Executive Summary
The Republic National Bank of Dallas is the leading lending institutes in the Dallas area and in all of Texas. In 1977 the current marketing director for RNBD was asked to assess the effect of offering a new type of account, an interesting paying account that allows for negotiable orders of withdrawal called a NOW account. The NOW account originated in the New England states in 1972 and have grown to be a sizable amount of all accounts held in the that area. With 50 months of data available to see how the NOW accounts have influence banking and the traditional checking accounts in the area, it was time for RNDB, a leader and innovator in retail bank accounts in the Dallas area, to consider the potential of offering and what effect it would have on the business.

Analysis shows that a 100% cannibalization of RNBD’s current retail checking accounts would cause a loss of close to $6 million dollars annually. At a 44% cannibalization, which was seen in Massachusetts, a market most similar to the Dallas area, would result in a loss of $2.6 million.

The recommendation for RNBD includes determining a breakeven point for an account balance at approximately $1,800 and focus on conversion of current customers at that level or above to avoid losing any of their current customer base.

Situation Analysis & Decision Problem
The situation at hand is whether Republic National Bank of Dallas should jump into the NOW account fray and offer NOW accounts along with their other products. NOW accounts are savings account, which are interest-bearing, that allows customers to write negotiable orders of withdrawal from the account, allowing the account to model that of a checking account. The biggest difference between the two accounts is NOW accounts pay interest where checking accounts do not. The question and analysis at hand is to determine if