Chase Sapphire
When looking at the case study, several facts are presented. One of the things addressed is about the creation of a millennial cult brand. Chase sapphire reserve cards were launched back in 2016, and the sales exceeded the expectations. The majority of the new customers were under 35 years, which indicated a strong millennial cohort. During that year, the card had 100,000 points that were signed on a bonus. Another fact is that the JPMorgan chase was operating four different lines, and it generated $44.9 in the U.S revenue. The article has also addressed the U.S consumer credit card market. Five players are mentioned to participate in the credit card industry, including banks, cardholders, merchant acquirers, and network providers.
There is one problem that is evident in the case study. The company had reduced the introductory 100,000- point bonus to 50,000 in 2017. The issue was how to ensure that the new customer’s flood was going to be profitable for the firm. The company was in big problem since the promotional inducement was no longer there, and this was likely to scare aware the customers. The customers were required to renew their cards by paying $450 as the annual fee. This was going to impact the firm negatively since a significant number of the users were not going to pay the annual fee. This is a common problem in most of the companies since they are not able to maintain the big number of consumers who are attracted by bonuses.
The best way to go about this case is by looking at the strengths, weaknesses, opportunities, and threats that impact on this firm (Phadermrod et al., 2019). One of the strengths is the existence of loyal customers and the production of original materials of high quality. One of the primary weaknesses that have significantly affected the firm is creating a millennial cult brand case solution. The company has not utilized the green energy and thus no ecological sustainability. The business can create an opportunity by broadening its operations to other nations. This way, it can reach out to new customers. Just like most of the organizations, the biggest threat is competition and government regulations.
Several solutions can be applied to solve the problem affecting Chase Sapphire. One is to build brand awareness. The best way to increase awareness is by using social media platforms. This way, any information about the firm can reach more people. Some of the best platforms to use include YouTube, Tweeter, Facebook, and Instagram (Godey et al., 2016). These platforms are commonly used, and the company can build its brand by making use of them. Another solution is to reward existing customers. This motivates them to remain loyal and invite more people so that they can get rewards. Another solution is to launch new products or ideas. This implies that the firm should come up with unique cards to attract new customers.
Additionally, any solutions are likely to have some consequences, which are either positive or negative. One of the consequences of using social media is that it can only target a specific age. Those who use social media are young people, which means that the older generation is likely to be left outside. Rewarding the customers can lead to losses in the long run since the company will be forced to spend most of the profit when giving rewards. Launching a new product is likely to attract new customers because it will have unique characteristics compared to other cards. This way, new customers can be interested in trying the new product.
The best decision that should be chosen to solve this company’s problem is to build brand awareness. When looking at different markets, some products are not purchased because the customers are not aware of their existence in the market (Greg et al., 2019). Thus, the best way is for chase sapphire to increase brand awareness among the public. There are different ways of doing that, and one is through advertisement. Even though it will be charged an advertisement fee, the results are likely to be remarkable. The best way to create awareness is through social media. Currently, a significant number of individuals have smartphones, which implies that they can access the internet. This way, the company can open different social media accounts to reach out to more consumers.
One of the general ideas drawn from this case and can be applied elsewhere is market segmentation. In this case, the banks segmented the market so that they could identify different types of customers. Segmentation strategies that were used included behavioral, demographic, and psychographic. Segmentation is one of the marketing theories that are very common in businesses. This is where products are designed according to the customers’ needs since not all share common problems. Segmentation makes it easier for customers to access and purchase products (Kahle et al. 2019). For example, a product can be designed to satisfy the customers based on demographics, including age, sex, and race.
References
Kahle, L. R., Gurel-Atay, E., Yu, J. G., & Ring, K. (2017). Aviary Segmentation: Theory and Method. In The Customer is NOT Always Right? Marketing Orientationsin a Dynamic Business World (pp. 657-657). Springer, Cham.
Greg W. Marshall and Mark W. Johnston. 2019. Marketing Management 3rd Edition,
ISBN 978-1-25963715-5. McGraw-Hill,
Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis based SWOT analysis. International Journal of Information Management, 44, 194-203.
Godey, B., Manthiou, A., Pederzoli, D., Rokka, J., Aiello, G., Donvito, R., & Singh, R. (2016). Social media marketing efforts of luxury brands: Influence on brand equity and consumer behavior. Journal of business research, 69(12), 5833-5841.