Citigroup




Ben Perry, Hanne Hoyer, and Jon Iafrati
        Final Marketing Paper
              BUSA 308
         Dr. Me...
Citigroup

       Most corporations use a clearly defined and articulated mission statement to provide

guidance and direc...
the situation, the shared responsibilities, was as much an attempt to redirect the company’s

conduct as it was an attempt...
was founded in 1922, merged with City Bank of New York. By 1929 the company had managed

to become the largest commercial ...
Global Wealth Management, Citigroup’s second major business group, manages private

investments from their clients and res...
the balance kept in the account. Like the checking opportunities, savings also encourages their

customer to maintain pref...
factors. The Citi mtvU Platinum Select rewards students when they pay their bills on time, the

Citi Bronze AAdvantage Car...
use, and offers both fixed and variable rate loans (citi.com). With this product, Citi is trying to

target the homeowner ...
The purpose of this product is two fold: to protect against bouncing checks, and to encourage

greater amounts of spending...
realizing the uncontrollable change in their external marketing environment and is starting to

react as quickly as possib...
Citigroup is present in 100 countries world wide, while Citibank currently is located in 70

countries (Annual Report, 13)...
Being the largest financial corporation in the world, Citibank needs to stay alert and keep

a close watch on their compet...
The bank tellers and cashiers are the representatives of Citibank. Without a professional,

service oriented friendly team...
group counts for over half of the total households in America today. They are also going through

an economical change tha...
hard worker an opportunity to get withdraw or deposit cash with out a fee from even more

locations and in a convenient ar...
Citibank explains that their product is so good that even an eastern European thinks it is a good

deal.


Public Relation...
Citibank through years of being a head of issues that are important to many of their customers.

To create a better world ...
must use a promotional code also available online. These offers are time sensitive and allow

Citibank to track the use an...
Product Life Cycle


       In examining the position of Citibank in the product lifecycle, it is important to analyze

it...
Domestic Product Life Cycle

                      Introductory    Growth      Maturity         Decline
                  ...
share price (which is one of the aspects of importance emphasized in Citi’s three shared

responsibilities), but it also c...
Works Cited


Bank of America, (2006) Retrieved December 3, 2006, from http://www.bankofamerica.com

