What were the primary cross marketing initiatives in the case and how they did benefit the organizations involved?

Question

What will be an ideal response?

Answer 1

Put in order to perpetrate the cross marketing initiatives throughout the company, Citigroup formed the CMG or
cross marketing group. The CMG met regularly to review results, identify issues, promote successful business
transfers and jumpstart key cross marketing initiatives. Their primary aim was to maximize shareholder value by
using Citigroup extensive distribution channels to widen and intensify customer relationships. They wanted to
ensure that customers would be less receptive to competitors’ products and wanted to increase customer loyalty thus
increasing profitability per customer compared to the acquisition cost per customer. CMG had the job of keeping
various business units within Citigroup informed of each others' cross marketing progress with a monthly report and
financial information. A site was developed on Citigroup's Internet that detailed activities of Citigroup's cross
marketing efforts and served as a centralized resource to capture all relevant information, with the goal of
accelerating cross marketing initiatives across business units. CMG divided cross marketing into consumer
programs and corporate programs. Core insurance products or mutual funds when sold by Citibank were considered
cross marketing, and similarly sale of credit cards by Salomon Smith Barney was considered cross marketing. The
cross marketing revenue was divided into distribution revenue and manufacturing revenue-the distribution revenue
is generated by the channel through the sale of products, and the marketing revenue is generated by the business that
manufactures the products sold. The most profitable relationship in 2000 was between Salomon Smith Barney and
Travelers, where $3.4 billion was generated by the Salomon Smith Barney in cross marketing endeavors. In
corporate programs this differentiation between manufacturing and distribution of corporate products was not so
easy because the distribution channel represented a set of customers to whom products and services were provided.
Thus, sale of products across distribution channels was defined as cross marketing in all cases, recognizing that the
responsibility for distribution and sales of the products was shared. In this category the Global Relationship Bank
which focused on servicing large multinational companies and their subsidiaries, proved to be the most effective
cross marketer, generating $2.8 billion in additional revenue for Citigroup in 2000. Citigroup total cross marketing
revenue for 2002 was a significant $3.3 billion and represented 15% of total revenues which underscored the success
of their cross marketing relationships.