Test marketing by foreign investors in Nepal

Test marketing by foreign investors in Nepal

What is test marketing?

Test marketing is “a marketing method that aims to explore consumer response to a product or marketing campaign by making it available on a limited basis before a wider release.” It is done to analyze the demand for such a product in the targeted market and to know the review of the customers on the product. Through test marketing, the producer can ascertain the success ratio of the new product.

Why is test marketing done?

  1. To determine diverse uses of the product, the category or group of users, and the purpose that attracts the users to use or buy the product.
  2. To determine the latest trends and demands of the public and also to analyze the general competitiveness in the market.
  3. To extract the necessary information required for formulating a proper marketing decision like advantages and disadvantages of the new product, new uses or applications of the product, modifications if needed to make the product or its usage better, etc.
  4. To sharpen the knowledge of the territory for marketing.
  5. To decide the marketing strategy with respect to pricing, promotions, and distribution systems.

Test marketing by foreign investors in Nepal

Test marketing for a manufacturing company with foreign investment is permissible for importing goods in Nepal.  The Industrial Enterprises Act, 2020 regulates the matter relating to testing marketing and permits test marketing within prescribed terms and conditions. The prescribed terms and conditions are set out in the Industrial Enterprises Regulation 2020.

Industries operating under foreign investment may be given the approval to import goods produced by the head office located in foreign countries for production, market development, and promotion of new goods for a prescribed time period under prescribed terms and conditions.

The prescribed terms and conditions are listed below:

  1. The industries operating under foreign investment who wants to import goods produced by the head office located in foreign countries for production, market development and promotion of new goods have to file an application before the Registering Authority along with full details of goods, quantity, and time period for importing such goods.
  2. After an application is filed before the Registering Authority then such application is referred to One-Stop Service Centre for approval.
  3. One-Stop Service Centre conducts necessary examinations and after satisfaction may provide approval for a period of not more than one year under the following conditions:
  4. The details of the import, selling, and distribution of imported goods to be provided to the Registering Authority every month.
  5. The goods that are to be imported should not have been imported, sold, and distributed in the market of Nepal before by any other individual, enterprise, firm, or company.
  • The imported goods shall not be sold commercially in the market of Nepal.

DISCLAIMER – The information provided above is designed for helpful information on the subject discussed. It is not meant to be used, nor should it be used as legal advice.

For further information contact us at  info@apexlaw.com.np