Business Case:

Rewards credit cards allow you to earn points, cash back, or airline miles when you make credit card purchases. Most rewards cards award you a certain number of points per dollar you spend, and then allow you to use those points towards cash rebates, airline tickets, travel, major purchases, and special offers and perks.

MasterCard Advisors, the professional services arm of MasterCard Worldwide, offering a points-based reward program (i.e. the loyalty program). As a consultant for MasterCard Advisors, you would like to determine the effectiveness of their marketing on customer behavior in credit card usage. MasterCard Advisors was also unaware of the effect of loyalty programs from the churn reduction standpoint. You could find the reward points structure below.

• Household Necessities (Gasoline and Grocery)     3 points per dollar spent

• Anything Else                                                               1 point per dollar spent

Deliverable:

1. The aim for this case study is to gain an understanding of the customer behavior in the credit card portfolio. Please use the Raw Data and SIC Description spreadsheet to prepare the Case Study. You need to submit your Case Study in ppt or pptx format.

   • Determine the effectiveness of the loyalty program (10%). Does the reward program target the right customer at the right time with the right offer (5%)? You need to use the data provided to answer the question.

   • If you need to restructure the points-based reward program to gain market penetration, what would be your recommendation? (10%). Your recommendation needs to be based on the data provided.

2. Prior to completing the Case Study, please use Microsoft Excel to answer Q1 – 11. (75%) You need to submit your work in xls or xlsx format.

3. Please make sure to review the Assignment Guidelines prior to uploading the files to iCollege.