Test marketing and pilots

Test marketing, also called a pilot, means offering a new good, service or marketing campaign to a small set of customers, a single area or selected outlets before a full launch. You run the idea on a small scale, watch how people react, then decide whether to roll it out everywhere. A drinks firm might, for example, sell a new low-sugar fizzy drink in 15 shops in one city for two months before trying to supply supermarkets across the country.

Why a business runs a pilot

• Measuring popularity before a wider launch: the business finds out whether people actually buy and re-buy the product, or respond to the campaign, before paying for full production, packaging and national advertising. If the pilot flops, far less money has been risked.
• Predicting stock and supply needs: a pilot shows how quickly stock sells out and which sizes or flavours people choose. The business can then order sensible quantities for the wider launch instead of over-ordering and being left with unsold stock, or under-ordering and disappointing customers.
• Gaining testimonials from early adopters: customers who try the product first can give quotes and reviews. These genuine opinions can be used in later advertising, which is more convincing than a business simply saying its own product is good.

The drawbacks

• Results may not be representative: one town or one small group of people may have different tastes, incomes and ages from the whole market, so a hit in the pilot does not guarantee a hit nationally, and a flop may wrongly persuade the business to give up.
• Competitors find out earlier: a pilot is visible, so rivals can see the idea, copy it or bring out their own version before the full launch.
• Delays reduce potential revenue: running a pilot for weeks pushes the national launch back, so money comes in later and a competitor may reach customers first.

Keep test marketing separate from a consumer trial: a trial gives selected people the product to experience, while a pilot tests the product or campaign in a limited area or group.