The Importance of Marketing Experimentation in Branding

In today’s economy, consumers are more conscious of what makes a good product or quality service and are more involved in making informed buying decisions.  Testing and analyzing a product before launching to the market is therefore essential for long-term success. Entrepreneurs must find credible evidence to determine if a product is viable. Marketing experimentation is a valuable tool for aiding this effort.

Consumers represent a brand’s most valuable asset. When customers’ appetite changes, businesses need to adapt to those changes or risk losing a competitive edge. Entrepreneurs can no longer rely on mere suppositions of the possibility of what they think will motivate consumers to act. To be successful, they will need to rise to the challenge of understanding “what is,” rather than “what is presumed” to appeal to consumers to be competitive. Consider market experiments to avoid failure of any pitfalls.

This article will highlight three important marketing experimentation that entrepreneurs should consider in branding for their business.

Let’s review!

Understanding Marketing Experimentation

Market experiment is the process of making changes to a brand’s products to see how consumers respond. For example, if a company wants to market a new mobile phone and wishes to compare it with an older version to see which one will result in more consumer-based sales, an experiment would be performed with both the new and old model and the results measured. The results may be either qualitative or quantitative, depending on the study of purpose.

Three Types of Marketing Experimentation

A/B Test

A/B testing is a way to compare two variables in marketing communication and evaluate the outcomes to see which one is doing better. It is vital to bear in mind that only one element of communication is assessed at a time so that you can understand how the element impacts performance. Testing more than one aspect at the same time does not accomplish the goal of an A/B test.

According to Hootsuite, “to perform A/B testing—also known as split testing—you separate your audience into two random groups and show a different variation to each one.”  For example, you need to compare two versions of a leads capture page to learn more about which call to action (C-T-A) performs better. You may have a capture page A with red C-T-A and the variant capture page B with orange C-T-A. To run your A/B test, you then send 50% of your traffic to version A and 50% to version B. Whichever version yields the highest click-through indicates that version will perform better. So, if version A with the red call to action performs better when designing your marketing campaign, you should consider sending your traffic to capture page A.

“A/B testing is widely used because A/B tests are easy to deploy, easy to understand, and easy to explain to management.”
― Christopher D. Manning, Introduction to Information Retrieval

Pricing Studies

In some instances, entrepreneurs often struggle to find the right price for their products or services. With pricing studies, you will be able to discover what consumers are willing to pay for a product or a service. That is important as it will guide you in your decision making for optimal profit, whether you increase or decrease your price.

For example, the Harvard Business Review reported that Allstate had launched a five percent lower-than-Standard Value Plan, a new Gold Plan, five percent above Standard, and a new Platinum Plan, fifteen percent above Standard.    The outcome revealed that ten percent of customers chose the Value Package, and twenty-three percent chose Gold or Platinum. Through pricing studies, Allstate “demonstrated that car insurance doesn’t have to be about being the lowest-price game.” 

“The ability to process, monitor and analyze information in real-time so that consumers are provided with contextualized and highly personalized pricing-based offers is a commerce imperative.”
― Bill Waid, GM at data analytics firm FICO

Concept Testing

Concept testing is the process of using surveys to evaluate consumer acceptance of a new product idea prior to the introduction of a product to the market,” according to Wikipedia.  It evaluates how consumers respond to the new product or service before launching so that entrepreneurs can see which concept consumers want to prevent potential errors. This is ideal when multiple ideas are presented.

Let’s look at the example highlighted by HubSpot, Yamaha wanted to know whether it should use knobs or sliding faders on its Yamaha Montage keyboard and survey its customers to determine their preference for the instrument. After receiving over 400 detailed responses from musicians, Yamaha knew precisely how to design the keyboard to fit the needs of its target audience, using concept testing. 

If you plan on developing an innovative product and want to determine the demand and customer preferences, as well as market potential, concept testing is a great method.

Conclusion

Market experimentation offers a robust framework for measuring the sustainability of a product or service. The data will help you create customer-friendly products and services, and an efficient marketing campaign likely to be successful.

Knowing that each brand is different, with differing needs in creating and releasing a new product, concept testing is an ideal starting point in branding.

So, are you ready to expand on your product idea?

What’s next!

According to Qualtrics, “If you want to greatly increase the odds of turning a product concept into a profitable asset, market research testing is essential.”  That will appeal to the customer journey and ensure viability of your products.

Start with learning more on How to Create a Product Concept Test.

Let’s also look at my last article.

Please share your thoughts and comments.