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When, Where, and How to Test Market
Test marketing has proper uses and serious limitations. It provides a measure of sales performance and the opportunity to identify and correct any weaknesses in the product or in the marketing plan. It is, however, costly and laborious. Four factors to weigh in determining the efficacy of test marketing are: the cost and risk of product failure against the profit and probability of success; the difference in scale of investment between a test and a national launch; the likelihood of being copied and preempted by the competition; and the costs in money and reputation of a product failure.