Alpen Bank Case Study Essay

876 Words Oct 13th, 2011 4 Pages
1. Should Alpen Bank launch a credit card? And how would the credit card opportunity compare to focusing on core business of banking service?
Considering the economic and market conditions explained in the case as well as the cost revenue analysis, Alpen should launch a credit card. * The rapid economic growth has led to higher incomes which have increased the proportion of middle class and upper-middle class in the society. This growth has also led to an increase in disable incomes, means that people have more money to spend. * The country has 10% households who have 24% of the wealth. These people have sufficient income and are conscious about their social image and less sensitive to prices. * Although it is still
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It may be costly at the beginning but it will become profitable business.
Compare to its core banking business for the affluent which the company has already penetrated into the market, credit card business is still infancy in Romania but has a lot of growth potential. Some competitors has already provided credit card for their customers so that if Alpen Bank will not start soon, it may lose its potential customers to competitors.
2. How should Alpen Bank position its credit card?
Alpen Bank has a reputation for excellence in serving affluent clients. However, it considers whether it should also target middle class customers for credit card launching.
As far as I am concerned, Alpen Bank should position its card as a premium product because of many reasons: * The existing customers belong to the affluent class so it will be easier for the company to extend the business based on this segment of customers * This class represents top 10% of households by nearly 24% of the wealth. They were also conscious about their image and sought products or services that suit their status * They were less price sensitive about annual fees, more likely to experience low levels of consumer debt, and tend to use their cards with greater frequency. * Although, the two-year profit from targeting only affluent consumers appears to be

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