Chase Sapphire Case Analysis

Chase Sapphire Case Analysis

Q1. What is the role and what are the pros and cons of the Chase Sapphire Reserve (CSR) for the Chase Sapphire Brand?

Chase has launched many kinds of credit card before Chase Sapphire, and they have strong competitors such as Amex, Citigroup, Capital One and Bank of America in credit card market. Most of the U.S credit companies focus more on the customer segments which is the 26-60 age group. Aiming to strengthen their presence in the affluent group, Chase subdivided the 26-60 age group and launched a sub-brand called Chase Sapphire. Even though Chase had promoted Sapphire Preferred and focused on wealthy people, they faced great competition as Citibank entered the premium credit card market. The game in the credit card industry is furious, and customers are “savvy.” Although the sales of the volume were growing up with Sapphire Preferred, the gap with other credit card brands would disappear. Also, it was hard for Chase to maintain customer loyalty as customers cannot waive their $95 annual fee in the second year. Thus, based on research results, Codispoti found out she needed to focus on “millennial attitudes towards credit cards and churners” to perfect Chase Sapphire’s brand portfolio. Sapphire team decided to target “new affluent” who age from 25 to 44 and like adventures. Since churners want to maximize the value of every point they can achieve, and millennials tend to collect different experiences, Chase Sapphire decided to offer more rewards in dining and travel, and provide convenience, relevance and more choice with their customer. The role CSR plays in Chase Sapphire brand is a niche product, which was a star product in the brand portfolio and would become the cash cows later. Chase invested CSR heavily in making CSR a high-performance product, and those investments such as attractive rewards and travel credit did bring a high growth rate. When it becomes a cash cow, Chase does not need to invest that much money, but they will make a significant profit based on $450 annual fee. CSR helps Sapphire brand build and enhance prestige and adventurous brand image. It demonstrated what young successful customers’ desire – accumulating their experiences with affluent convenience, relevance, and choices.

Moreover, Chase succeeded in extending the market share of the industry because of the popularity of CSR. However, since the whole Chase Sapphire brand is too similar, it is tough for customers to figure out which one is the best fit for them, and Chase Sapphire team need to invest heavily to ensure that the two other products won’t “cannibalize each other.” Also, the annual fee of CSR is $450, which is higher than the yearly fee of most credit cards, so CS team need to carry more ideas about rewards or ways of redemptions to prevent it from becoming a questioned child or dog. 

Q6. Evaluate Chase Sapphire brand and product portfolio. What recommendations do you have for Chase Sapphire’s brand and product portfolio strategy? Why?

Chase Sapphire Brand Portfolio

        Even though CSR is the expansion of CSP and they are both under the Chase Sapphire brand, the brand distance is too short. They may need to ensure the “daylight” between different products so customers can easily find their desired solutions in their situations. Otherwise, customers will feel confused about which one is the best fit for them. Thus, they may need to carry out different rewards programs which only can be applied to one of the two products to distinguish customers’ needs.