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 worlds 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 companys total profit came from its charge card businesses, and the AmEx card surpassed the Travelers Cheque to become the companys 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 Dont 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 MasterCards 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. Theyre characterized by a shared mindset; they live and breathe the business theyre in. We think its 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 worlds 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 taglineAre 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 Expresss financial results. The companys 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 20052007. 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 Expresss 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 companys 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 companys 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.