Bauerlein, V., Riley,...
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  1. 1. Citigroup Ben Perry, Hanne Hoyer, and Jon Iafrati Final Marketing Paper BUSA 308 Dr. Merlin Simpson 12/12/06
  2. 2. Citigroup Most corporations use a clearly defined and articulated mission statement to provide guidance and direction for their future growth. The mission statement allows for the visions of company leaders and the strategies necessary for the achievement of those visions to come together and become a coherent source of direction for the company and its employees. Citigroup is unique in that it has no formal or structured mission statement. Rather, the company receives its direction and sense of purpose from what Citigroup has deemed their Three Shared Responsibilities. These include: A responsibility to Our Clients, to Each Other, and to Our Franchise. These three shared responsibilities supplement a formal mission statement, and serve as the core focus for all actions of the company. Citigroup’s first shared responsibility is to “Our Clients,” which stresses the importance of a continued healthy and successful relationship with their clients. Citi recognizes that their clients are the most crucial aspect to their business and should be treated as such. Furthermore, elaborating under this shared responsibility, Citigroup states that they must “always act with the highest level of integrity.” This clause can be seen as not only the direct result of several ethical issues Citigroup faced in the early 2000’s, but also as the main reason for the creation of Citigroup’s shared responsibilities (Annual Report, 1). In early 2005, Chuck Prince, Citigroup’s Chairman and CEO, along with other executives in the company constructed Citigroup’s Shared Responsibilities to serve as new guidance for the company’s conduct. As previously mentioned, during the early portion of the current decade, Citigroup faced several ethical issues that arose from involvement in the financial actions of corporations such as Enron and WorldCom. As such, Citigroup’s public image was significantly tarnished, and the company as a whole lost a great deal of public trust. Citigroup’s solution to
  3. 3. the situation, the shared responsibilities, was as much an attempt to redirect the company’s conduct as it was an attempt at improving their public image (Datamonitor, 10). Citigroup’s second shared responsibility is to “Each Other.” Here Citi emphasizes the respect and care they corporation displays towards its employees. The foundation of this responsibility can best be summed up in the following sentence: “We must provide outstanding people the best opportunity to realize their potential.” Citigroup’s commitment to its employees has been proven time and time again through continuously placing second in most favored company among MBAs, as measured by Fortune magazine. Citi’s emphasis on employee development is a crucial component of the company’s success and has resulted in many talented Citigroup employees leading highly distinguished careers (Annual Report, 1). Citigroup’s third and final shared responsibility is to “Our Franchise.” Citi defines this responsibility as being aware of and placing first the corporation’s long-term interests. Whether this consists of increasing shareholder value or the preservation of the environment, Citigroup stresses the importance of having a long-run orientation. This commitment to long term growth can be seen not only in Citigroup’s continual growth in shareholder value, but also through the numerous awards and recognition they have received for their active role in environmental sustainability (Annual Report, 1). For Citigroup, their Shared Responsibilities list serves as their mission statement. It provides Citigroup with a purpose for its businesses, a direction for future growth, and defines the actions it needs to take in order to achieve its long-term goals. Company History Nearly two hundred years ago, Samuel Osgood was elected president of the newly formed City Bank of New York. Short after, Farmers' Fire Insurance and Loan Company which
  4. 4. was founded in 1922, merged with City Bank of New York. By 1929 the company had managed to become the largest commercial bank in the world and would go on to be the first bank in New York City to offer consumer checking accounts with no minimum-balance requirement. In 1964 and 1965 the company entered the leasing and credit card business and in 1995 the bank changed its name to the First National City Bank of New York. In 1967 The First National City Bank became Citibank National Association, and in 1992 became the world’s largest bank. However, not until October 8, 1998 did Citicorp and Travelers Group divisions merge to become Citigroup Inc. Company Overview Citigroup consists of three major business groups that create the plethora of products and services they offer. They include Corporate and Investment Banking, Global Wealth Management, and Global Consumer Services. These groups can be furthered classified by the variety and form of the products or services they offer. Corporate and Investment Banking, for example, attempts to “create solutions for and provide the broadest possible capital and market access to thousands of issuer and investor clients” through the use of Global Banking, Global Capital Markets, and Transaction Services. Citigroup’s Global Banking services are responsible for advising corporations, financial institutions and government agencies regarding countless issues from acquisitions and loans to cash management and structuring. Citigroup’s Global Capital Markets comprise of their ability to provide global trading for corporate, institutional, and investor retailers. Finally, the Transaction Services offered by Citigroup are merely financial related services that range from trade management to agency trust services.
