A stage in a product’s development when it is made available to a specific and limited group of customers in order to assess how the product will be accepted in the wider marketplace.

Within marketing and business, a test market is a geographic domain or demographic collection of people used to determine the success rate of a product or service in a projected larger market. This activity takes place prior to releasing the product or service to the public domain. This is done by evaluating a population that is demographically comparable to the suggested target market and conducted in a contained environment away from saturated media advertising, enabling the test to be effective and practical cost-wise.

See also:
Marketing
Demographic data 
Focus groups