Week 3 Marketing Excellences – American Express
BSA 529 Marketing Strategies
September 8, 2014
“American Express’s global card network competes in the global payments industry with other card networks, including, among others, Visa, Diners Club International (which is owned by Discover Financial Services), Discover (primarily in the United States) and JCB and China UnionPay (primarily in Asia). In addition to such networks, a range of companies globally, including merchant acquirers, processors, and companies such as PayPal, carry out some activities similar to those performed by American Express’ GMS and GNS businesses. (American Express). Comparing the results to its competitors, American Express reported a Total Revenue increase in the 2 quarter 2014 by 4.15 % year on year, while most of its competitors have experienced contraction in revenues by -1.81 %, recorded in the same quarter. With net margin of 16.8 %, company achieved higher profitability than its competitors did (American Express) “Brand positioning is the process of creating an image of where your brand sits in the market compared to your competitors. It builds differentiation in the mind, rather than through what you do or make. Brand positioning is most effectively expressed visually, through a tagline or positioning statement. Taglines such as American Express’ Don’t leave home without it, M&M’s Melts in your mouth, not in your hands, Bunnings’ Lowest prices are just the beginning, Apple’s Think different and BMW’s The Ultimate driving machine are all about establishing a clearly defined point of difference for the brand.” (American Express) American Express has positioned itself as one of the most popular and well-respected brands, known globally for its charge cards, travel services, and financial services. Many perceived American Express 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 card, suggesting membership in a club (Kotler & Keller, p.296).
The company changed its core strategy of targeting wealthier, low-risk customers with a prestigious brand and valuable rewards in order to increase its total number of cardholders. Its newer products, which allowed consumers to carry over a balance and only pay the interest, came back to hurt American Express’s bottom line during the recession (Kotler & Keller, p. 296). American Express faces the most competition in the charge and credit card segments of their business. As the company grew, it expanded into a variety of financial categories, including brokerages, banking, and insurance, and by the late 1980s, American Express was the largest diversified financial services firm in the world. The difficulty the company encountered integrating these broad financial services, combined with increased competition from Visa and MasterCard, compelled AMEX to divest many of its financial holdings in the early 1990s and focus on its core competencies of travel and cards. (Adkins, p. 153)
Some recommendations I would like to make in order to maximize the contribution to equity of all its business units. Sell or spin off subsidiaries and refocus on businesses operating under the American Express brand. Broaden its traditional charge card business to include revolving credit, co-branded cards, and other products aimed at specific customer segments, such as students and senior citizens. Expand its global travel network. Began a major expansion of its financial services businesses and introduce new products to its corporate services customers. At the same time, the corporate brand is still coherent.
The new, leaner company focused on its core competence: charge and credit cards, Travelers checks, travel services, and select banking and financial services. In addition, American Express increased the number of merchants...
References: Amercan Express.(2014) Retrieved from http://csimarket.com/stocks/compet_glance.php?code=AXP
American Express. Brand Position. Retrieved from (BRAND POSITIONING\MARKET POSITIONING\BRAND ...) www.mindfield.com.au/solutions/brand-positioning.html Mindfield Grou
Kotler P, & Keller, K.L (2012) Marketing Management (14th ed.) Upper Saddle River,
New Jersey: Pearson Ed. /Prentice Hall
Susan Adkins, Cause Related Marketing, Butterworth Heineman, Oxford: 1999, p. 153.
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