Citi Bank India Credit Cards: Strategy for Profitable Growth

4321 WordsOct 25, 201418 Pages
MARKETING 611 SECTION 005 CITIBANK INDIA CASE Learning Team A5: Mohammad Al-Ali, Greta Carlson, Patricia Ligon, Scott Schultz, Mike Xu, Max Young Word Count: 1496 In assessing the marketing strategy of Citibank India's credit card business, Harpreet Grewal is faced with two choices: maintain the current strategy, with its higher margins but shrinking growth opportunities, or expand into new target segments/geographies with their attendant challenges and uncertainties. He would likely find that a new product launch is justified. While Citi's position in the super-affluent/affluent segment remains strong, its falling market share combined with the growth of the emerging affluent (E.A.) and mass market suggest a change…show more content…
Segmentation The credit card customer in India can be segmented by Citi's own classifications - super- affluent, affluent, E.A., and mass market - or by India's Socio-Economic Classification (SEC) scheme. Citi's classification is more useful, as it provides more granular data. From data in Exhibits 7 and 10 as well as in the text, Grewal can produce Exhibits A1 & A2, which summarize the breakdown of the Indian population by wealth as well as geographic location, i.e. top 8 cities, remaining urban areas, and rural areas. To simplify the analysis, Grewal can assume all households are the same size - while this is not exactly the case, it provides a sufficient approximation. There are roughly 85 million people in the largest 8 Indian cities, of which 6-7 million are in the super-affluent or affluent segments that are Citi's current focus. As its shrinking market share demonstrates, however, growth of the Indian credit card industry is passing Citi by, due in part to expansion of the two sectors Citi left behind after the financial crisis. Targeting If Citi wishes to adjust its strategy, there are two sensible choices for new targets - the E.A. and/or mass-market consumer in the top 8 cities, or the super-affluent/affluent in other urban/rural areas within India (See Exhibit A2). The former offers a much larger potential market (12 million new

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