Sales Forecasting Through Test Marketing

Test marketing is an age old yet one of the most popular forecasting techniques used by marketers and businesses to forecast future sales for a newly developed product.

Test marketing is a process of dividing the market into two smaller (beta) regions to launch the product i.e. Test Market, where the product is brought to the consumers without any advertisement or marketing efforts & Control Market, where the product is advertised and marketed.

Gap Analysis

The difference between the total sales in Test and Control market is computed and analysed. This Gap Analysis helps to forecast future sale of a newly developed product or for a new market of an already existing product.

Key Points To Be Noted

This is a quantitative method of forecasting which requires huge investment as well as time. It is suitable for newly developed products or new markets. This method doesn’t require past data hence all the data collected throughout the analysis is quite reliable and provide accurate forecasting.