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Test marketing has some benefits, but we believe the negatives far outweigh the benefits. Some of the negatives include: WASTED TIME. You can't afford to waste the time that test marketing takes, especially since the essence of branding is getting into the mind first. TIPPING OFF THE COMPETITION. Test marketing will alert competitors and perhaps stimulate one or more of them to introduce similar products. UNPROJECTABLE RESULTS. Test marketing for Enamelon toothpaste projected $50 million in annual sales nationally. Actual sales: $10 million. One of the problems with test marketing is overstimulation of demand. To get enough tangible results to measure, you usually have to run a local marketing program that you can't afford to run nationwide.
Aflac, the company that brought us the duck. In the year 2000, the company had a name recognition of 12 percent. Today it’s 94 percent. And sales have gone up just as dramatically. Aflac sales in the American market went up 29 percent the first year after the duck arrived. And 28 percent the second year. And 18 percent the third year.
Too often, however, greed gets confused with positioning thinking. Charging high prices is not the way to get rich. Being the first to (1) establish the high-price position (2) with a valid product story (3) in a category where consumers are receptive to a high-priced brand is the secret of success. Otherwise, your high price just drives prospective customers away.
issue is clear. It’s the difference between building brands and milking brands. Most managers want to milk. “How far can we extend the brand? Let’s spend some serious research money and find out.” Sterling Drug was a big advertiser and a big buyer of research. Its big brand was Bayer aspirin, but aspirin was losing out to acetaminophen (Tylenol) and ibuprofen (Advil). So Sterling launched a $116-million advertising and marketing program to introduce a selection of five “aspirin-free” products. The Bayer Select line included headache-pain relief, regular pain relief, nighttime pain relief, sinus-pain relief, and a menstrual relief formulation, all of which contained either acetaminophen or ibuprofen as the core ingredient. Results were painful. The first year Bayer Select sold $26 million worth of pain relievers in a $2.5 billion market, or about 1 percent of the market. Even worse, the sales of regular Bayer aspirin kept falling at about 10 percent a year. Why buy Bayer aspirin if the manufacturer is telling you that its “select” products are better because they are “aspirin-free”? Are consumers stupid or not?