- Competition: While a marketer may not face competition in terms of sales, they may face competitive pressure from companies developing similar products, such as competition to acquire materials or technologies for product development, competition to line up product evaluators, and competition to get the early word out about the product to the news media. Additionally, competition may exist in the form of other types of products that potential customers currently use to satisfy needs targeted by the new product form. If these competitors are aware that a new product form is being developed, they may increase efforts to sell their product with the intention of reducing the market’s need for the new product.
- Target Market: Companies may test market the product among a small group of customers or within a selected geographic market.
- Product: Companies researching the product form begin to produce small quantities of the product, primarily for testing or to build initial awareness (e.g., for display at trade shows).
- Prices: Initial market price is discussed and if there are active test markets the company may be testing different price levels.
- Promotion: Promotion often begins prior to product launch as marketers prime the market. Emphasis may be on public relations in an attempt to encourage the media to discuss the product prior to launch. If a real test market is used, companies may be using several promotional options, including advertising and sales promotion.
- Distribution: For product sold through distributors, the ground work is being laid to build the distribution network. In some cases, distributor education and training will start prior to product launch.
- Profits: A small amount of revenue may be generated if real test markets are used but, for the most part. marketers continue to experience substantial costs.
Products that have moved to the late stage of development have done so because marketing research suggests there is strong potential for success. By this point, a marketer has a real product (not just ideas) and is in the position to test it in the market. Consequently, this stage matches the Market Testing step for New Product Development. Firms electing to test their product in real “test markets” will do so using all their marketing tools.