Abstract:

In this paper, the authors take as their theme the growth of new product development research technology, and in particular simulated test market modeling in the U.S.A. Emphasis is not placed on the various models themselves but on the uses and abuses of their application in solving questions about new product potential. A short resume of new product development research in the context of risk evaluation is presented and the new technology is shown to be part of a broader metamorphosis taking part in the American research industry. The authors’ prime argument is that innovative research technology is only of merit if it is correctly applied and interpreted. To illustrate this, a perspective is set using new product development at the Adolph Coors Company as background. Within this, via a dialog between marketer and researcher, various topics are explored as they relate to the use of simulated test market models and in the light of recent U.S. litigation on the accuracy of such modeling. Issues of accuracy, validity, marketing support plans, realism, competitive reaction and the planning horizon are raised, and where appropriate, solutions offered. The paper concludes with a check list that the authors consider needs to be observed if management is to maximize the use of innovative research tools and processes for better decision making in the pursuit of reducing marketing risk.