Advanced Concept Testing
Our preference is, where possible and economically feasible, to use the product test marketing approach prior to introducing the product to the full market. We favor this approach not only in terms of ultimate cost to the bank but also because it enables the bank to evaluate true market responses to the product. In this way the various manipulations in the marketing mix may be considered. Up to this point, market responses have necessarily been limited to the product concept. Thus, this approach also lets the bank know what competitive reactions are likely to be.
However, we realize that this method of testing is not always possible or feasible for a bank. We do believe that some form of advanced concept testing should take place even in the absence of a test market situation. The added information gained at this stage may cause significant changes to be made in the product or it may result in the product’s reverting to a prior stage for reevaluation. In our experience, it is worth the time and effort expended to structure and conduct some kind of evaluation of the product attributes, whether this evaluation is conducted in an experimental setting or under actual market conditions. The point is to take the time to test prior to commercialization. You can be assured that the market will test your product whether you intend for it to do so or not!
The issue of concept testing was addressed at some length in Chapter 4. However, the focus there was on separating the more obvious “good” product concepts from the obviously “bad” concepts. The focus of advanced concept testing, by contrast, is to examine product attribute features and capabilities by rigorous testing under controlled conditions with a representative sample of targeted consumers. At this point of the framework, we are concerned with establishing physical characteristics for new products or services that are acceptable and which consumers are likely to purchase. The objective is to convert ideas and concepts into actual products that are acceptable, provide consumer benefits, and can be delivered by the bank at their required profit level.
Referring again to Chapter 4, we see that the initial step in the concept evaluation stage is to measure customer reactions to descriptions of new products. Promising ideas have been converted into concept statements to which prospective customers are exposed. These prospective customers are asked if they would buy the product as configured and asked to state their reasons why or why not. Modifications are then made in the product concept and again tested with a similar set of prospective customers. When a product concept appears well defined in terms of customer acceptance, an actual product is development consistent with the concept. In other words, the concept takes on physical properties which the consumer can more easily evaluate.
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