Citybank market Entry

            Citibank, the principal operating subsidiary of Citicorp, was one of the leading financial institution in the world. The Bank was founded in 1812, under the name Citibank of New York, in New York City, USA. Citibank had operated in Indonesia since 1968, when Indonesian Government allowed 8 foreign banks to set up operations in Jakarta.
            Citibank had operated in Indonesia since 1968, when the Indonesian Government allowed eight foreign banks to et up operations in Jakarta. In 1987, Citibank was the largest foreign bank in Indonesia, with an asset base of US$578 million and a substantial commercial and retail clientele, both domestic and international. It had grown from a one office operation of 16 employees in 1968, to two offices and 450 employees pada tahun 1988.
            Citibank Indonesia conducted four separate activities : (1) investment banking (providing investment and merchant banking banking, securities trading and brokerage, foreign exchange and money market activities, investment management, venture capital, and securities trust, for large corporations); (2) Institutional Banking (providing worldwide corporate banking and custodial services for large corporations); Individual Banking (providing a full range of financial services to individual consumers, e.g. transactions, deposits, and loans); and (4) Private Banking (providing the same service as Individual Banking, but exclusively for customer who maintained a time deposit of at least US$1 million).
            Citibank had more than 800 Insitutional Banking customers and more than 3.000 Individual Banking customers. It offered a wide range of banking services and provided ready access to global capital markets. While its business was still largerly commercial. Its Individual Banking, which served an expanding middle class, had recently been growing considerably faster than the bank as a whole.

To entry the market, Citibank had to decide on what strategy was best to launch and market The Citibank Visa Card.  There are some problems that Citibank was faced for the purpose of launching The Citibank Visa Card. Those problems are :
-          Which segment it wanted to serve
-          How to position the Citibank Visa Card
-          What was the suitable market entry strategy

Theoritical Backround
-          Target marketing requires marketers to take three major steps:
1.      identify and profile distinct groups of buyers who differ in their needs and preferences (market segmentation)
2.      select one or more market segment to enter (market targeting)
3.      For each target segment, establish and communicate the key distinctive benefits of the company’s market offering (market positioning)
-          The marketing process consist of analyzing marketing opportunities, researching and selecting target markets, designing marketing strategies, planning marketing programs  and managing the marketing effort
-          Strategy is a game plan for getting goal that indicates what a business unit wants to achieve. Michael Porter has proposed three generic strategies that provide a good starting point for strategic thinking: overall cost leadership, differentiation and focus.
-          Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market
-          the population of Indonesia is so big, about 173 million in 1988,
-          Amex is the first company introduced transactional credit card. There were 5 company issued credit card. Citibank major competitor for visa card was Bank Duta
-          Established card issuers had possessed their own brand identification, customer loyalties, and brand positioning.
-          The existing players in the card industry had built brand identification through aggressive advertising and promotion
-          Customer loyalty had been strong (retention rate 93-95%).
-          Indonesia was still largery a cash society
-          Only operating in Jakarta (Indonesian government regulation)
-          Citibank was the largest foreign bank in Indonesia
-          Citibank have new marketing Director, Ms Enny Hardjanto who had marketing skills and experience.
-          To enter the card industry, capital,financial and human was needed for set up costs, computers, telecommunication facilities, employee training, and other infrastructure
-          Transactional card were perceived as a measure of high social status or prestige
-          There were certain requirements to be fulfilled to become a cardholder
-          Limited budget promotion

I. STP (Segmenting Targeting and Positioning)
Based on the marketing research, we conclude the Citibank segment:
Table 1
Citibanks Segment
- age
25 – 30
- gender
Male and female
- income
Rp 850.000
- occupation
Business people
- education
- social class
Middle and high class
- user status
Current and potential customer
- loyalty
Current customer : high

Table 2
Citibanks Potential Customer
Upper Class Jakarta
Credit Card Users
Frequent overseas travelers
International Magazine readers
Top executives
Chinese community
Professional women
Returned overseas graduates
Luxury cosmetic users
Expatriates diplomats

