s of $162.65 (this accounts for various spending levels at different income levels).
At the one million customer level, profit performance is as
follows incremental costs accrue at 250,000 levels)
Additional economies of scale are realized when the one million customer threshold is reached; these improved costs result in an improved profit profile, as well:
The goal of the organization is to boost its revenues by approximately $30 million. Therefore, the company has the option of adding just more than one million customers in six markets, or just under one million customers in ten markets, or combinations thereof, with additional benefits realized as advertising costs remain constant and greater profit will be realized.
There is little doubt that Citibank can make a profit by introducing a credit card into the Asia Pacific region. What remains to be determined is the best strategy for implementing the credit card, in which countries, and using what positioning strategy.
Citibank has cited the fact that American Express has a large presence in the region as one of the reasons that the
Company has not actively entered this market. However, there is a critical difference between the American Express charge card and the Visa or MasterCard which would be offered by Citibank: American Express offers a charge card, which requires that the balance be paid every month. Citibank participates in the credit
card market, which means that consumers are able to manage their financial obligations by not paying the entire balance at one time. There are significant advantages to this type of card simply in terms of the flexibility that it offers.
When entering the credit card market, however, Citibank must also be aware of the Muslim population, which is growing in the region
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