Clarification of Answer by
ozguru-ga
on
04 Aug 2002 10:48 PDT
Dear seddonaaz,
The following are a few extra snippets that I hope you can use. The
most useful link provides some further ideas on positioning strategy
and profitability analysis from Columbia:
“Analyze each country in terms of customer characteristics (size of
target market :affluent, over $25k; credit card penetration, match of
company strengths with customer needs), competition, environment
(infrastructure, risk, cultural factors)
Conclusion: Australia/Singapore are wealthy, well developed
infrastructure but saturated. Safe, low return.
Taiwan/Thailand/Malaysia -- medium risk and return
India/Indonesia/Phillipines -- high risk and return”
http://www.columbia.edu/~gvj1/b6601/revses2.doc
____
This excerpt from Citicorp’s 1993 Annual Report shows the growth in
consumer banking, a general positioning comment and an indication of
the cross-selling potential (investment products):
“Citibank has built the first consumer banking business spanning the
Middle East
and Asia-Pacific, with 3.7 million accounts in 16 countries from Saudi
Arabia to
the Philippines and from Korea to Australia.
Citibank's business in this region, with 97 branches, is built on an
upscale
customer base, stressing a high level of service featuring 24-hour
access,
Citigold and funds transferability, global reach and investment
knowledge. An
independent regional survey of affluent consumers ranked Citibank
number one in
brand awareness.
Investment products were expanded to seven markets during the year, in
a
strategic move to address increasingly diversified customer needs and
compete
for investment dollars with non-bank rivals. From a zero base two
years ago,
investment products in the region generated $16 million in revenues in
1993.
By year end, CitiPhone 7-day, 24-hour service was available in all
markets.
Citigold, developed and first introduced in Asia, grew its customer
base by 38%
during the year. Citigold accounts make up over 50% of Citibank's
deposit base
in the region.”
http://www.sec.gov/Archives/edgar/data/20405/0000950130-94-000286.txt
_____
A recent businessweek article citing Citibank’s successful Asian
penetration.
http://www.businessweek.com/2001/01_09/b3721170.htm
_____
The use of information from the launch in one country to model future
launches
http://gsbwww.uchicago.edu/news/capideas/spr01/progressive.html
_____
“Success” in Taiwan: Market share, but not little profit. However,
this article does not address the profit from cross-selling and
customer lifetime value:
http://taipeitimes.com/news/1999/09/08/story/0000001342
_____
Bare facts from Duke University, could be used as a check:
http://faculty.fuqua.duke.edu/~kurtc/bio/marketing360/Powerpoint/CitibankSummary.ppt
_____
Case Study Review, a pointer to the number crunching expected:
http://www.ecch.cranfield.ac.uk/europe/pdffiles/obtain/Caserevpdfs/9-595-026.pdf
_____
A note about sales channels:
“The heavy reliance on mass communication in developed markets is
based on the premise that delivering a message through a medium such
as television or magazines is less expensive than delivering it
through face to face contact. But in emerging markets, the
face-to-face method has always been more economical. When Citibank
launched its credit card in Asia, it found that in many markets the
cost per customer of door-to-door sales was lower than a range of mass
media, including magazine inserts, direct-mail, and take-one
application forms placed on sales counters.8 Personal selling also
allows for more customized and interactive messages to be delivered to
the customer. A characteristic important at an early stage in a
product’s life-cycle, such as credit cards in Asia at the time,
leading to better conversion rates than, say, television advertising.”
http://eres.bus.umich.edu/docs/workpap-dav/wp320.pdf
_____
This Berkley course suggests direction for analysis, perhaps useful as
a check:
1. Calculate Customer Acquisition Costs of the 4 methods in Table A.
(Assume 250 working days per sales person).
2. Use a step-wise approach to calculate total costs for different
sizes of operation: volumes of 250K, 500K, 750K, and 1 million cards.
Make assumptions where a range is provided for fixed or variable
costs.
3. Use the data in Table B to estimate average revenue per customer.
(State any assumptions you use.) At what size of operation will
Citibank break even?
4. Delineate 4 segmentation criteria that Citibank can use to segment
the Asia-Pacific market. Rank or rate each country in terms of these
criteria.
http://www.haas.berkeley.edu/~market/PAPERS/PRIYA/BA206.doc
Regards,
,
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