Citibank Case Analysis

1655 Words Jun 26th, 2012 7 Pages
Citibank: Launching the credit card in Asia Pacific
Country entry strategy

Objectives of this case ...

 To understand market evaluation, target market selection, and product positioning issues in services operations.  To appreciate globalization/country entry issues in financial products.  To understand the underlying economics of customer acquisition and retention.

Key Strategic Issues
Should Citibank launch the card product ? Why ? Why not ? Given the upscale customer base , how should Citibank position its card, if it decides to launch it ? Which countries should Citibank enter first? Which countries should it avoid?

Few More Operational Issues
How should Rana Talwar convince his country managers and H.Q to
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Cost of direct sales
Assumptions

 10 sales calls /day, 20 days/month means

2400 calls per sales person / yr.  to reach 30,000 prospects , citibank would require 12.5 sales people (30000/2400)  at a cost of $18000 / sales person, total cost of direct sales approach is $225000

Customer Acquisition Analysis Direct Sales
 Prospects :30,000  Response Rate : 50.0%  No of Responses : 15,000  percent Qualify : 66.7%  Qualified Prospects :10,000  Percent Convert : 80%  Customers : 8,000  effective Customer Rate :27%  cost per prospect : $ 18000  Total cost : $225,000  Cost per customer : $ 28.11

Customer Acquisition Analysis Direct Mail
 Prospects :300,000  Response Rate : 2.0%  No of Responses : 6,000  percent Qualify : 66.7%  Qualified Prospects : 4,000  Percent Convert : 80%  Customers : 3,200  effective Customer Rate : 1.1%  cost per prospect : $1.50  Total cost : $450,000  Cost per customer : $140.55

Customer Acquisition Analysis Take one
 Prospects : 2,000,000  Response Rate : 1.5%  No of Responses :30,000  percent Qualify : 33.3 %  Qualified Prospects :10,000  Percent Convert : 80%  Customers : 8000  effective Customer Rate : 0.4%  cost per prospect : $ 0.25  Total cost : $ 500,000  Cost per customer : $ 62.56

Customer Acquisition Analysis – Bind inns
Prospects : 3,000,000 Response Rate : 1% No of Responses :30,000 percent Qualify : 33.3 % Qualified Prospects 10,000 Percent Convert : 80%

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