  5. 5. Global Wealth Management, Citigroup’s second major business group, manages private investments from their clients and research of the ever changing environment of their industry and market. To accomplish this, Citigroup has created three branches of their Global Wealth Management Services. They are Citigroup Private Bank, Smith Barney their private financial planning and advisory provider, and the Citigroup Investment Research team. Supported with well over 300 analysts, Citigroup can provide macro and quantitative analyses of global markets and market trends to their investors and clients of Smith Barney (Datamonitor, 9). Due to the shear enormity of Citigroup, we have found it in our best interest to focus our efforts on the third and final major business group of Citigroup; Global Consumer Services offered by Citigroup, specifically those offered by Citibank within the United States. These services include banking, card services, and loans and mortgages. As will soon be discussed, the target market strategy for Citigroup is directly related to the product or service offered and the social trends of that market. Target Market Strategy Banking Consumer banking can be categorized into three sub categories; savings, checking, and college savings. All three sub categories can be accessed by the consumer online as well as through personal contact, in any of the organizations 1700 locations, or over the phone. There are six different checking accounts to fit the different lifestyle of their customers. Checking accounts offer different interests rates and require the customer to have a certain above average balance in their account. This gives most consumers the opportunity to open an almost tailored checking account that will fit his or her needs. Citibank also offers five different options for a savings account. There is a distinct difference between them all in regards to the earned interest rate and
  6. 6. the balance kept in the account. Like the checking opportunities, savings also encourages their customer to maintain preferably large amount of capital in savings. Lastly, Citibank offers College savings oriented towards college students even though it is closely related to the offered savings accounts. A college savings account allows parents to deposit money in the name of their child from birth until college. Credit Card Services Similarly, Citibank’s card services have three sub categories, they include college cards, value cards, and rewards cards. Citigroup offers an array of different college credit cards, which are marketed to all college students, and more specifically, college students with the means to drive and or travel by plane. The cards offered are the Citi Dividend Platinum Select, Citi Platinum Select, Citi mtvU Platinum Select, Citi Bronze AAdvantage Card, and Citi Drivers Edge (citi.com). Excluding the three ladder, college cards offered by Citibank are for the majority identical in terms of what they offer. They include a 0.0% APR on Cash Advances for 6 months (6 months less than value and rewards cards), a free Citi Photocard option which is applicable to nearly every card offered by Citibank, and a standard purchase APR at 18.24%. (4% higher than reward cards and 7% higher than value cards) It would appear that Citibank views college students as riskier customers, and is attempting to use segmentation to lower Citibank’s risk of providing these students with card services (Hair, 224). Oddly enough, college students that choose value cards rather than college cards will actually receive a better deal that they would not have gotten otherwise from college cards. In addition to the “benefits” list above, Citi mtvU Platinum Select, Citi Bronze AAdvantage Card, and Citi Drivers Edge attempt to further segment the college student market through several
  7. 7. factors. The Citi mtvU Platinum Select rewards students when they pay their bills on time, the Citi Bronze AAdvantage Card allows customers to earn points for air travel, and the Citi Drivers Edge makes it possible for customers to earn bonus points for driving. Value cards offered by Citibank are the most popular cards used by their customers. The cards offer a low 11.24% APR and are promoted as excellent choices for consumers who want to build their credit rating (citi.com). There are no bells or whistles to the packages offered by Citibank and represent their standard card services package. Conversely, Citibank’s reward cards boast slighter higher APR of 14.24%, but are not nearly as high as college cards. Rewards cards are marketed towards consumers who desire buying power and enjoy earning countless bonus points and rebates for their purchases. Citibank’s reward credit cards also offer various benefits that can be redeemed from Thank You Points earned from purchases. In turn, customers can convert these points to earn frequent flyer miles that go toward free air travel on American Airlines and others airlines that are aligned with the company (citi.com). Loans and Mortgages Finally, the third service offered by Citigroup under their Global Consumer branch is their loans and mortgages. With over 2,400 consumer finance offices in the U.S., Citibank is able to offer loan and mortgage services to a large market (Datamonitor, 5). Analogous to Citigroup’s other major business divisions, Citigroup divides its consumer loans division into four main segments: Home Equity Lines and Loans, Mortgages, Personal Lines & Loans, and Student Loans. Citi’s Home Equity Lines and Loans products give consumers the opportunity to take out a loan against the equity on their home. As advertised on Citibank’s website, a Citi home equity line of credit allows the consumer to pay interest only on the money they actually
