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CASE ANALYSIS: AMERICAN EXPRESS-Vrushabh BhaskarRAIT MumbaiPrepared during internship under Prof. Sameer Mathur at IIM Lucknow

Brand name: American ExpressAmerican Express (abbr. Amex) is a multinational corporation, globally known for its credit card, charge card, travelers cheque and financial services

BRAND VALUES Prestige & AffluenceInternational AcceptabilityImpeccable Customer serviceTrustSecurityIntegrity

How did the Company begin?

In 1850Amex started as a Shipping companyLater in 1891, it grew into a Travel service companyand launched first internationallyaccepted Travelers cheque

Today, American Express has evolved into a Global Payments Company

Source: http://about.americanexpress.com

BusinessWeek and Interbrand ranked Amex the fifteenthMost Valuable BrandIn the World

How did Amex position itself so well as a Global Financial Services Brand?

Determining the Competitive Frame of referenceTarget market of Amex: Wealthy, elite consumers less prone to market risks Product mix for Amex: Charge cards, credit cards, travel services, financial services

Competitors of American Express

Although these brands are the competitors of Amex, they target the less affluent consumers

Analyzing Amexs CompetitorsPotential CompetitorActual CompetitorMasterCard, Visa Compete with Amex in the credit card space.Act as intermediaries in the credit card space.They allow financial institutions to participate in their networks and issue credit cards that bear the Visa or MasterCard brand name. Target Market: Less affluent market segment.Discovery Financial ServicesIssue cards itself and thus bear the financing risk. Competes with Amex in both credit and financing services.Charges customers for the use of the card and also charges merchants a fee.Target Market: Less affluent market segment.

Points of Difference for American ExpressAttributes or benefits that a consumer strongly associate with a brand, evaluate and believe that could not find to the same extent with a competitive brand are known as Points-of-Difference (PODs) for the brand.Luxury credit and charge card serviceElusive image Membership feeling to the customerUp-market customer base associationSelf-issuing of cardsImpeccable customer service

Criteria to determine the given associations truly function as PODsAssociationDesirable toDeliverability DifferentiableLuxury credit and charge card serviceAffluent customersIssued first charge card in 1958; collected higher feeCompetitors charged less annual feeElusive imageAds featuring celebs; elite promotional eventsMinimal endorsement campaigns and less elite eventsMembership feelingCardholders addressed as card membersNo such membership strategyImpeccable Customer service24-hr personal service; invitations to elite events Moderate Customer service even to affluent class

Points of ParityPoints of Parity (POPs) are attributes that need not be unique to the brand. It might be shared with other brands.

POPs for AmexQuality Customer Service for credit and charge cards.Global acceptabilityEfficient Travel service and travelers cheques servicesSelect Banking

Brand Mantra!

American Express brand mantra is world class service and personal recognition. To effectively deliver this, we need to service our clients online, and every year we make multi million dollar investments enhancing our service.-Andrew J. BuckleyAndrew J. BuckleyVice-President for Marketing & Strategy EMEA (Europe, Middle East & Asia), Global Commercial Card Division American Express

Advertisement campaigns and endorsements

Check the video commercials!

American Expresss Business IntegrationExpansion into variety of financial categories during 1980s: brokerage, banking, insurance; acquired companies like E. F. Hutton & Co. Encountered difficulty in integrating these broad financial offerings.Consequent decision of divesting many of offerings and focus on core competencies: travel services, credit and charge cards, travellers cheque and select banking services. Expanded by increasing Amex card accepting merchants, like Walmart. Launched an ad campaign called, Do More.

Decision Of Amex on growing beyond its affluent customersRecession of 2008: The stock price fell by 64%Caused by: increased default payments, weaker billings, higher credit losses.Decided to target beyond its affluent customers, to low-margin customers.The newer products allowed consumers to carry over the balance and pay only interest hit Amex during the recession.As a result, both the profit bar and brand image got seriously affected.

Expanding the multi-user model can accommodate growth in foreign markets which will and provide future growth in developing economies. Enhance business partnership across industries to expand target market, attracting exclusive members by brand awareness and recognition strategies. Explore the advancement in technology aligning with the banking sectorLeveraging technology to make transactions and payments simpler.Recommendations for American Express

Summary

DisclaimerCreated by Vrushabh Bhaskar, RAIT Mumbai, during a marketing Internship by Prof. Sameer Mathur, IIM Lucknow