Abstract:

On the French Financial market, in the late 80's, the "SICAV monetaires" (Funds invested in monetary markets) experienced a very specific situation : they bore a high interest rate although they were at the same time almost liquid and very secure. They appeared as the perfect product, so, no surprise, they experienced a strong development and represented, in 1993 a market of 140 billions ECUS. In the context of diminishing short term interest rates and government incentives towards long term investments, it appeared important to be able to answer the following questions : - How to estimate owners' reactions in case of reduced profitability ? What are they going to do with their SICAV monetaires ? - What alternative products will meet their requirements ? - How will they arbitrate between their difierent expectations ? The paper is aimed at presenting the kind of research approach that was used to answer those questions. It is based on a Trade-off approach, which allowed to identify the relative "utility" for the individuals of the main criteria involved in the financial product ownership. It has then been possible to simulate changes in expected behaviour induces by changes in the offer. Main results of the research are presented. They will illustrate the type of customer segmentation that can be built of the method and show how to define the product characteristics to be proposed to meet the needs of each identified segment.