Credit Cards Blue Ocean Strategy

Day 39 (1) - 961 days to go

I went to Singapore on 6 June 2011 and as such did not update my blog from day 36 to 38. The reason is that the Meritus Mandarin Hotel at Orchard Road wanted to charge me SGD30 per day or SGD10 per 4 hours. I think most likely I will not go back to the same hotel as free internet access should be a standard service provided by hotel now. Too bad, because of SGD10, this hotel will be losing my business.....maybe permanently despite the fact that the location is good and the staff provide good customer services.

Recently I just applied for Citibank credit card as a result of a CC agent called me up and explained to me various benefits offered by Citibank CC. Initially I do not have any intention to apply as government just imposed a RM50 tax on each CC. However, I applied for it after know some of the benefits offered by this bank.

20 years ago, CC holders of Citibank card are proud owners of CC as it was not easy to get a Citibank CC and as such perceived to be of higher social status. However, over time, when more and more banks issued CC that offered many similar benefits, Citibank cards do not command similar social status anymore and actually start to lose market share to other foreign banks such as SCB and HSBC. When more and more local banks offered CC to card holders and the entry level is lower, Citibank lost even more market share.

However, I noticed that Citibank has been more aggressive to fight back by offering more benefits to card holders and hence attracted more better quality card holders like me who want to have special member privileges not offered by most other credit cards. For instance, Citibank cardholders are offered free use of Plaza Premium Lounge at KLIA. some other CC do offer similar privileges but limit to a few time per year, for instance. HSBC CC members will earn 5x bonus points if used in overseas. CIMB and Direct Access Cards give 15% discount for duty free purchase made in certain duty free shop in KLIA.

In sum, the trick is to offer some unique benefits to a niche market i.e. create its own Blue Ocean strategy as there is no more price war for CC since everyone is offering CC for free. There is always a niche market in all industry. The trick is whether you notice or able to create one before it is taken by your competitor.