Jul 052012

As you add more value to a product, you also increase your costs of producing the product. The question is whether your consumers actually see value in the extra ‘benefits’ that you are providing. In this activity for a banking ‘club”, you need to determine what would be the appropriate level of augmentation for each of the club’s elements.



Your task is to design a ‘Financial Club’ for a bank. Their target market is retired people (aged 60 years plus). Work through each row below and determine the extent to augment each club feature.

No Augmentation OR

Level One OR

Level Two OR

Level Three

Standard Interest Rates

Occasional special interest rates offers

Frequent special interest rates offers

Permanent special interest rates offers

No discounts

Discounts on selected financial products

Discounts on all financial products

Discounts with a range of other business (e.g. restaurants, hairdressers)

No newsletter

Emailed financial newsletter

Mailed financial newsletter

Mailed lifestyle (also covers non-financial issues) newsletter

No seminars

Financial seminars – at cost to attendees

Financial seminars – free to attendees

Lifestyle seminars – free to attendees

No web site

Information on firm’s overall web site

Special password access to a separate part of the firm’s overall web site

A separate stand alone web site


No loyalty program

Loyalty points on selected products

Loyalty points on all products

Loyalty points on all own products, plus points from using other business’s discounts (see above)


No special treatment

Priority access to the call centre

Access to a team of general personal bankers

Access to a dedicated personal banker


No special events

Invitation to a Christmas party

Social events and hospitality at cost to attendees

Free social events and hospitality, free for attendees




  1. What is your final design for the bank’s financial club?
  2. Why do you think that this structure will best appeal to the target market?
  3. To what extent did you augment the product?
  4. How does your product compare to the design of your fellow students?
  5. Do you think that your financial club design will be profitable (taking into account the costs of running the club as well)?


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