Alpen Bank Case Memo
Alpen Bank:
Launching the Credit Card in Romania
Case Study Solution
By Liqi Zhou
Nov. 5th, 2014
To: Gregory Carle
From: Liqi Zhou
Re: Alpen Bank’s decision of launching credit cards in Romania
Date: Nov. 5th, 2014
Purpose: The Romania market has huge and increasing profit for credit cards, so Alpen Bank should enter it ASAP.
Preview: Alpen Bank should launch the credit card now to both middle-class and affluent segments of the market using all possible consumer acquisition methods to capture the profits and gain middle tier consumers.
Analysis: Right now most of Alpen Bank’s consumers are in the affluent class in Romania and it is obvious that those rich people are the perfect potential target of credit cards because they are career-oriented, seeking services matching their status, less price-sensitive, having greater usage frequency, etc. Mangers may have concerns about the middle-class customers, however we should still reach out to those potential Alpen Bank customers because they may become affluent and “stick” to Alpen’s brand. In addition, according to Exhibit 4, losing those consumers means leaving great amount of money on the table. When we decided to launch the credit card, we have better to use all the methods to acquire consumers. Even though direct mail is more expensive, it reaches the biggest number of consumers contributing to about 3/8 of total consumers. And if we compare Exhibit 1&2, we will find that we will lose a lot of consumers by ignoring middle-class. From exhibit 4, we can calculate and find out that the breakeven number of the market combining middle-class and affluent class is 90938. It is achievable in only one year if we use all the methods according to Exhibit 1. To conclude, launching credit card to Romanian market is profitable for Alpen Bank. Though the launching campaign is expensive to some extent but definitely worth a trial. In addition, the launching plan will also attract many middle-class consumers in an
Launching the Credit Card in Romania
Case Study Solution
By Liqi Zhou
Nov. 5th, 2014
To: Gregory Carle
From: Liqi Zhou
Re: Alpen Bank’s decision of launching credit cards in Romania
Date: Nov. 5th, 2014
Purpose: The Romania market has huge and increasing profit for credit cards, so Alpen Bank should enter it ASAP.
Preview: Alpen Bank should launch the credit card now to both middle-class and affluent segments of the market using all possible consumer acquisition methods to capture the profits and gain middle tier consumers.
Analysis: Right now most of Alpen Bank’s consumers are in the affluent class in Romania and it is obvious that those rich people are the perfect potential target of credit cards because they are career-oriented, seeking services matching their status, less price-sensitive, having greater usage frequency, etc. Mangers may have concerns about the middle-class customers, however we should still reach out to those potential Alpen Bank customers because they may become affluent and “stick” to Alpen’s brand. In addition, according to Exhibit 4, losing those consumers means leaving great amount of money on the table. When we decided to launch the credit card, we have better to use all the methods to acquire consumers. Even though direct mail is more expensive, it reaches the biggest number of consumers contributing to about 3/8 of total consumers. And if we compare Exhibit 1&2, we will find that we will lose a lot of consumers by ignoring middle-class. From exhibit 4, we can calculate and find out that the breakeven number of the market combining middle-class and affluent class is 90938. It is achievable in only one year if we use all the methods according to Exhibit 1. To conclude, launching credit card to Romanian market is profitable for Alpen Bank. Though the launching campaign is expensive to some extent but definitely worth a trial. In addition, the launching plan will also attract many middle-class consumers in an