Juejogn

As initially a consumer banker in Asia region, Citibank has been a very successful revenue plunderer in consumer banking products and services. To further boost up future earning, Rana Talwar, the head of Citibank’s Asia Pacific Consumer Bank, has decided to bring in their very new product, i.e. credit cards. Should the cards being introduced and sold in Asia Pacific? Does the market, or to be known as countries, been suitable enough for Citibank’s credit cards business? If it does, how can Talwar do to penetrate and to expand their influence in the very diverse Asia Pacific region? Analysis has been done.

Break-even Analysis for the Nine Targeted Asia Pacific Rim Marketplaces Customer Acquisition Analysis Table One: To Obtain 500,000 cards Channel Unit Cost Prospects Reached Response Rate Direct Mail 1.5 2.7 million 2% Take-Ones 0.25 18 million 1.5% Direct sales 18,000/100 sales person 270,000 50% Bind -Ins 0.15 27 million 1% Total Costs: 14.4 million Fixed Cost Analysis: Table Two Fixed Cost Amount Call Center 35 million Additional c/s 15 million Advertising 18 million Total Cost: 68 million Our breakeven point to cover cost in this scenario becomes around 996,000 customers. This is determined by taking total cost 82.4million/ per new c/s contribution 82.65. Yet, adding in the cross services sold to additional customers and credit card sales to current customers, even with 500,000 new customers targeted for credit cards in nine countries. The goal of 500,000 additional services sold in these nine countries to include: Checking Accounts, Savings and investments, loans, mortgages and Citigold priority banking will more than cover our initial investment until the economies of scales issues take effect and our credit card volume increases to over the one million mark. That's only 111,000 cards per country. The initial investment and initial loss absorbed in the beginning of this endeavor is well worth the future benefits and profits for Citibank in this emerging...