Test Marketing essentially refers to a sort of dry run before a company goes out for a full-blown nationwide launch of any product or service. That’s the reason why a lot of products/services are available in South India before the rest of the country knows about it (Docomo telecom services, Danone’s entry into India with chocolate milk, TION’s market entry etc).
So, now we know that test marketing is done in southern parts of India. Any guesses as to the reasons behind that?
Two primary reasons:
1. Relative media isolation: Compared to other parts of the country, south India is less into limelight, especially in the national media (of course, they have their own regional channels as well as an established movie industry, but then, how many people outside south India watch them).
Hence, in case a company experiences product failure, then the failure would not be broadcast much. Obviously a company would prefer if its failures are not highlighted.
2. Rationality/Literacy: Due to higher rationality as well as literacy, south Indians are ones who are more likely to evaluate new offerings in more detail, and take decisions with prudence, instead of the various emotional strings that marketers try to pull.
Hence, south India is also a tough market to be successful in, since the only major factor affecting success is product quality. So if you succeed in this market your product quality is ideal.
Of course, there are certain products wherein this would not be an ideal case. Take for instance the luxury and super-luxury products, the Harleys and Audis of the world. These products sell on the show-off factor, and hence are better test marketed in places where they have a potential market. The potential markets are in metros and tier-1 cities. Places like Ludhiana could be a useful place for test-marketing them, because of relative seclusion accompanied by the flair for luxury (with the country’s most Mercedes units running on those roads, no further grounds are needed to prove the flair)
Hence, for products where South India is not a good representation of the country, such as products which thrive upon exuberance, show-off as well as panache, it is not an ideal test market. For all else, it proves to be a good testing ground for trial by fire.