After doing segmenting and targeting, the next step is positioning that construct the different position in the  customer heart.
Based on the exhibit 13 and 14 it can see that the  potential customer target of Citybank is the high level of citizen that have the eksclusive style, so that Citybank can make position of its product as the credit card that describe the excecutive lifestyle. So each step of positioning is important.
1.     User positioning
Based on that condition above, Citybank preffer use the “user positioning type” in the positioning strategy. User positioning makes the card different from the others, this card looks more eksclusive because its strategy only target the upper class or excecutive people. This condition will build the eksclusive style of the citizen.
Berdasarkan hal tersebut maka di dalam melakukan positioning Citibank lebih baik menggunakan tipe user positioning. User positioning memposisikan produk sebagai yang terbaik bagi sejumlah kelompok pemakai. Dalam hal ini Citibank memposisikan untuk cardholder yang menginginkan eksklusivitas. Dimana dengan melakukan user positioning ini maka Citibank memfokuskan strategi positioningnya terfokus kepada upper class, sehingga akan dapat lebih memfokuskan kepada membangun citra eksklusif.
2.     Differentiation
Differentiation is the process of adding a set of meaningful and valued differences to distinguish the company’s offering from competitors offering. Based on the fiturs and the other requirement, there are’nt significant differentiation among the card as the products of Citybank. So citybank must make differentiation among their product to different their class, so the customer can choose the product as they want based on their prefferent. The Requirement that have to fulfil to differentiation that product are:
-          Important : The differentiation is able to give the high advantage for the customer.
-          Distinctive : The differentiation is offering with the special event and different way
-          Compete : The differentiation  is better than another way to get the benefit.
-          Differ : The distinctive is hard to copy.
-          Advantage : The company will able to get the benefit from lounching thet differentiation.
The distinctive that the Citybank can make among their product in order to make their differentiation succes are :
Differensiasi adalah tindakan merancang serangkaian perbedaan yang berarti untuk membedakan tawaran perusahaan dengan tawaran pesaing. Berdasarkan fitur-fitur dan syarat-syarat lainnya sepertinya tidak ada perbedaan yang bisa ditimbulkan oleh Citibank sehingga citibank visanya dapat didifferensiasikan. Sebenarnya semua produk dapat didifferensiasikan sampai tingkat tertentu. Tetapi tidak semua perbedaan merk itu berarti atau berharga. Kriteria-kriteria yang harus dipenuhi supaya suatu produk dapat didifferensiasi adalah :
  • Important: That difference provides a high-value benefit to a significant number of buyers.
  • Distinctive: The difference is offered in a special way.
  • Excellent: That difference is superior to other ways to get certain benefits.
  • Owned by one party: The difference is not easily imitated by others.
  • Affordable: Buyers can afford the difference.
  • Profitable: The company will make a profit by introducing that difference.
Some of the differences that Citibank can make so that its positioning can be successful are:

Form : Citybank can launch the distinctive card form from their competitor, for example the card is designed to be more samall and compact, it will reflected the exclusive style.
Fitur : Citybank can add the facility that make the card better then their competitor’s product. Such as:
-          Extra free news letter
-          Work with hotel and restaurant to give more service such as discount, ect.
-          Airport Lounge for the card holder in the big airport in Indonesia, included service for traveling insurance and lost baggage.
Style : To describe the distinctive appearance, Citybank can design their card with add the photo
Shape: Citibank can issue a different form of card from its competitors, for example, made smaller, so that it creates a more exclusive impression.

1. Features: Citibank can add facilities not provided by other credit cards such as:

· Provide a free news letter (this will already be done by Citibank)

· Collaborates with hotels and restaurants to provide discounts

· Airport Lounge convenience for cardholders in several airports in Indonesia. Provides not only accident insurance while traveling and lost luggage, but other insurance such as goods damage insurance.

2. Style: To better illustrate the difference in appearance, Citibank can design the card by adding a cardholder photo or pseudonym, so that the cardholder feels more exclusive.


To further provide convenience to its customers, so that it can provide differentiation, in terms of Citibank services can take the following steps;

Increasing the number of merchants to exceed its competitors, especially in places that are exclusive so that potential customers will be more interested
Simplify the method of payment by cooperating with outsourcers, as currently known Citibank only has two branches, which will certainly cause difficulties (require time) when making payments both from customers and merchants.
Positioning done by providing some differentiation as above will not work or reach the minds of potential customers if communication is not carried out. Based on data in Exhibits 16 and 17, that the communication tool that will be used by Citibank to create the brand awareness stage up to the purchase stage is advertising with alternative media. However, Citibank faces limited budget constraints to communicate its positioning.

After the position is formed, the next step that must be taken by Citybank is to communicate it effectively.

Given the limited amount of budget and there are also two categories of potential prospective customers, namely old customers (captive market) who already have a good image and service and new customers who do not know anything about Citibank, Citibank must choose and plan the right communication tool.

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