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.