A Case Study to Investigate how Beta Product Marketing can Test the Validity of a Product’s Market Potential

Abstract

Many entrepreneurs and start-ups come to the point when they have finished the development of a product but then moves to the phase which is crucial for a products success, the marketing effort. Large investment costs combined with the uncertainty of the developed product's market value is the reason for many products failure. Thus, many new products never reach the market because of the lack of certainty concerning the products market potential.
This thesis aims on spreading some light on the market value of a product by using a new method, described by the thesis as "Beta Product Marketing". This method builds on the principle of developing a so called beta product. A beta product is a prototype that is introduced into the market as if it was the finished product. By analyzing the responses from these sales, one can, according to the thesis, better determine the market potential of one's product and thereby get important insights before taking large investment risks.
The thesis consisting of two main parts, one being the development of a product and the latter treating the field of exploring the market.
This thesis resulted in a prototype that could be introduced as if it was the finished product. The Beta Product Marketing resulted in a small study comparing the method to a standard way of predicting the market attractiveness. It was stated that the method seemed to predict the market quite well but that the research needs more data to be verified.

Abstract (Swedish)

Många entreprenörer och startup kommer till en punkt när de har slutfört utvecklingen av en produkt men flyttar sedan till den fas som är avgörande för en produkts framgång, marknadsföringsbiten. Stora investeringskostnader i kombination med osäkerheten om den utvecklade produktens marknadsvärde är orsaken till många produkters misslyckanden. Detta leder till att många nya produkter aldrig når marknaden på grund av bristen på säkerhet över produktens marknadspotential.
Examensarbetet syftar till att öka kunskapen och säkerheten kring en produkts marknadsvärde genom att använda en ny metod som beskrivs av examensarbetet som "Beta Product Marketing". Denna metod bygger på principen att utveckla en så kallad beta-produkt. En beta-produkt är en prototyp som introduceras på marknaden, som om det var den färdiga produkten. Genom att analysera svaren från dessa försäljningar kan man enligt examensarbetet bättre avgöra marknadspotentialen för en produkt och därigenom få viktiga kunskaper innan man tar stora investeringsrisker.
Examensarbetet består av två huvuddelar, en är utveckling av en produkt och den senare behandlar området för att utforska marknaden. Examensarbetet resulterade i en prototyp som kunde introduceras, som om det var den färdiga produkten. Beta produktmarknadsföring resulterade i en liten studie som jämförde metoden till ett vanligt sätt att förutsäga marknadens behov. Enligt examensarbetet verkade metoden förutsäga marknaden bra men studien behöver mer data som kan verifiera undersökningen.

Popular Abstract

Often a product is developed, but it turns out there is no customers standing in line to buy it. By making sales of the so called “beta-product” one could potentially better evaluate the products market value and thus be sure when making the call for investment.
Many entrepreneurs and start-ups perform the marketing effort, but the predictions received from these studies are often quite uncertain. Large investment costs combined with the uncertainty of the developed product's market value is the reason for many products failure.
The method "beta-product marketing" aims on shedding some light on the market value of a product by trying to sell a finished prototype as if it was the finished product. So, what in the title is called a fake sale is actually a sale of a functioning prototype, which by the customer is perceived as the finished product.
A thesis was written treating this interesting subject with the title A case study to investigate how beta product marketing can test the validity of a product’s market potential. The study is not yet finished but it is an interesting field to study with a large potential. Firstly a beta product is created, which is a prototype that by the customer can be regarded as the real deal, then the beta product is sold as if it was the real launch. The hypothesis behind the method is that, by analyzing the responses from the beta product marketing, one can better determine the market potential. This has a large benefit as it can save a lot of money and time.
A Beta Product Marketing was conducted alongside a traditional market survey where it was identified that the responses from these different methods did not correspond. This represents the error factor of letting a potential customer hypothetically giving consent to the product from actually buying the product. From the survey more than 50 percent declared that they would probably or definitely buy the product while 0 percent actually bought the product during the Beta Product Marketing.
The thesis requires more data to evaluate the method but a lot is learnt along the way. Discussions on important aspects to keep in mind when conducting a Beta Product Marketing is made. Such as the effectiveness of this method concerning different types of products, sale environment and number of beta products to produce.
There is a large potential for this method and if bigger studies are made, important discoveries in the field of product development can be made.
Fadi Hanna

• author: Hanna, Fadi
• supervisor: Damien Motte; Devrim Göktepe-Hultén
• organization: Innovation
• course: MMKM05 20181
• year: 2018
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Beta Product Marketing, market validity, entrepreneurial marketing, prototype, test sales
• language: English
• id: 8952172
• date added to LUP: 2018-06-27 08:52:16
• date last changed: 2018-06-27 08:52:16