please follow this instruction while solving this case course name (marketing management ) 1) Introduction 2) Backgroun
Posted: Tue Apr 26, 2022 1:01 pm
please follow this instruction while solving this case
course name (marketing management )
1) Introduction
2) Background
3) Alternatives
4) Proposed
Solution
5) Recommendations
American Express
AmEx is one of the world’s most respected brands, known globally
for its charge cards, travel services, and financial services. AmEx
began as a 19th-century express shipping company, grew into a
travel services company, and eventually evolved into a global
payments company associated with brand images such as prestige,
trust, security, customer service, international acceptability, and
integrity.
AmEx created the first internationally accepted “Travelers
Cheque” in 1891, which used the same signature security system and
exchange rate guarantees employed today. AmEx issued its first
charge card in 1958 but collected a higher annual fee than its
competitors to create a feeling of prestige and membership. A
charge card requires that customers pay off outstanding balances,
unlike the revolving debt possible with credit cards. By 1967,
one-third of the company’s total profit came from its charge card
businesses, and the AmEx card surpassed the Travelers Cheque to
become the company’s most visible symbol.
In the 1960s and 1970s, AmEx stepped up its marketing efforts in
response to strong competition from Master Charge (now MasterCard)
and BankAmericard (later to become Visa). Ad agency Ogilvy &
Mather created the now-famous “Don’t Leave Home Without It” in the
early 1970s as a “synergy” tagline. In 1974, the now-familiar
blue-box logo first appeared, with the
words AmEx printed in white outline over a
square blue background.
Many perceived AmEx cards as a status symbol signifying success
and achievement. The company called its cardholders “card members”
and printed the year they became members on their cards, suggesting
membership in a club. It maintained this elusive image through its
advertising, impeccable customer service, and elite promotions and
events.
During the 1980s, AmEx expanded into a variety of financial
categories, including brokerage services, banking, and insurance,
by acquiring a number of companies such as Lehman Brothers Kuhn
Loeb Inc. and E. F. Hutton & Co. It encountered difficulty
integrating these broad financial offerings, however, and it
divested many of its financial holdings in the early 1990s. The
new, leaner company focused on its core competencies: charge and
credit cards, Travelers Cheques, travel services, and select
banking and financial services. In addition, AmEx increased the
number of merchants that accepted its cards, adding Walmart, and
developed new card offerings, including co-branded cards. To
communicate the transformation that had taken place during the
1990s, the company launched a corporate ad campaign called, “Do
More.”
AmEx also responded to Visa and MasterCard’s increased pressure
in the mid-1990s by rebranding its Small Business Services division
as “OPEN: The Small Business Network” and adding benefits such as
flexible payments as well as special offers, partnerships, and
resources for small businesses. John Hayes, chief marketing officer
for American Express, explained the rationale behind developing a
separate small business brand, “Small business owners are
fundamentally different from people who work for large companies.
They’re characterized by a shared mindset; they live and breathe
the business they’re in. We think it’s important for this area to
have its own identity.”
At the turn of the century, AmEx introduced two revolutionary
new credit cards, Blue and Centurion Black. Blue contained a chip
that enhanced Internet security and targeted younger, tech-savvy
consumers with a hip image and no annual fee. The Black Card, on
the other hand, targeted the most elite clients, who spend more
than $150,000 annually and desired amenities such as a 24-hour
personal concierge service and invitations to exclusive events. The
company also continued to expand its Membership Rewards program,
which at the time was the world’s largest card-based rewards
program. This allowed cardholders to redeem points for travel,
entertainment, gift certificates, and other predetermined
offerings.
Visa turned on the pressure by taking ownership of the latest
consumer trend, check cards, which were debit cards that subtracted
money for purchases directly from a cardholders’ bank account.
