Citi Bank India Credit Cards: Strategy for Profitable Growth
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 may be worthwhile. To begin by surveying the landscape, a 5C analysis is
shown below:
Company
o Historically an innovative leader in the industry, but currently restricts itself to
servicing the super-affluent/affluent in India's largest 8 metropolitan areas.
o A strong brand, seen as offering an aspirational product and service, can be
leveraged to drive differentiation
o Losing market share from 30% to 22% despite good performance in the existing
segment (topline doubled) over the past 5 years, need to reassess market
o Need to address "profitable growth" and "efficiency factor" besides mere
revenue growth going forward
Customer
o Since the global financial crisis, Indian credit card users have become more
prudent, carrying less of an outstanding balance on their cards and focusing
more on value, meaning credit-loss provisions could be reduced, making lower-
segment interest fees more compelling
o Customers can be divided into "transactors" and "revolvers" - the former pay
their entire balance off every month, thus incurring no interest, while the latter
carry some balance in their account. The latter provides critical interest fees
o Consumers increasingly have multiple cards - a
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 may be worthwhile. To begin by surveying the landscape, a 5C analysis is
shown below:
Company
o Historically an innovative leader in the industry, but currently restricts itself to
servicing the super-affluent/affluent in India's largest 8 metropolitan areas.
o A strong brand, seen as offering an aspirational product and service, can be
leveraged to drive differentiation
o Losing market share from 30% to 22% despite good performance in the existing
segment (topline doubled) over the past 5 years, need to reassess market
o Need to address "profitable growth" and "efficiency factor" besides mere
revenue growth going forward
Customer
o Since the global financial crisis, Indian credit card users have become more
prudent, carrying less of an outstanding balance on their cards and focusing
more on value, meaning credit-loss provisions could be reduced, making lower-
segment interest fees more compelling
o Customers can be divided into "transactors" and "revolvers" - the former pay
their entire balance off every month, thus incurring no interest, while the latter
carry some balance in their account. The latter provides critical interest fees
o Consumers increasingly have multiple cards - a