1. Should Alpen Bank launch a credit card? And how would the credit card opportunity compare to focusing on core business of banking service?
Considering the economic and market conditions explained in the case as well as the cost revenue analysis, Alpen should launch a credit card. * The rapid economic growth has led to higher incomes which have increased the proportion of middle class and upper-middle class in the society. This growth has also led to an increase in disable incomes, means that people have more money to spend. * The country has 10% households who have 24% of the wealth. These people have sufficient income and are conscious about their social image and less sensitive to prices. * Although it is still …show more content…

* Actually, the middle class also has a huge potential as some consumers in this class can be affluent ones in the future. However they are more price-focused and would only welcome this new credit card if the interest rates are low. It would be harder to Alpen Bank to set the interest rates that would attract consumers but protect the company from the default risk. Furthermore, Alpen Bank’s experienced showed that actual card utilization was significantly lower for the middle-class customers.
3. Which direct marketing channel should Alpen Bank use in order to successfully enter the market?
There are five different direct marketing channels that Alpen Bank considers using them: Direct mail, Take One, FSIs, Direct Sales, and Branch Cross-Sell. Each channel incurs different unit cost, number of prospects reached and response rate and qualification rate.
According to exhibit …., Direct Mail, Take One, and FSIs, are quite expensive but they will bring a lot number of customers. If the Alpen Bank uses only Direct Sales and Branch Cross-Sell, it will not be able to get enough customers to generate at least €5 million in 2 years. Thus, the company should use all five avenues to build a customer base.
In conclusion, Alpen Bank should launch a premium credit card with the full efforts by using full marketing and advertising efforts to build a customer base. The company may also do some promotion with merchants such as temporarily low merchant