Iceland as a test market
Elvar Bjarki Helgason, sales manager at Iceland Post, tells us of his country’s capacity as a test market. When developing a new product or service you need to fully understand how your offering will function in the market. The use of test markets is a great way to understand how consumers will react and how a new product or service will meet with consumers’ needs and demands.
About Iceland
Iceland’s small population of almost 310,000 may be comparable to an average town in Europe, but the high useage of information and communication technology, levels of education and consumer buying habits make this small Nordic nation a preferred test market. You will find several products there which have not yet been introduced and marketed worldwide.
Ranking seventh on the overall Networked Readiness Index, Iceland is one of the world’s most technologically sophisticated societies, with one of the highest levels of internet and molbile connectivity in the world. Iceland is already a global leader in e-commerce and the majority of the population conducts its banking online.
Iceland’s economy has been diversifying into manufacturing and service industries over the last decade, with new developments in software production, biotechnology and tourism. The economy combines a capitalist structure and free market principles. Prior to the 2008 crisis, Iceland had achieved high growth, low unemployment, and a remarkably even distribution of income.
Five reasons to test market in Iceland
First of all, Iceland is a small market with a homogeneous and highly educated population. This makes changes easy to implement.
Secondly, although part of Europe, Iceland has always had a good relationship with North America, making Iceland the ideal test market for products or services for all of those markets. English is widely spoken and understood and business practices are very similar to Western Europe and North America.
The third reason is that Iceland offers few barriers, whether legal, geographic, or economic, to the latest technological innovations.
A fourth reason is ease of market penetration, One of the advantages of using Iceland is that the market size makes it easier to penetrate the market with a lower cost than elsewhere.
Finally, advanced communications services have often reached Iceland before they are seen in most other countries in the world. As in other Nordics, Iceland adopted many telebanking and other information and communication technology infrastructures long before other countries.
The General Motors example
General Motors, Toyota and DaimlerChrysler all used Iceland as a test market for their hydrogen fuel cell prototypes. It took GM only eight weeks and the cooperation of two government agencies to obtain permits and construct a Shell Hydrogen station in Reykjavik. In Washington, D.C. it took 18 months and required permission from 49 different government agencies.
This article was featured in November 2009’s issue of the Mail & Express Review. To subscribe, click here.