MasterCard surged in popularity as well when it created the
“Priceless” ad campaign, which became a ubiquitous pop culture
reference point. However, AmEx scored a huge legal victory against
Visa and MasterCard in 2004 when the Supreme Court ruled that it
could pursue relationships with any and all banks, which
technicalities had prevented it from doing before. Over the next
three years, AmEx partnered with banks such as MBNA, Citigroup,
UBS, and USAA and increased its card accounts from 60 million in
2003 to 86 million in 2007.
AmEx introduced two new marketing campaigns in the 2000s. The
“My Life. My Card” campaign in 2004 featured celebrities like
Robert De Niro, Ellen DeGeneres, and Tiger Woods providing intimate
narratives about places, causes, achievements, and avocations that
were meaningful to them. In 2007, AmEx continued to feature
celebrities in its ads but introduced a new tagline—“Are you a
Cardmember?”—that acted as more of a call to action to join AmEx
than its previous, more passive campaign.
Things turned for the worse as the global economy collapsed in
2008 and 2009, significantly dampening American Express’s financial
results. The company’s stock price fell 64 percent in 2008 caused
by numerous problems, including increased default payments, weaker
billings, and higher credit losses. In addition, many analysts
agreed the company “grew too fast from 2005–2007.” The company had
changed its core strategy of targeting wealthier, low-risk
consumers with a prestigious brand and valuable rewards in order to
increase its total number of card members. Its newer products,
which allowed consumers to carry over a balance and pay only the
interest, came back to hurt American Express’s bottom line during
the recession.
Despite these disappointing financial
results, BusinessWeek and Interbrand ranked AmEx
the fifteenth “Most Valuable Brand in the World”
and Fortune ranked it one of the top 30 “Most
Admired Companies.” This brand value was a testament not only to
the company’s product and marketing innovation but also to its
commitment to providing customers with outstanding service at any
location in the world at any time of day. Today, AmEx offers a
variety of different personal cards as well as small business and
corporate cards, each with a different level of customer service,
fees, rewards, spending limits, and special access or services. The
company’s five most popular cards from 2009 were the Platinum Card,
Preferred Rewards Gold Card, Starwood Preferred Guest Credit Card,
Gold Delta SkyMiles Credit Card, and Preferred Rewards Green
Card.
course name (marketing management )
1) Introduction
2) Background
3) Alternatives
4) Proposed
Solution
5) Recommendations
American Express
AmEx is one of the world’s most respected brands, known globally
for its charge cards, travel services, and financial services. AmEx
began as a 19th-century express shipping company, grew into a
travel services company, and eventually evolved into a global
payments company associated with brand images such as prestige,
trust, security, customer service, international acceptability, and
integrity.
AmEx created the first internationally accepted “Travelers
Cheque” in 1891, which used the same signature security system and
exchange rate guarantees employed today. AmEx issued its first
charge card in 1958 but collected a higher annual fee than its
competitors to create a feeling of prestige and membership. A
charge card requires that customers pay off outstanding balances,
unlike the revolving debt possible with credit cards. By 1967,
one-third of the company’s total profit came from its charge card
businesses, and the AmEx card surpassed the Travelers Cheque to
become the company’s most visible symbol.
In the 1960s and 1970s, AmEx stepped up its marketing efforts in
response to strong competition from Master Charge (now MasterCard)
and BankAmericard (later to become Visa). Ad agency Ogilvy &
Mather created the now-famous “Don’t Leave Home Without It” in the
early 1970s as a “synergy” tagline. In 1974, the now-familiar
blue-box logo first appeared, with the
words AmEx printed in white outline over a
square blue background.
Many perceived AmEx cards as a status symbol signifying success
and achievement. The company called its cardholders “card members”
and printed the year they became members on their cards, suggesting
membership in a club. It maintained this elusive image through its
advertising, impeccable customer service, and elite promotions and
events.
