Assessor Model for Simulated Test Markets
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Firms that produce consumer‐packaged goods use simulated test markets to forecast the long-run market share of a new product before introducing it in the marketplace.
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Contributed by: Asim Ansari (March 2011)
Open content licensed under CC BY-NC-SA
Snapshots
Details
Market share is given by 
, where 
represents trial, the percentage of the target market that will eventually try the product, and 
represents repeat, the long-run share among the triers.
The trial can occur because of awareness and availability 
of the new product or because of sampling 
.
The trial due to awareness and availability is computed from 
, where 
is trial under complete awareness and availability, 
is the proportion of the market that will be eventually aware, and 
is the proportion of stores that will carry the product in the long run.
The trial due to sampling is given by 
, where 
is the proportion of the market that will receive a free sample and 
is the probability of usage of a free sample conditional on receiving it.
Thus 
.
The repeat component is given by 
, where 
is the competitor's switching rate and 
is the new brand's switching rate.
A. J. Silk and G. L. Urban, "Pre-Test-Market Evaluation of New Packaged Goods: A Model and Measurement Methodology," Journal of Marketing Research, 15(2), 1978 pp. 171–191.
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