• Simulated Test Markets

• Simulated Test Markets

Companies also can test new products in a simulated shopping environment. The company or research firm shows, to a sample of consumers, ads and promotions for a variety of products, including the new product being tested. It gives consumers a small amount of money and invites them to a real or laboratory store, where they may keep the money or use it to buy items. The researchers

note how many consumers buy the new product and competing brands. This simulation provides a measure of trial and the commercial's effectiveness against competing commercials. The researchers then ask consumers the reasons for their purchase or non­purchase. Some weeks later, they interview the consumer by phone to determine product attitudes, usage, satisfaction and repurchase intentions. Using sophisticated computer models, the researchers then project

national sales from results of the simulated test market. Recently, some marketers have begun to use interesting new high­tech approaches to simulated test market research, such ,­is virtual reality and the Internet (see Marketing Highlight 14.2),

Simulated test markets overcome some of the disadvantages of standard and controlled test markets. They usually cost much lews, can be run in eight weeks and keep the new product out of competitors' view. Yet, because of their small

samples and simulated shopping environments, many marketers do not think that simulated test markets are as accurate or reliable as larger, real­world tests. Still, simulated test markets are used widely, often as 'pretest' markets. Because

620 • Chapter 14 Product Development and Life­Cycle Strategies

Marketing

Virtual Reality allowing as many as 40 people

at one time to participate in a vir­

Test Marketing:

Highlight

tual reality experience. The

The Future is Now

14.2 VisionDome is like an [MAX the­

atre, but with one big difference ­ It's a steamy summer Saturday

it's interactive. According to an afternoon. Imagine that you're

ARC executive, when conducting stopping off at the local supermar­

research on a ear, 'we can go into a ket to pick up some icy bottles of

VisionDome, sec that car in three your favourite sports drink before

dimensions, look at it from every heading to the tennis courts. You

angle, take it out for a test drive park the car, cross the car park

and allow the customer to config­ and walk through the shop's auto­

ure that car exactly the way he matic doors. You head for aisle 5,

wants it'. Caterpillar sees enor­ passing several displays along the way, and locate

mous potential for the Dome. 'We can put one of your usual sports­drink brand. You pick it up,

our tractors in a VisionDome and actually have a check the price and take it to the checkout

customer sit in it and test it under whatever con­ counter. Sounds like a pretty typical shopping

ditions they would use it for, 1 says a Caterpillar experience, doesn't it? But in this case, the entire

design engineer. 'The ability to immerse people in experience took place on your computer screen,

the product makes it a phenomenal [research and not at the supermarket.

sales] tool.'

You've just experienced virtual reality ­ the Virtual reality as a research tool offers several wave of the future for test­marketing and concept­

advantages. It's relatively inexpensive. For exam­ testing research ­ courtesy of Gadd International

ple, a firm can conduct a Simul­Shop study for Research. Gadd has developed a research tool

only about ecu 20,000, including initial program­ called Simul­Shop, a CD­ROM virtual­reality

ming and the actual research on 75—100 people. approach that recreates shopping situations in

This makes such research accessible to firms that which researchers can test consumers' reactions

can't afford full market­testing campaigns or the to such factors as product positioning, store lay­

expense of creating actual mock­ups for each dif­ outs and package designs. For example, suppose a

ferent product colour, shape or size. Another cereal marketer wants to test reactions to a new

advantage is flexibility. A virtual reality store can package design and store­shelf positioning. Using

display an almost infinite variety of products, Simul­iShop on a standard desktop PC, test shop­

sizes, styles and flavours in response to con­ pers begin their shopping spree with a screen

sumers' desires and needs. Research can be con­ showing the outside of a grocery store. They click

ducted in almost any simulated surroundings, to enter the virtual store and are guided to the

ranging from food store interiors and new car appropriate store section. Once there, they can

showrooms to farms, fields or the open road. The scan the shelf, pick up various cereal packages,

technique's interactivity allows marketers and rotate them, study the labels — even look around

consumers to work together via computer on to see what is on the shelf behind them. About

designs of new products and marketing pro­ the only thing they can't do is open the box and

grammes.

taste the cereal. The virtual shopping trip Finally, virtual reality has great potential for includes full sound and video, along with a guide

international research, which has often been dif­ who directs users through the experience and

ficult for marketers to conduct. With virtual re­ answers their questions.

ality, researchers can use a single standardized Virtual reality testing can take any of several

approach to evaluate products and programmes forms. For example, Alternative Realities Cor­

worldwide. For example, a multinational com­ poration (ARC) has created a virtual reality

pany conducting virtual­shopping studies in amphitheatre called the VisionDome. The Dome

North and South America, Europe, Asia and offers 360 by 160 degrees of film projection,

Australia can create virtual stores in each coun­

New­Product Development Process • 621

try and region using the appropriate local prod­ interactions with consumers ­ interactions that ucts, shelf layouts and currencies. Once the

encompass not only research, but sales and ser­ stores arc on­line, a product concept can be

vice as well. They see great potential for conduct­ quickly tested across locations. Research results,

ing this type of research over the Internet, and revealing which markets offer the greatest oppor­

virtual stores have become a reality on the Web. tunity for a successful launch, can be communi­

As one observer notes, 'This is what I read about cated to headquarters electronically.

in science fiction books when I was growing up. Virtual reality research has its limitations.

It's the thing of die future.' For many marketers, Simulated shopping situations never quite match

that future is already ;» virtual reality. the real thing. It is not clear how true test partici­ pants' responses are in a simulated experience. So what's ahead for virtual reality in marketing?

SOURCES: Quotes and extracts from Raymond It. Hurke,

Some pioneers are extremely enthusiastic about

'Virtual shopping: breakthrough in marketing research',

the technology ­ not just as a research tool, but as

Harvard Business Review (March­April 1996), pp. 120­31:

a place where even real buying and selling can Tom Dellacave, Jr, 'Curing market research headaches', Sales

and Marketing Management (July 1996), pp. 84­5; Brian

occur. They predict that the virtual store may

Silverman, 'Get 'ein whilo they're hot', Sales and Marketing

become a major channel for personal and direet

MtnutgemtMt (February 1997), pp. 47­8, 52.

they are fast and inexpensive, they can be run to assess quickly a new product or its marketing programme. If the pretest results are strongly positive, the product might be introduced without further testing. If the results are very poor, the product might be dropped or substantially redesigned and retested. If the results are promising but indefinite, the product and marketing programme can be tested farther in controlled or standard test markets. 17