Studying New Product Performance In Virtually Created Retail Environments

Dieter Bock
Langnese-Iglo, Division of Unilever
Bernhard Treiber
Treiber + Partners

Simulated Test Markets: Current Problems

Successful product development (PD) is mostly viewed as an integrated process, with several conflicting requirements: customer satisfaction, time-to-market, cost reduction, and development costs are all closely interrelated, and prove difficult to meet simultaneously as strategic goals (Smith and Reinertsen, 1998). This is all the more true in industries such as FMCG, with their increasingly shorter product life cycles, fragmented consumer needs, and higher than ever market introduction and mortality rates. These and other changes put an emphasis on fast, accurate, and less expensive input from a variety of sources, most importantly including rapid input from customers (Datar et al, 1997). These requirements for customer input apply across all stages of the PD process, from opportunity identification and idea generation, concept development and selection, to testing in pre-test markets. This paper will examine how research activities at a relatively late stage of the PD process can respond to these challenges, namely Simulated Test Markets (STMs).