What is the term for introducing a new product to a small number of potential customers to gauge their reaction?

• A. Pilot marketing
• B. Test marketing
• C. Focus group testing
• D. Market simulation

Answer: (B)

The term for introducing a new product to a small number of potential customers to gauge their reaction is known as test marketing. This method allows a business to collect feedback on various aspects of the product, including its features, pricing, and overall market appeal. By doing this, companies can make necessary adjustments before a full-scale launch, reducing the risk of a product failure in the wider market.

Test marketing typically involves launching the product in a limited geographical area or to a specific target audience. This approach provides valuable insights into customer preferences and helps businesses to assess the potential success of the product. It can also reveal unexpected challenges, allowing companies to optimize their marketing strategies.

Pilot marketing, which may seem similar, generally refers to a broader trial run of a product or service in a defined market, often involving a more extensive rollout and alternative marketing strategies. Focus group testing involves gathering a diverse group of people to discuss their perceptions of a product, rather than testing the product in a market scenario. Market simulation involves creating a hypothetical market environment to predict outcomes, which may not directly involve actual consumer reaction to the product.