortcomings. A product shortcoming after a nationwide launch can be very
expensive for a company. Through test marketing, a company can try varying pricing, advertising
and promotional mixes, as well as different types of packaging.
Test marketing involves risks, too. Besides being expensive, competitors may attempt to interfere
by increasing advertising and other promotions, and lowering prices. This may affect the accuracy
of test results. In case the product seems to be a success, competitors may copy it without
spending heavy resources and introduce their product, while the original product is still in
testing stage. Simulated test marketing ensures relative safety because of its quicker speed,
lower costs, and tighter security.

Did u know? According to Leslie Brennan, Gillette’s Personal Care Division spends less
than $200,000 for a simulated test.

Caselet Blade Runner

n a country of more than a billion people, only 3.8 billion shaving blades are sold
every year. And of these, an overwhelming 97 per cent is double-edged blades. That
Idoesn’t leave much scope for twin-blades, does it? Gillette India doesn’t seem to agree.

In October 2003, it introduced the Gillette Vector Plus in another effort to slice open the
market for twin-blade shaving systems. The USP: the product claims to take care of the
perennial issue of hair clogging between the blades.
Take a look at how the Indian market for twin-blades has shaped up. Since Gillette introduced
the first twin-head shaving system, the 7 O’Clock PII, in the mid-1980s, the market has
grown three-fold: from an estimated ` 200 crores in 1986 to ` 600 crores in 2002.
Twin-blades, which were just 3 per cent of the value (` 6 crores) in 1986, have increased to
nearly 28 per cent of the value (` 168 crores). And Gillette commands nearly 80 per cent of
the twin-blade market. But that’s still only 80 per cent of a minuscule 114 million units
market.
The biggest and the most obvious reason for the preference for the archaic double-edged
blades is cost. For the price of one low-end disposable twin blade, you can buy a pack of 10
double-edged blades.
Gillette did try to get around that problem earlier: in 1993, it introduced the Gillette
Presto, a disposable twin-blade, at price points as low as ` 7.
Contd...

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