PepsiCo has developed a new flavor of soft drink that it wants to test to determine reactions of probable buyers.
Which of the following test-market characteristics would be least useful to PepsiCo when testing the new soft drink?
a. There are research and audit services available in the test area.
b. Retailers in the test area would be cooperative.
c. Testing efforts would not be easily jammed by competitors.
d. Tourism is a major industry in the test area.
e. The test area has stable year-round sale of soft drinks.
The correct answer and explanation is :
The correct answer is d. Tourism is a major industry in the test area.
Explanation:
When PepsiCo tests a new soft drink flavor, the goal is to gather accurate data about how typical consumers react to the product in a setting that closely reflects their usual buying environment. In this context, the characteristics of the test market are crucial in ensuring that the results of the test provide valid insights about the potential success of the new product in the broader market.
Let’s break down why tourism being a major industry is least useful:
- Tourism introduces unpredictability: Tourists are not regular consumers in the area, and their preferences or buying patterns may not reflect those of the local population. Tourists may purchase the product as a novelty or because it’s something new or different, which can skew the results. For example, a soft drink might perform well in a tourist-heavy area because tourists are more likely to experiment with something new, even if local residents are not as interested in the flavor.
- Other factors are more relevant for a realistic market test: The other test-market characteristics are far more relevant. The availability of research and audit services ensures that data collection is efficient and accurate, and cooperative retailers make it easier to control and distribute the product in the test market. A market where competitors can’t easily jam the testing is important for maintaining the integrity of the results, and a stable, year-round sale of soft drinks indicates a consistent market for testing, ensuring that seasonal fluctuations do not affect the findings.
- Tourism adds variability: The presence of a tourism-based economy introduces variability in purchasing behavior, as tourists’ preferences and habits differ from the local population. Therefore, tourism complicates the analysis of local market dynamics, which is vital for testing the actual appeal of a product.
In conclusion, while tourism may influence sales in some cases, it doesn’t provide a reliable measure of how the product will fare in the market among the intended regular consumers.
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