Citibank: Launching the Credit Card in Asia Pacific

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Citibank: Launching the Credit Card in Asia Pacific

Citigroup is an American multinational financial services company based in New York City. Citigroup was formed from one of the world 's largest mergers in history by combining the banking giant Citicorp and financial conglomerate Travelers Group. Nowadays is one of the world’s largest banks. In 2010 was in 22nd position worldwide, ranked on its total assets. Finally, it has the world 's largest financial services network, spanning 140 countries with approximately 16,000 offices worldwide, 260,000 staff around the world and holds over 200 million customer accounts.

In 1989, Citigroup tried to penetrate in Asian Pacific countries by establishing new ways of payment such as credit
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Also there is wide using of cards and especially for shopping. By 1989, Citibank held an 8,7% share of the credit card market. Projected 170,000 cards annually, with revenues of 16,279,144$ is the desired result. (Table B, page 6)

• Break even: SP-(FC÷VC)=BE 12.18-(104,300,000÷626,000,000)=BE 12.18-0.16=BE BE=12.02

SP=(100,000+140,000)(1)×8.7%(2)= 12,180

(1)140,000 Classic and Gold Visas 100,000 Diners Club cards

(2) Market share

SP: Selling price
FC: Fixed Cost
VC: Variable Cost
BE: Break Even

The Fixed Cost (FC) is the same in all countries, so FC=104,300,000$ (Exhibit 3, page 11, Total Other Assets in 1988)

The Variable Cost (VC) is the same in all countries, so VC=626,000,000$ (Exhibit 3, page 11, Net Income in 1988)

Citibank should make concurrent entry to these countries and estimate how many cards totally needs to issue in order to achieve the desired profitability.

The marketing strategy which Citibank should follow differs among countries. The bank must establish direct marketing product with Bind-ins, direct sales force, direct mail and takes-ones. Also must create

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