  8. 8. use, and offers both fixed and variable rate loans (citi.com). With this product, Citi is trying to target the homeowner who has spent many years building up the equity of their home. Citi suggests that the possibilities of usage for such a loan can stem from home improvement to landscaping to a Caribbean cruise. This suggests that for this particular product, Citi is targeting an older, more financially established and stable market of consumers. The second sub-category of loans Citibank offers is home mortgages. As with the home equity loan, mortgages offered by Citi are available in both fixed and adjustable rates. However, unlike the home equity loan, Citi’s target market for their mortgage products include more than just older, current home owners. Citibank advertises their ability to craft a mortgage to fit the needs of any potential consumer. With their fixed rate mortgages, Citi offers both 15 and 30 year loans. Citibank also offers adjustable rate mortgages that adjust rates every 1 or 5 years, depending on customer preference (citi.com). Additionally, Citibank offers a rewards program for taking out a home mortgage with them. For every month a customer has a mortgage with Citibank, they receive a set amount of Thank You Points, which are redeemable for a wide array of products and vacations (citi.com). However, these Thank You Points are not without a catch; in order to be eligible for these points the customer has to have a checking or savings account with Citibank. In doing so, Citibank is able to cross-promote two of their products with the same sales promotion, and target two different markets which may have not otherwise been inclined to do business with Citibank. The third arm of Citibank’s loans business is their Personal Lines and Loans segment. Within the subsection of personal loans, Citibank offers two distinct products. First, Citi markets what they call Checking Plus. Checking Plus is essentially a revolving line of credit attached to a checking account that helps a consumer protect themselves from overdraft accidents (citi.com).
  9. 9. The purpose of this product is two fold: to protect against bouncing checks, and to encourage greater amounts of spending among consumers. Second, Citibank offers personal loans which allow a customer to borrow up to $25,000. These loans are intended for the purposes of buying new household appliances, purchasing a new car, or paying for a vacation. These loans offer flexible repayment terms, fixed monthly payments, and are unsecured (citi.com). With rates as low as 10.05% APR, Citibank is attempting to target a middle to upper class market with this type of personal loan. Finally, Citibank offers a student loan product line to help customers pay for education. Within the student loans product line, Citibank offers three different products: Federal Stafford Loans, Graduate Federal PLUS Loans, and Parent Federal PLUS Loans (citi.com). All three offer competitively low interest rates, flexible repayment plans, and interest rate reductions of 1 to 2.25%. Citibank markets their student loans to a wide target markets, ranging from K-12 through graduate school. In doing so, Citi is able to provide a wide array of student loan products, conducive to the differentiated needs of its customers. Social Change and Technology As Y-Gen's become more prominent in today’s workforce a shift in emphasis to online banking and resources is beginning to become noticeable. This shift is not only noticeable within today’s society, but can be inferred by the promotion and implementation of Citibank’s marketing strategy. Recently, Citibank reached the 5,550 mark for their bank tellers in 7-elven stores, and are heavily promoting their exceptional online banking services when you browse their website for loans and mortgages, banking, and credit card services. The company is
  10. 10. realizing the uncontrollable change in their external marketing environment and is starting to react as quickly as possible to capture profits in this growing market. SWOT Analysis of Citigroup and Citibank US Citibank is a major financial service organization; they are subsidiaries of City Group and able to benefit from the strengths of Citigroup by brand affiliation and financial superiority. Although Citibank is so fortunate considering their strengths and opportunities, they also have to deal with weaknesses and threats. To better understand the organization we have analyzed Citigroup with help of a SWOT analysis. Although the matrix is developed over Citigroup we have compared Citibank to Citigroup Strength Opportunity • Biggest and most profitable • Ability to create a new market in financial service organization in the (developing) countries world (2005) • Potential growth in international • Global presence (100 countries/ 100 market share years) • Broad product line Weakness Threat • Chairman recently retired • Increased Domestic and • Increase in interest rate International Competition Strengths The strengths of the company are mainly focused on internal stability and global presence. Being the largest financial sector in the world Citigroup has an enormous advantage in any discipline they take part of. Citibank are able to follow along in the footsteps and they take advantage of the well known brand Citigroup has created world wide as well as in the US.
  11. 11. Citigroup is present in 100 countries world wide, while Citibank currently is located in 70 countries (Annual Report, 13). The makes them the strongest and best recognized financial organization in the world, and gives Citibank the ability to attract domestic customers with an international background. The broad product line allows customers to have a one-stop-shopping experience for all their banking needs. This is an important factor in today’s busy consumer lifestyle. Opportunities Both Citigroup and Citibank benefit from being a multinational corporation and having represented in multiple countries. As mentioned before Citigroup is present in 100 countries world wide, while Citibank currently is located in 70 countries (Datamonitor, 6). This is a great opportunity to spread the risk of a decreasing market. It is also an opportunity to enter even more regions and develop more opportunities for growth. Weaknesses The current chairman of Citigroup, Sandy Weill recently retired and this has undoubtedly affected Citigroup’s stock price, along with trust in the company, and will continue to be a burden until the new chairman has proven his ability to run the company. Citibank has a stable board, but will still experience the effects of the change in Citigroup. The US economy has recently moved into a less increasing moment in time. With the rise of interest rates, consumers have less money to spend and will also be more reluctant to take out loans or use credit cards. Rising interest rates are not only a weakness for Citibank but for all financial institutes. Threats
