Sapphire Brand Analysis Marketing

Week 5 discussion 2: Analysis of the Sapphire Brand

The Sapphire Reserve brand is a favorite among credit card holders, particularly younger customers. Card holders benefit from a range of travel credits, travel insurance protections, and exclusive access to airport lounges across the world, in addition to a number of statement credits. This text analyzes some crucial aspects of the Sapphire brand to determine how it relates to the product development and the diffusion process.

Factors the Placed the Sapphire Brand in a Class of its Own

The Sapphire Reserve brand took the industry by storm in the first month(s) of its release. Reports indicate that demand for the credit card was so high that the company ran out of both the metal card and the packaging used to ship it within a few days of the product’s launch (Pilcher, 2016). In less than a month, the company had depleted supplies and materials that had been projected to last two years, forcing the issuance of temporary plastic cards to thousands of customers (Pilcher, 2016). Despite its hefty annual fees amounting to $450, the Sapphire brand had several attributes that helped to offset the high annual fees and place it in a class of its own. These included a signup bonus of 100,000 points (worth around $1,500) that applied after the customer spent $4,000 in the first three months, triple points on dining and travel worldwide, access to more than 900 airport lounges across the world, and an easy-to-use $300 travel credit every year (Pilcher, 2016). The Sapphire points were also worth more when redeemed for travel than any other Chase credit card (Pilcher, 2016).

The Sapphire credit card also stood out for its style. Product style has to do with the outer appearance or visuals of a product, which serve to create aesthetic value for customers (Kotler et al., 2019). The Sapphire card has a weighty metal core, unlike competing brands that are mostly made of plastic (Pilcher, 2016). The Sapphire cards are thus heavier, with sleek designs, designed to help users get noticed whenever they plunk their cards on the table to make payment (Pilcher, 2016).

Industry Dynamics using the Introductory Phase that Increased the Product’s Attractiveness

The Sapphire brand was introduced just after the 2008 financial crisis, which had a significant effect on the credit card industry. Credit card issuers had accumulated million in losses amidst sharp increases in the number of people who could not pay their bills due to job losses and other financial hardships. To offset the losses, many credit card companies raised their interest rates, reduced some perks in the high-end cards, and increased their monthly payments even for customers who always paid their bills on time. In response to the crisis, Congress, in 2009-2010, passed the Dodd-Frank Wall Street Reform regulations with the aim of preventing a recurrence of the events leading to the 2008 financial crisis. The Sapphire brand was thus introduced at a time when customers in the industry were facing financial hardships due to the recession and needed a credit card issuer capable of offering more perks for less (premium strategy). The Sapphire brand appealed to credit card customers due to the value generated from its unmatched signup bonuses, annual travel credits, and triple points on dining and travel.

Product and Service Extensions of the Sapphire Preferred Brand since the 2009 Introduction

The Sapphire brand has made a series of product and service extensions from the Sapphire Preferred launched in 2009, as evidenced in the Sapphire Reserve launched in 2016. One of the significant extensions has been in the area of rewards, where the Sapphire Reserve allows customers to earn 3 point per dollar on dining and travel, up from 2 points per dollar in Sapphire Preferred. The brand has also increased its redemption bonus for points redeemed for travel – points in Reserve are worth 50 percent more when redeemed for travel or other eligible purchases, up from 25 percent in Preferred (Frankel, 2021). Another notable improvement on the Sapphire Preferred was the introduction of a $300 annual statement credit for reimbursement for travel purchases charged to a customer’s account each anniversary year (Frankel, 2021). There has also been an extension of priority pass memberships that grant customers access to premier airport lounges across the world (Pilcher, 2016). These priority pass memberships in the Sapphire Reserve grant customers access to a wider array of airport lounges than was possible in the referred Brand. These extensions, however, came with increases in the annual fee, from $95 to $550 (Frankel, 2021). This signifies an expansion of the target market to include a wealthier group of customers interested in a new upmarket card, particularly because competitors such as Amex and Amex had cut some perks from their high-end card such as free rounds of golf and airport lounge access (Grobart, 2016).

Customer Adoption and Diffusion Process Focusing on Early Adopters and Early Majority

The customer adoption and diffusion process is the process that a customer goes through before arriving at the decision to try or not to try, or to continue using or discontinue a product (Kotler et al., 2019). The first stage is the knowledge stage, where the customer is made aware of a product. (Kotler al., 2019) Next is the persuasion stage, where the customer forms an attitude about the product by observing the gains to be made and costs to be incurred (Kotler et al., 2019). The third stage is the decision stage, where the customer, having formed an attitude, adopts, rejects, or makes a choice about the product or innovation (Kotler et al., 2019). Decision is followed by implementation, where the customer puts the product in use. The final stage is confirmation, where the customer seeks approval or reinforcement for the innovation decision (Kotler et al., 2019).

However, how fast a customer adopts a new product or innovation depends on what category of investors they are (Kotler et al., 2019). Innovators are the first to adopt a product or innovation (Kotler et al., 2019). They are youngest in age, but are willing to take risks, enjoy close contact with scientific sources, are social, and have great financial liquidity (Kotler et al., 2019). The next category is early adopters, who are the second-fastest to adopt (Kotler et al., 2019). They have the highest degree of opinion leadership among the different categories of adapters, but are more social, educated, younger, and have a higher social status that the late adopters (Kotler et al., 2019). The early majority are the third category to adopt an innovation (Kotler et al., 2019). They seldom hold opinion leadership, their social status is above average, and they are slower in the adoption process than the innovators and early adopters (Kotler et al., 2019).