Old Adages Teach Lessons When It Comes to Testing

By: JP Beauchamp and Shelly Murphy

“Measure twice, cut once,” is a saying we hear every day that points to the need for carefully evaluating an opportunity or initiative before diving in.

Given the generally low success rates of new product introductions, it’s not a hard sell to encourage more and better new product testing before going to market.  IRI’s 2012 New Product Pacesetters reported that just 68 percent of new products introduced achieved first year sales of $7.5 million.  But, what about activities other than product launches, such as product packaging and store layouts?  Over a series of three blogs, we will discuss the enhanced role testing should play in all aspects of a product and retail experience to the shopper.

IRI recommends organizing testing around three broad activities, all highly-centered on increasing the understanding of shoppers’ attitudes and behaviors, and geared to creating an enhanced product and/or retail experience:

  • Innovation Testing – Evaluation of new product concepts, packaging, ingredients and related product attributes
  • In-store Testing – Measuring shopper actions and responses to specific store layouts, planograms and similar in-store activities
  • Advertising/Marketing – Creating testing metrics around traditional, online and integrated campaigns

Enhanced testing serves two roles.  It arms product and retail decision makers with information to assess the market opportunity prior to investing significant funds and resources, and enabling them to determine the resource investment necessary to ensure success.  It also enables manufacturers and retailers to manage risk.  Decision makers can weigh the risk and reward of multiple opportunities occurring simultaneously and invest only in those that show the most promise.

A great example of effective testing occurred recently with a manufacturer interested in introducing a line extension that included packaging in smaller-sized jars and offered at a lower price point.  The manufacturer was eager to test the idea that to combat escalating prices, utilizing smaller packaging and a lower price point would retain existing customers and expand the customer base.

In this example, Innovation Testing revealed a sales increase of more than 5 percent, translating to a $2 million nationwide opportunity and achieving both stated business goals.

In today’s brand and retail environment, where shoppers continue to be price conscious while concurrently demanding better value, testing is a “must have” experience for manufacturers and retailers alike.  In our next two blogs, we will discuss specific benefits and types of testing covering innovation, in-store and advertising.

Do you have a testing experience you’d like to share where you’ve supported or changed plans on an upcoming product launch, store initiative or campaign?  If so, please share!

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