Chase Bank, a commercial and consumer banking subsidiary of the largest U.S. bank, JPMorgan Chase, offers services such as personal banking, credit cards, mortgages, and auto financing. Chase Bank is known for its high customer satisfaction rating, ranking the highest among the six largest U.S. banks. Serving nearly half of U.S. households, Chase Bank has over 93 million cardholders and 5000 branches nationwide In 2006, Chase Bank initiated a substantial market research project in order to strengthen its credit card operations.

The project focused on deeply understanding the various consumer segments in the credit card market. When segmenting the market, credit card companies often use two types of demographics: age group and asset amount. In addition, credit cards are differentiated by factors such as the annual fee, rewards such as cash back and proprietary rewards (points), and factors such as interest rates, credit lines, and creditworthiness. Chase’s market research project showed that competing in the affluent customer segment of the consumer credit card market would be valuable in building a stronger presence for the company. According to the research, this demographic represented 15 percent of U.S. cardholders at the time but generated over 50 percent of total credit card spending. .......

1. Who are the customers targeted by Chase with the Sapphire card? What are the key value and profile characteristics of these customers?

2. What value does the Sapphire card create for customers?

From a customer’s perspective, what are the pros and cons of the Sapphire card compared to other credit cards?

3. What role did promotional incentives such as the bonus points play in creating customer demand? Would Millennials remain loyal customers once they had taken advantage of the initial offer? Would the Sapphire card continue to be attractive to Millennials if its promotional incentives were reduced and became similar to other credit card offerings?