  12. 12. Being the largest financial corporation in the world, Citibank needs to stay alert and keep a close watch on their competitors. Among them is Bank of America, the second largest financial service organization in the country. Bank of America follows and often copies Citibank’s tactics. This is one reason why Citibank needs to further develop their products to stay in growth on the product life cycle. Bank of America has currently succeeded in a merge with MBNA and is now growing with an even stronger rate. Marketing Mix Citibank uses a marketing mix to determine and value the components they use to improve their service offering. Citibank uses a unique blend of seven activities to serve their customers better. This blend contains of: product, people, process, presentation, price, place, and promotion. The last mentioned promotion also contains; advertising, public relations, and sales promotion. Product As mentioned earlier, Citibank offers a variety of services: banking, mortgage solutions loans, investment services, and international banking to mention a few. By having a broad product line Citibank is able to attract a broad consumer group and can satisfy the financial needs and wants of most of their customers. The product line is also used to attract new customers who might not fit into their current banking solution. People
  13. 13. The bank tellers and cashiers are the representatives of Citibank. Without a professional, service oriented friendly team Citibank will not be able to live up to the product they sell. An organization can spend a lot of money on advertising, public relations, personal selling and promotion offers, but in the end the employees are the ones delivering the service. In the banking industry credibility is a very important concept. After all, they are handling the second most important possession, after family, their finances. Some financial institutes are saying goodbye to one-on-one service and instead relying heavily on the internet and automated phone messages. Process Citibank offers a large variety of sources for their customers to reach the offered products. They have a large amount of outlets and are able to attract costumers all over the United States. As a recent, more popular tool, Citi uses online banking, where the consumer can sit at home and with their personal computer transfer money or pay bills. Citibank has also recently adopted alternative outlets in the shape of cash machines in convenient stores. This allows busy customers to make transactions after office hours. The last processing service Citibank offers to their customer is phone servicing. Like most modern service organization, phone contact is a tool that most customers take for granted. Today more people have access to a telephone then the internet and even opportunity to transport themselves by car. Presentation The reason Citibank has a large product line is so they can attract a broad customer group. Citibank caters to the largest customer group in the United States; the middle class. This
  14. 14. group counts for over half of the total households in America today. They are also going through an economical change thanks to rising disposable income. This means that Citibank has an opportunity to provide even more service to existing customers and new adapted services to new customers. Because of rising disposable income Citibank also caters to the lower working class, since they are the potential new middle class. To attract the middle and lower class, Citibank presents their products in a variety of ways to reach the entire spectrum. Among them are their broad product line and their broad delivery process. Price Citibank uses a competitive pricing strategy. Compared to Bank of America, Citibank competes with other financial organizations to attract the most consumers by offering the most comparable rates. These rates are included in all of their products; banking, checking and savings, credit cards, loan and mortgages. The pricing strategy that Citibank uses is important for their overall product line. It is easy for a customer to change to a new financial institute if the current isn’t comparable to the rest of the market. Place Citibank is present throughout the entire world, a claim not many financial institutes can make. In fact Citibank has been present in over 100 countries for more100 years (Datamonitor, 6). This is an important claim for customers who travel because it ensures them that they will get the same service in India as they do in Indiana. In the United States they have several outlets located in populated as well as rural areas. As part of reaching the working class Citibank has implemented 5500 new cash machines in 7-elevens across the country. This gives the average
  15. 15. hard worker an opportunity to get withdraw or deposit cash with out a fee from even more locations and in a convenient area. As mentioned earlier Citibank has 1700 branch stores in the United States, which are open during normal business hours and are places where customers can take care of all their financial needs (Datamonitor, 5). Citibank also uses drive through windows for customers who can handle their transactions from the convenience of their own vehicle. In this time of rapidly changing technology it is worth mentioning the advanced online banking service Citibank offers its customers. Their website allows consumers to log on to their accounts and handle all their business from the comfort of their home, work, or on the road when ever there is an internet connection. Promotion In the promotion strategy Citibank includes a variety of tactics to attract new customers as well as maintain new ones. They use advertising, public relations and sales promotion. Citibank uses a professional promotional firm to develop their main campaigns; however they do handle many of their public relations entities from their corporate headquarters. Advertising Citibank spent 1.8 billion dollars on their advertising campaign in 2005 (Annual Report, 41). This was almost the exact amount spent by their largest consumer banking competitor, Bank of America (bankofamerica.com). The campaign contained constantly changing TV advertising spots with a story advertising the credit card option. The characters are of stereotypical eastern European decent; this is to show the consumers that the product is a valid “good deal” with extras benefits such as frequent flyer points. By using east Europeans to represent the customers,
