If I were to sell somebody a financial product how hard would it be? Well, very hard. Believing in a financial product is very difficult. This was the agony of a newly established mutual fund which came up with a mutual fund product. It wanted to know whether the product will be well accepted by the customers. Therefore, the company did a discriminate analysis. It selected a sample of people to whom certain questions were asked. As the question were posed for this purpose only, the questions were highly relevant. The questions asked which were also independent variables were:
a). The information about such product
b). Income effect on the investment decision
c). Number of dependent members in a family
d). The level of exposure to other financial products
The grouping variable was the level of acceptance of the mutual fund product in which highly acceptable was given a range of 1 and not acceptable was given a range of 2.
The result was good in terms of accuracy as the accuracy came out to be 79% and anything above 50% is considered to be a good accuracy.
The unstandardized table tells about how much a particular variable has had influence on the dependent variable. In this case, it was the acceptability of the mutual fund product. The company found out that the information about the mutual fund product has had the maximum influence. The Wilk’s Lambda value was quite high at about 0.92 and the Eigen Value at 0.08 which is a sign of good grouping of variables.
The end result found out from this exercise was that insufficient information about these products to the people is the major reason behind the unacceptability of such products.
The company did a first level analysis by checking the respondent’s frequency to different responses and thus checking the reliability of the data collected and analysed.
The company had to make a strategic decision as to how to increase the awareness about the product. It came out with different forms of print and electronic advertisements to create sufficient information about the product so that people find it acceptable. The company promoted its disclosure norms and so it created loyalty in the people for its product. The product sales are definitely high but the full blown proportion of sales is yet to be seen with the information flow still expanding.
Name: Sakshi Tripathi