During the 1980s, AmEx expanded into a variety of financial
categories, including brokerage services, banking, and insurance,
by acquiring a number of companies such as Lehman Brothers Kuhn
Loeb Inc. and E. F. Hutton & Co. It encountered difficulty
integrating these broad financial offerings, however, and it
divested many of its financial holdings in the early 1990s. The
new, leaner company focused on its core competencies: charge and
credit cards, Travelers Cheques, travel services, and select
banking and financial services. In addition, AmEx increased the
number of merchants that accepted its cards, adding Walmart, and
developed new card offerings, including co-branded cards. To
communicate the transformation that had taken place during the
1990s, the company launched a corporate ad campaign called, “Do
More.”
AmEx also responded to Visa and MasterCard’s increased pressure
in the mid-1990s by rebranding its Small Business Services division
as “OPEN: The Small Business Network” and adding benefits such as
flexible payments as well as special offers, partnerships, and
resources for small businesses. John Hayes, chief marketing officer
for American Express, explained the rationale behind developing a
separate small business brand, “Small business owners are
fundamentally different from people who work for large companies.
They’re characterized by a shared mindset; they live and breathe
the business they’re in. We think it’s important for this area to
have its own identity.”
At the turn of the century, AmEx introduced two revolutionary
new credit cards, Blue and Centurion Black. Blue contained a chip
that enhanced Internet security and targeted younger, tech-savvy
consumers with a hip image and no annual fee. The Black Card, on
the other hand, targeted the most elite clients, who spend more
than $150,000 annually and desired amenities such as a 24-hour
personal concierge service and invitations to exclusive events. The
company also continued to expand its Membership Rewards program,
which at the time was the world’s largest card-based rewards
program. This allowed cardholders to redeem points for travel,
entertainment, gift certificates, and other predetermined
offerings.
Visa turned on the pressure by taking ownership of the latest
consumer trend, check cards, which were debit cards that subtracted
money for purchases directly from a cardholders’ bank account.
MasterCard surged in popularity as well when it created the
“Priceless” ad campaign, which became a ubiquitous pop culture
reference point. However, AmEx scored a huge legal victory against
Visa and MasterCard in 2004 when the Supreme Court ruled that it
could pursue relationships with any and all banks, which
technicalities had prevented it from doing before. Over the next
three years, AmEx partnered with banks such as MBNA, Citigroup,
UBS, and USAA and increased its card accounts from 60 million in
2003 to 86 million in 2007.
AmEx introduced two new marketing campaigns in the 2000s. The
“My Life. My Card” campaign in 2004 featured celebrities like
Robert De Niro, Ellen DeGeneres, and Tiger Woods providing intimate
narratives about places, causes, achievements, and avocations that
were meaningful to them. In 2007, AmEx continued to feature
celebrities in its ads but introduced a new tagline—“Are you a
Cardmember?”—that acted as more of a call to action to join AmEx
than its previous, more passive campaign.
Things turned for the worse as the global economy collapsed in
2008 and 2009, significantly dampening American Express’s financial
results. The company’s stock price fell 64 percent in 2008 caused
by numerous problems, including increased default payments, weaker
billings, and higher credit losses. In addition, many analysts
agreed the company “grew too fast from 2005–2007.” The company had
changed its core strategy of targeting wealthier, low-risk
consumers with a prestigious brand and valuable rewards in order to
increase its total number of card members. Its newer products,
which allowed consumers to carry over a balance and pay only the
interest, came back to hurt American Express’s bottom line during
the recession.
Despite these disappointing financial
results, BusinessWeek and Interbrand ranked AmEx
the fifteenth “Most Valuable Brand in the World”
and Fortune ranked it one of the top 30 “Most
Admired Companies.” This brand value was a testament not only to
the company’s product and marketing innovation but also to its
commitment to providing customers with outstanding service at any
location in the world at any time of day. Today, AmEx offers a
variety of different personal cards as well as small business and
corporate cards, each with a different level of customer service,
fees, rewards, spending limits, and special access or services. The
company’s five most popular cards from 2009 were the Platinum Card,
Preferred Rewards Gold Card, Starwood Preferred Guest Credit Card,
Gold Delta SkyMiles Credit Card, and Preferred Rewards Green
Card.