Chapter 7 Pretest market forecasting

6. Summary Pretest-market models provide a low-cost and rapid method to test the combined product, advertising, price, promotion, selling and distribution plan. The ‘full proposition’ analyses are sufficiently accurate to identify most winners and eliminate most losers. They provide an effective way to control the risks of failure and supply actionable managerial diagnostics to improve the product. The output is a high-quality product that meets customer needs and reaches the market quickly. Pretest-market models are an accepted practice for most frequently purchased products, but are relatively new for consumer durables. They are now being developed and tested for really new industrial products and services. Since pretest markets are extremely valuable in reducing risk and increasing the expected benefit of new products, we expect that proven models will soon be available for all products and services. Research on premarket forecasting in these new industries should be the highest priority for future work.

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