Case Study: Citibank’s Indian Business Model

Promotional activities

Citibank engages in promotional activities in order to increase the market share. The promotional activities undertaken by Citibank in the year 2008-2009 are as follows:

1)‘Pran Jaye Par Vachan Na Jaye.’

Citibank  has launched a  viral marketing campaign  to promote its new online money transfer service to India Citi Online Remit. The campaign is showcased with  a viral video designed by Webchutney. This creative work is titled ‘Pran Jaye Par Vachan Na Jaye.’ The video shows that Citi Online Remit offers the ideal solution to the NRI to transfer money to India from the comfort of his home.

Citibank seems quite keen to capture the NRI market. It also has  a microsite for NRIs  which has NRI specific  services. It also has a link called NRI Zone which transfers you to Moneycontrol.com to a page with NRI specific content

2) ‘May the best man win  ’

Citibank  has come up with a sequel to its viral ad campaign in which it promotes its ‘Citibank Preferred NRI Account’. The feature is titled ‘May the best man win  ’. The ad showcases discounts and exclusive offers available for Citibank Preferred NRI Account users through selected brand partners: Avis, Airtel and Tanishq. This campaign highlights three paradigm changes taking place in the sphere of financial services marketing in India.

• Firstly, use viral advertising.
• Secondly, using of animation. In the recent past several financial services brands have resorted to animation/animated characters to stand out from the clutter. Namely,  Bajaj Allianz  (Super Agent) and  ICICI Bank  (Young Stars).
• Finally, the use of multiple languages in this campaign is certainly an innovative attempt at increasing reach and personalising the communication. The viral is published in 5 popular Indian languages

However, Citibank seems to be serious about targeting NRIs and its recent effort for ‘out of the idiot-box’ approach deserves some click

3) MTV and Citibank launched a joint credit card

Citibank  and MTV India have launched a joint credit card. According to  Atul Malik, director marketing (cards), Citibank India, it as a product for the ‘Young at Heart.’ Even the appearance of the card is very colourful and different from the regular cards. Citibank has tied up with 100 outlets in Mumbai covering book stalls, pubs, gyms, etc. which are like regular hangout points for the youth where they will get discounts which is an added attraction for the customer. Also looking around a bit we find that Citibank India has  an official facebook page  and also  a twitter account. Both have meager following and the basic information is advertisement for their new offers. A lot more can be done with both these platforms but alteast it is a start.

4) Citibank launched contactless payment Citi Tap and Pay along with a discounted offer to buy Nokia 6212

Launched in Bengaluru by  Citibank, Citi Tap and Pay is the latest next gen contactless experience being experimented in India. Citi Tap and Pay works on a cutting-edge new technology called NFC: Near Field Communication. NFC is a wireless communication technology that works on mobile phones, it allows data transfer between 2 NFC enabled devices, and even allows financial transactions like payments.

To use Tap and Pay:

• One must be a holder of a Citibank-issued MasterCard Credit Card in Bengaluru to be eligible to sign up for Citi Tap and Pay, subject to conformance with Citibank’s internally determined criteria for eligibility.
• One will need a Nokia 6212 handset with a Vodafone connection.
• One must have registered your Vodafone mobile phone number with Citibank to avail the Citi Tap and Pay facility.

A customer can get Nokia 6212 handset from select Nokia outlets at Bengaluru for a discounted price. He will be one of 3000 eligible Citibank customers to take part in an exciting programme, which is the first of its kind in the country. The customer will have to purchase a Nokia 6212 phone at a special price of Rs. 5,000 (against an MRP of Rs. 11,639) and use it at the specified retail stores to make payments for purchases on his Citibank Credit Card. Through a special cash back offer, the customer will be eligible for a cash back of Rs. 2,500, on making 6 purchases before October 31, 2009, and a cash back of Rs. 5,000, on making 12 purchases before October 31, 2009. He can then download his Citi Tap and Pay Credit Card onto the new Nokia 6212 phone. The Citi Tap and Pay personnel at the store will guide through this process. Citi has tied up with  Nokia,  Vodafone,  MasterCard,  ViVOtech  as partners to establish this mobile payments ecosystem in Bangalore

5) Citibank & Reliance Retail form Consumer Finance JV

Mukesh Ambani’s Reliance Retail and  Citibank  have inked an understanding to setup a JV for Consumer Finance. Citibank already runs a consumer finance company under the name Citifinancial. The initial focus of the 50:50 JV would be the 38lakh customers of Reliance Retail’s loyalty programme “Reliance One”. The JV will deal largely in loans and co-branded credit cards.

6) A credit card that doubles as a metro smart card in Delhi

Citibank India  and the  Delhi Metro Rail Corporation  (DMRC) announced the launch of India’s first co-branded, ‘2-in-1 €² transit credit card, the Delhi Metro Citibank credit card. The first of its kind in India, the card combines the benefits of a Metro smart card, with the advantages of a Citibank credit card. The Delhi Metro Citibank Credit Card is unique in several other ways, in the sense that reward points accumulated on this card can be redeemed for free Metro rides, at the Citibank point-of-sale terminals, which are presently installed at Rajeev Chowk, Kashmere Gate, Barakhamba, Pitampura, Rajouri Garden and Dwarka Mor Metro Stations. These are scheduled to soon spread across other stations as well. Additionally, the card offers double reward points for Metro spending, and will not require the mandatory security deposit of Rs50.

It is India’s first credit card that doubles as a contact-less access card for the Delhi Metro stations, allowing customers “tap and go” entry into DMRC stations. In 2006, Citibank had conducted trials of the ”tap-and-go” or contactless payment at select New York city subway stations, in association with MTA and MasterCard. Following the trials, the service was rolled out at the New York subway MTA. However, the DMRC co-brand card is associated with Visa.

Citi has successfully launched similar products in New York and Singapore, both of which have been extremely well received.

Credits:

Citibank has many credits to its account. They are as follows:

• Second largest foreign bank in India: Citibank India is a leading foreign retail bank in India. With the help of innovative product launches and superior customer service, it has emerged as the second largest foreign bank in the country (in terms of total assets). The bank had a market share of 22 per cent among the foreign banks in India. Citibank’s profits have grown at a CAGR of 28 per cent over the last 5 years. At 1.2 per cent, Citibank has one of the lowest non-performing assets in the Indian banking industry.
• Leading issuer of credit cards in the country: Citibank was the first to launch credit cards in India and today has the largest card member base of 2.3 million customers. Constant product innovation has led Citibank to launch the industry’s first co-branded and affinity cards with leading organizations. Presently, Citibank has over 7.5 lakh co-branded card members. In 2003, Citibank had a market share of 35 per cent in terms of spending.

Key Milestones of Citigroup:

• Mortgage Services: Citibank was the first to launch Home Credit (in 1990), a facility to utilize surplus funds to save interest and PAM (Preserved Asset Mortgage), a 100 per cent home loan with security in equity, mutual funds, etc.
• Auto Loans: Citibank pioneered organized auto financing in India in August 1986.
• Personal Loans: Citibank entered this business in 1989 and is considered a pioneer in this segment with a healthy market share of 24 per cent with expansion through various innovative products.
• Internet Banking: Citibank also provided India’s first and most comprehensive Internet Banking service covering both resident and NRI customers, with a ‘single-glance statement’ enabling customers to get complete information on all their banking relationships. The bank has enabled Internet banking for corporate as well as individual customers.
• Citibank was the largest mobilizer of funds by non—public sector bank (second after the State Bank of India) for the Resurgent India Bonds (RIB) 1998 and the India Millennium Deposit (IMD), 2000 sourcing US$ 830 million and US$ 840 million respectively.