  16. 16. Citibank explains that their product is so good that even an eastern European thinks it is a good deal. Public Relations Citibank spends an enormous amount of resources to maintain and further develop a positive perception of Citibank. Because of their close link with Citigroup, Citibank can already harvest an enormous amount of brand equity. This is both good and bad; it is good when the entire group is doing well and bad if Citigroup is involved in any kind of crisis. If a crisis appears Citibank must distance itself from whichever sector of Citigroup is in trouble in order to maintain a positive perception. This is one reason why Citibank has developed a crisis management tactic. According to Citigroup, the best way to avoid crises is to prevent them. One way Citibank avoids crises is through their Corporate Social Responsibility program (citigroup.com). This program is designed to connect the different entities of public relations, community outreach, and are tools used to improve the internal and external environment of Citibank. The organization uses several different methods, however in this paper we are only touching on the most significant and important sub groups of the Corporate Social Responsibility program. Citibank has developed a financial education program for young members of their local community. This program educates young people, for no charge, about how to handle financial responsibility, in regards to loans, credit cards and savings (citigroup.com). The program has been designed by Citibank and is offered through its local branches. Citibank was one of the first financial institutes to address the problem with our degrading environement. They created an environmental affairs program and started a dialogue with the help of different NGOs (non governmental organizations). This program has lead
  17. 17. Citibank through years of being a head of issues that are important to many of their customers. To create a better world in the United States and internationally, Citibank has, together with Citigroup as a whole, adopted a new concept called microfinancing (Weir, B7). This is a program that, with the help of investors, allows less fortunate members of our society to take out loans and apply for grants to, for example, get started with a new business. What sets microfinance apart from ordinary loans is the joint liability. The liability is sometimes shared between groups of individuals and sometimes shared with the bank. The last component we will mention is part of the internal environment. Citibank has many employees working for them, many have children and to avoid loosing great employees because of problems with child care, Citibank has created a child care opportunity for employees (citigroup.com). Citibank has set up a few child care centers in special needs areas with a guarantee arrangement with its employees. They also offer discounts and subsidies for specific child care in area if they don’t offer their own child care centers. This program has helped the employees with a pre-solved solution on problems that could eventually occur. All together Citibank is improving the environment around them, and at the same time, also saving up their “trust bank,” a concept used to judge organizations through the eyes of popularity. Sales Promotion As the last part of sales promotion Citibank uses sales promotion to attract new customers. They do this with the help of credit card mailers and special online offers. The credit card mailers are sent through the postal service and are an expensive way to inform consumers about their offers. It is though highly effective among their target group. On their website Citibank offers special interest rates on special loans to redeem these opportunities the consumer
  18. 18. must use a promotional code also available online. These offers are time sensitive and allow Citibank to track the use and success of the promotion. Five Forces Model As demonstrated through Michael Porter’s Five Forces Model below, Citigroup is currently facing its greatest amount of competition in the domestic consumer banking market from Bank of America. Bank of America has long been the most dominate holder of market share in the U.S. consumer banking market, and poses the greatest threat to Citibank’s attempts to penetrate the U.S. consumer market. While Bank of America serves as Citi’s largest source of competition, smaller banking institutions, such as Washington Mutual and Wells Fargo, are quickly becoming points of concern for Citigroup. These smaller institutions are not only competing for market share held by Bank of America, but also for market held by Citigroup. This is significant because the U.S. consumer banking market is already heavily saturated, and there is no room for new, pure growth. Any increase in market share seen by one company will be due to a decrease in market share held by another company. As such, the more competitors in the market place, the more difficult it will be for Citigroup to secure a portion of the domestic consumer banking market. WaMu Bank of Shareholders America US Consumer Online Resources
