The Importance of Test Marketing

Posted by Lubrizol Performance Coatings Team on 07/31/2019

You might think you have the greatest new product since sliced bread, but do your target customers and/or their target customers agree? Test marketing is an important component of the product development process that helps us collect and understand customer feedback. It helps ensure there are people who want the product and gives us critical information that enables fine tuning product performance and launch plans prior to a full-scale launch. The result will be a better, more marketable product.

 

Reid Hoffman, internet entrepreneur and co-founder of LinkedIn, advises innovators to “launch a product that embarrasses you” in his fall 2018 article “7 Counterintuitive Rules for Growing Your Business Super Fast” on Medium.com. He’s not advocating to produce a bad product, but he’s referring to test marketing and bringing minimum viable products to market faster. He writes, “If you need to choose between getting to market quickly with an imperfect product or getting to market slowly with a perfect product, choose the imperfect product nearly every time. Getting to market fast allows you to start getting the feedback you need to improve it. Any product that you’ve carefully refined based on your instincts rather than real user reactions and data is likely to miss the mark and will require significant iteration anyway. Speed really matters and launching early lets you climb the learning curve to a great product faster.”

Crystal Pepsi: Good Idea or Bad Test Marketing?

Yum Brands CEO David Novak is a big proponent of test marketing, encouraging others to seek feedback prior to launch while having the courage to listen and act on that feedback. In a Forbes Podcast interview, Novak said he learned an extremely valuable lesson when he helped create and launch Crystal Pepsi in the early 90s. He said it “was the best idea I may have ever had in my career.” That’s an interesting statement considering Crystal Pepsi is widely considered a perfect example of a failed product launch.

At the time, Novak was in marketing and inspired by trends for clear liquids, which led to the idea for Crystal Pepsi. Prior to launch, Novak engaged in test marketing and sought feedback from channel partners but was so focused on bringing the product to market, he ignored the critical feedback that might have enabled Crystal Pepsi to become another iconic brand.

"The bottlers told me, 'David, it's a great idea, and we think we can make it great, but it needs to taste more like Pepsi,'" Novak said. "And I didn't want to hear it. I was rolling the thing out nationally and I didn't listen to them."

The failure of Crystal Pepsi taught Novak a lesson. "I learned there that you have to recognize that when people are bringing up issues, they might be right. The next step is making the effort to find evidence that either proves or disproves these issues and make your decision accordingly. Then, the final and most important step is explaining why the decision was made,” he said in the podcast.

Novak is passionate about sharing his experience so other marketers can have the confidence to be courageous to listen to test marketing feedback, adjust and communicate the logic of those decisions back to their teams. Novak said he realized team alignment is critical to sustainable success and it ultimately led to his promotion.

Test Marketing At Lubrizol

At Lubrizol, our mission is to improve lives as an essential partner in our customers’ success. That means we must deliver innovation that is impactful to our customers and their customers and ultimately end users. Because of our upstream position in the supply chain, we believe test marketing is even more critical to our innovation efforts in order to truly deliver positive impact downstream. That requires strong customer relationships where we can work together to solve some of today’s most challenging problems.

Test Marketing Considerations

We find the most successful product launches leverage test marketing programs that include many of the elements listed below. The companies that demonstrate the greatest successes over time are those that strive for continuous improvement regularly asking what they did well and how they can improve.

  • I engage my suppliers, customers and channel partners in innovation and share my strategic innovation priorities.
  • I develop a plan with my suppliers to test new innovations including objectives, definitions of product success & failure, testing protocols, substrates, robustness criteria, feedback sharing guidelines, timing, and responsibilities.
  • I invite my suppliers to participate in lab, production and customer trials as appropriate.
  • I develop a plan for test marketing with my customers and channel partners including objectives, definitions of product success and failure, testing protocols, substrates, robustness criteria, feedback sharing guidelines, timing, responsibilities.
  • I share my product test marketing plans & timing with my suppliers.
  • I ensure the team responsible for engaging customers is prepared with quantified value proposition, pros/cons of the product, application recommendations and regulatory profile.
  • I actively listen to the received feedback and adjust the product development & launch plans.
  • I engage my suppliers to address actions from my customers’ feedback. I share specific feedback about what did and did not work as well as areas that must be addressed for mutual success.
  • I fund the development cycle program with staffing, line time and marketing support.

When properly performed, test marketing can lead to a better chance of success in the market. It can also help in getting to market faster, addressing product concerns prior to a full-scale launch, gaining early sales from minimum viable products, identifying unmet needs for next-generation products, and revalidating and rating the product features that matter most to refine the value proposition.

As you consider new product innovations to solve current industry challenges, talk to Lubrizol about collaborating to develop and test market for success.

Lubrizol Performance Coatings Team

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