The product development team at Busby's Briquettes has been working on several modifications of Busby's highly successful line of charcoal briquettes. The most promising development is a new briquette that provides a unique smoky flavor to grilled meat. Management, based on favorable feedback from a few employees who have tested the product in their homes, feels that the new briquette has the potential to become a major seller.
At a recent strategy session, the vice president of marketing suggested a test-marketing program before committing to an introduction of the new briquette. He pointed out that a test market would be a good way to evaluate the effectiveness of two alternative advertising and promotional campaigns that have been proposed by Busby's ad agency. He feels that effectiveness should be evaluated in terms of the trial- and repeat-purchasing behavior engendered by each program. He also wants to gauge Busby's current distributors' acceptance of the new product.
The CEO of Busby's, however, is not very enthusiastic about the idea of test marketing. She pointed out several of her concerns, among them the fact that Busby's competitors could easily duplicate the new briquette, the fact that the company is nearing the limit of budgeted costs for developing the new briquette, and the fact that the seasonal nature of briquette sales makes it imperative to reach a "go-no go" decision on the new briquette by mid-December, only four months away.
The director of marketing research stated that she felt a test market could be devised that would satisfy both the vice president of marketing and the CEO. She was instructed to submit a preliminary proposal at the next strategy session.
a. What information should be obtained from the test market in order to satisfy the vice president of marketing?
b. Under what constraints must the test-marketing plan operate in order to satisfy the CEO?
c. Given your answers to (a) and (b), what method of test marketing should the director recommend? Why?