  19. 19. Product Life Cycle In examining the position of Citibank in the product lifecycle, it is important to analyze its location from two different viewpoints. First and foremost, analyzing Citi from a domestic standpoint, as can be seen below, Citigroup is currently operating in the growth stage of the product life cycle. This assessment has been reached through analyzing the three main components of Citibank’s consumer banking: Personal Banking, Credit Card Services, and Loans and Mortgages. Currently, Citibank holds significant market share in the area personal loans and mortgages. With competitive pricing, Citi is able to target a large potential audience for their products. Likewise, Citibank holds a large portion of the credit card market. Offering credit card services with significant product line depths, Citi is able to actively market their credit cards to a wide target audience, and in doing so capture a highly diversified market composed of consumers with a wide array of preferences. The final component of Citi’s consumer banking division is the actual bank branches. Here Citi has room for enormous domestic growth. Unlike Bank of America, whose branch presence on every street corner in America has resulted in the saturation of their market, Citi lacks a domineering brick and mortar presence. As such, Citi has only just begun to enter the growth stage in the product life cycle with their consumer banking branches. While Citi’s loans and credit card services are nearing the end of the growth stage, Citi still has more than ample room to expand in banking locations.
  20. 20. Domestic Product Life Cycle Introductory Growth Maturity Decline Stage BOA CB While the emphasis of this paper’s analysis is on Citigroup’s domestic consumer market, it is equally important to examine Citibank from an international consumer basis as well. Due to the size and present nature of Citi’s international presence, the company is currently approaching the maturity stage of the life cycle in countries such as Argentina, Japan, Mexico, and Western Europe. As was demonstrated through recent articles in The Wall Street Journal, Citigroup as a whole has lost market share and relinquished its title of largest financial institution by market cap to long time competitor and main consumer banking rival Bank of America. This is demonstrative of two crucial points. First, Bank of America has lately been successful in encroaching on Citigroup’s market share, especially in the international marketplace. This is significant because Citigroup has long been the king of international banking, and as little as ten years ago substantially led Bank of America in pace of growth and market presence. This change of market cap domination represents a change in sentiment from analysts, a change that signifies a stronger positive belief in Bank of America’s long term growth prospects over those of Citigroup’s (Bauerlein, C1). Second, Citigroup has failed to keep pace with the increased rates of growth of their competition. As previously mentioned, this not only hurts Citigroup’s
  21. 21. share price (which is one of the aspects of importance emphasized in Citi’s three shared responsibilities), but it also curtails Citi’s prospects for the continuation of their historic double- digit earnings growth (Bauerlein, C1). In conclusion, we ask ourselves: Does Citigroup’s marketing match its mission? Our answer is most definitively yes. Through the different marketing techniques, such as product promotions, public relations, and advertising, Citigroup fulfills their responsibility to their franchise. Through the provision of employee services such as daycare, health coverage plans, and career development opportunities, Citigroup fulfills its responsibility to its employees. Finally, through the wide and differentiated financial products Citigroup offers, continued emphasis on integrity and ethical business practices, and the importance Citigroup places on client relationships, Citigroup has fulfilled its responsibility to its clients. As has been demonstrated throughout our analysis, Citigroup has continued to grow and expand its operations in order to achieve its long-term goal of being the most respected global financial services company. Through marketing techniques of cross-promotion, exemplified through the Thank You Points rewards system, Citigroup has been able to successfully grow its consumer base in areas such as consumer checking and home mortgages. Through offering competitive rates and continuous sales promotion, Citibank has become a leader in the market for student educational loans. By recognizing that their retail branch presence in the United States is smaller than it could be, Citigroup has undertaken expansionist policies in order to directly infringe on market share long dominated by Bank of America. While Citigroup is by no means perfect, it recognizes its strengths, weaknesses, opportunities, and threats, and seeks to remedy them through aggressive marketing strategies. After extensive research and gathering of data, it is for the previously mentioned reasons that we believe Citigroup’s marketing matches it mission.
  22. 22. Works Cited Bank of America, (2006) Retrieved December 3, 2006, from http://www.bankofamerica.com Bauerlein, V., Riley, C., (2006) Citigroup Deposed as Cap King. The Wall Street Journal, C1. Retrieved December 2, 2006, from http://www.wsj.com Citibank. (2006) Retrieved December 1, 2006, from http://www.citi.com Citigroup. (2005). 2005 Annual Report, 1-192. Citigroup.com. (2006). Retrieved December 1, 2006, from http://www.citigroup.com Datamonitor. (2006). Citigroup Company Profile. Datamonitor, 1-40. Retrieved November 12, 2006, from the Datamonitor Company Profiles Authority. Hair, J.F., Lamb, C.W., McDaniel, C. (2006). Marketing (8th ed.). Mason Ohio: Thomson South Western Weir, C., (2006). Bank Executive's Advice Focuses On 'Where You Want To Go': Citigroup Singapore Chief Sees International Growth As Catalyst in Job Market. The Wall Street Journal, B7. Retrieved November 2, 2006, from http://www.wsj.com

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