What are Test Markets?

A test market is like dipping your toe in the water before jumping in the deep end.

Test markets are like when you’re a kid, and your mom only lets you have ONE cookie before dinner. You’re not allowed to go ahead and scarf down the whole plate of cookies because that would be bad for you. So instead, she eases you into it by letting you have just one. That way, she can gauge your reaction and ensure you can handle the whole thing before she goes ahead and lets you have the rest of the cookies. Companies are doing the same thing when it comes to test markets. They ease their product into one or more limited geographic regions and measure consumer response before deciding whether or not to roll it out on a larger scale. That way, they can make sure that people want the product and that they can handle all of the logistics involved in selling it on a larger scale. So next time you’re feeling frustrated because your mom only lets you have one cookie, think of test markets and be thankful that someone is looking out for your best interests…even if it means depriving you of cookies.

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