The encyclopedia · R&D & Science · Product decision · 1973–1983
ASSESSOR halved test-market failures for 100 packaged-goods clients
Management Decision Systems' ASSESSOR simulated launch in 450 new-product cases, halving test-market failure rates and saving clients $120M.
Management Decision Systems
The solution
Launching packaged goods is expensive because most new products fail, and the cost is concentrated in test market and national rollout. In the 1970s, Management Decision Systems built ASSESSOR, an integrated modeling and measurement system that forecasts a new product's sales potential before test marketing.
ASSESSOR uses survey and measurement data in a model of trial, repeat purchase and competitive response, giving management forecasts and diagnostics early enough to kill weak products cheaply.
Over a decade it was applied to 450 new products, helped cut test-market failure rates by almost half, and saved its 100 client firms an estimated $120 million.
Why it worked
- Filtering losers before test market avoids the most expensive part of failure.
- Diagnostics told managers why a product would fail, not just that it would.
- A validated model scaled across hundreds of launches.
- Forecasts plus diagnosis let firms redesign, not just abandon, weak entries.
What can be applied
For expensive launch decisions, a cheap predictive model that filters losers before test market compounds: halving the failure rate was worth more than any single product's profit.
Aftermath
ASSESSOR became one of the best-documented pre-test-market systems in marketing science and was published in Interfaces (1983).
Sources
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