Market testing is a crucial step in the product development process where companies evaluate consumer response to a new product or service before full-scale launch. It involves introducing the product to a limited market segment to gather feedback, measure demand, and assess its potential success. Market testing helps companies determine the viability of their offering, uncover any issues or areas for improvement, and refine their marketing strategy based on real-world data. By conducting market testing, businesses can make informed decisions and mitigate risks associated with launching a new product or entering a new market.