American Express is a global financial services company known for its credit cards, charge cards, and other services. It targets wealthy, elite consumers and positions itself as a luxury brand through exclusive benefits like impeccable customer service and an elusive image cultivated through celebrity partnerships and promotional events. While competitors like Visa and MasterCard issue cards through banks and have a broader target market, American Express self-issues cards and differentiates itself through a membership experience for cardholders. To grow, American Express has expanded its merchant acceptance network and launched new products while maintaining its reputation for quality service and focus on core competencies over a diversified set of financial offerings.

1. CASE ANALYSIS:
AMERICAN EXPRESS
-Vrushabh Bhaskar
RAIT Mumbai
Prepared during
internship under
Prof. Sameer Mathur at IIM Lucknow

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

3. Prestige & Affluence
International Acceptability
Impeccable Customer service
Trust
Security
Integrity

4. How did the
Company begin?

5. Source: http://about.americanexpress.com

6. BusinessWeek and
Interbrand ranked Amex
the fifteenth
Most Valuable Brand
In the World

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

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

9. Competitors of
American Express
Although these brands are
the competitors of Amex,
they target the less
affluent consumers

10. Analyzing Amex’s Competitors
Potential Competitor Actual Competitor
MasterCard, 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 Services
• Issue 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.

11. Points of Difference for American Express
Attributes 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 service
Elusive image
Membership feeling to the customer
Up-market customer base association
Self-issuing of cards
Impeccable customer service

12. Criteria to determine the given associations truly function as
PODs
Association Desirable to Deliverability Differentiable
Luxury credit
and charge
card service
Affluent
customers
Issued first
charge card in
1958; collected
higher fee
Competitors
charged less
annual fee
Elusive image Ads featuring
celebs; elite
promotional
events
Minimal
endorsement
campaigns and
less elite events
Membership
feeling
Cardholders
addressed as
“card
members”
No such
membership
strategy
Impeccable
Customer
service
24-hr personal
service;
invitations to
elite events
Moderate
Customer
service even
to affluent
class

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

14. POPs for Amex
• Quality Customer Service for credit and charge
cards.
• Global acceptability
• Efficient Travel service and travelers cheques
services
• Select Banking

15. “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. Buckley
Andrew J. Buckley
Vice-President for Marketing &
Strategy EMEA (Europe,
Middle East & Asia), Global
Commercial Card Division
American Express

17. American Express’s Business
Integration
• Expansioninto variety of financial
categories during 1980s: brokerage, banking,
insurance; acquired companies like E. F. Hutton &
Co.
• Encountereddifficulty in integrating
these broad financial offerings.
• Consequent decision of divestingmany of
offerings and focus on core competencies: travel
services, credit and charge cards, travellers
cheque and select banking services.
• Expandedby increasing Amex card
accepting merchants, like Walmart.
• Launchedan ad campaign called, “Do
More”.

18. Decision Of Amex on growing beyond its
affluent customers
•Recession 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.

19. • 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
sector
• Leveraging technology to make
transactions and payments simpler.
Recommendations for
American Express

20. Summary

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