Test Marketing: A Perturbation in the Market Place

New products achieve positions in the market place by disrupting existing brand loyalty and switching patterns. Test markets can be viewed as going through phases of equilibrium prior to new product introduction, disequilibrium during introduction and return to equilibrium. This process is described by transition matrices of brand loyalty and brand switching. A method of analysis is developed which provides indices of the market's stability prior to new product entry, disequilibrium created by the introduction and the market's return to stability. This enables marketing management to judge the impact of introduction as well as evaluate test market results in approximately half the length of time normally required by conventional methods.