Why European Financial Institutions Do Not Test‐market New Consumer Products

Looks at the use of test‐marketing among European financial institutions. A total of 46 companies participated in the study. It is shown that, on average, test‐marketing is the least frequently conducted new product development stage (16‐18 per cent). It is also the least proficiently managed. Describes five factors that inhibit the use of test markets in the financial services sector: it is just as costly to test‐market as to launch; the new product is a copy of a competitor′s product; the value of the product has been established earlier through research; it is difficult to produce test‐market conditions; it is unwise to delay the product′s launch for competitive reasons. Finally examines some of the purposes of test‐marketing.