One of 30 components of Dow Jones Industrial Average

Ranked 22nd Most Valuable Brand in the

World

Listed as one of the top 20 Most Admired Companies

in the World

Amex cards account for 24 percent of the total volume of credit card transactions in the

US

It started as an express mail It started as an express mail business in Buffalo, New York business in Buffalo, New York in 1850in 1850

Launched a money order Launched a money order business in 1882 to expand in the business in 1882 to expand in the area of financial servicesarea of financial services

Introduced Introduced Traveler’sTraveler’s Cheque Cheque in 1891, establishing itself as a in 1891, establishing itself as a truly international companytruly international company

Issued the first charge card in Issued the first charge card in 1958, and had one-third of its 1958, and had one-third of its profit coming from charge card profit coming from charge card business by 1967business by 1967

Finally evolving into a global Finally evolving into a global payments company , offering payments company , offering around 109.9 million cards around 109.9 million cards including consumer, small including consumer, small business and corporate cardsbusiness and corporate cards

But like most successful But like most successful companies, the journey for companies, the journey for American Express hasn’t been American Express hasn’t been smooth eithersmooth either

During the 1980s, it expanded into a During the 1980s, it expanded into a variety of financial categories by variety of financial categories by acquiring a number of companies acquiring a number of companies and unable to integrate them all, and unable to integrate them all, had to ultimately divest many of had to ultimately divest many of these financial holdings in the early these financial holdings in the early 1990s1990s

It was constantly It was constantly subjected to fierce subjected to fierce competition and competition and increased pressure from increased pressure from Visa and MasterCardVisa and MasterCard

Its stock price fell 64% during Its stock price fell 64% during the recession of 2008 caused by the recession of 2008 caused by numerous problems, including numerous problems, including increased default payments, increased default payments, weaker billings, and higher weaker billings, and higher credit lossescredit losses

Despite all these hurdles, Despite all these hurdles, American Express successfully American Express successfully maintained its elitist and maintained its elitist and elusive image, with its cards elusive image, with its cards being perceived as a status being perceived as a status symbol signifying success and symbol signifying success and achievementachievement

A deeper analysis of the company’s Brand Positioning reveals

Brand MantraWorld Class ServicePersonal Recognition

Points-of-ParityAnnual FeesUsed mainly for Travel and EntertainmentPoints-of-DifferenceSpend-centric modelClosed-Loop Network

Values/PersonalityPrestigeTrustGlobal acceptabilityVisual IdentityCenturion LogoSophisticated Design

Well-positioned as a premium company targeting affluent customers

American Express has American Express has understood the competition understood the competition that stands in front of it and that stands in front of it and has changed over time by has changed over time by providing services suited to providing services suited to the middle income groupsthe middle income groups

However, it still faces threatening However, it still faces threatening competition in its credit and charge competition in its credit and charge card businesscard business

The company launched a corporate ad The company launched a corporate ad campaign during the 1990s called “Do campaign during the 1990s called “Do More” to communicate its expansion and More” to communicate its expansion and integration into various businesses i.e. integration into various businesses i.e. charge and credit cards, charge and credit cards, Traveler’sTraveler’s Cheques, Cheques, travel services , and select banking and travel services , and select banking and financial servicesfinancial services

It adequately and profitably focused on all It adequately and profitably focused on all its core competencies, thus maintaining its core competencies, thus maintaining coherency in its corporate brand, making coherency in its corporate brand, making steady gains in mind and heart share of its steady gains in mind and heart share of its customers, and effectively communicating customers, and effectively communicating its key brand associations its key brand associations

Determine competitive frames of reference for each one of them

Identify optimal POPs and PODs for each unit

Design a unique, memorable and meaningful brand mantra

Employ differentiation strategies and emotional branding

Further, to maximize the contribution to equity of all its business units, American Express should-

From 2005-2007, American Express grew beyond its core affluent consumer base , with its newer products allowing consumers to carry over a balance and pay only the interest

Coupled with “Are you a Cardmember?” marketing campaign, this strategy helped Amex tap into newer target segments

Tackle competition from Visa and MasterCard and ultimately add to the overall popularity and penetration of the brand

SUMMARYØAmerican Express is known globally for its charge cards,

travel services and financial servicesØThe Amex brand is synonymous with prestige, trust, status

symbol, success and achievementØIt faces the most competition in credit and charge card

business from Visa and MasterCardØRecently, it has expanded its consumer base from wealthy

and low-risk consumers to the middle-income groups

DISCLAIMER Created by Vinshu Jain, NSIT, during a marketing

internship by Prof. Sameer Mathur, IIM Lucknow