American Express began as an express shipping company in the 19th century and created the first internationally accepted traveler's check in 1891. It evolved into a global payments company, issuing its first charge card in 1958. By the 1960s and 1970s, Amex's charge card business comprised one-third of its total profits and it increased its marketing efforts. Amex positioned itself as a prestigious brand with a focus on trust, security, customer service, and integrity. It maintained an exclusive image and called its customers "card members." While in direct competition with Visa and MasterCard, Amex differentiated itself by issuing its own cards and prioritizing fees and payments processing over transaction volumes.

2. Brief Description
• 19th century express shipping company.
• In 1891, created the first internationally
accepted ‘Traveler's Cheque’.
• Grew into a travel services company.
• Evolved into a global payments company.

3. • Issued first charge card
in 1958.
• In 1967, one third of
the total profit came
from its charge card
business.
• During 60’s and 70’s
Amex stepped up its
marketing efforts.

5. Brand Positioning
• Brand images :- prestige, trust, security,
customer services, international acceptability
and integrity.
• They collect a higher annual fee.
• A status symbol.
• Cardholders are called ‘Card Members’.
• Maintains an elusive image.

6. In direct competition with Visa and MasterCard.
Comparison With Competitors
Points of Parity :-
• All have charge cards
• Used for travel and
entertainment
• Annual fees
• Must payoff entire
balance monthly
Points of Difference :-
• Issues its own cards
• Finances payments and
processes the transfers
• Make most of their
money from internet
and fees

8. Establishing Brand Positioning
• Has spearheaded some brilliant ad campaigns.
• Their now famous catchphrase ‘Don’t Leave Home
Without It’ created by Ogilvy & Mather was run in
1970’s as a “synergy” tagline.
• Collaborated with celebrities to promote their cards
in the “Are you a card member” ad campaign.
• To communicate the transformation, the company
launched a corporate ad campaign called ‘Do More’.

9. • Positioning and branding a small business
is tough.
• Amex responded to pressure.
• Rebranded its Small Business Services
Division.
• Called it OPEN: The Small Business
Network.
• Provided consumers with great benefits.

11. Brand Differentiation
Means of brand differentiation :-
• Image Differentiation
• Service Differentiation
• Channel Differentiation

12. Image Differentiation
• Amex appeals equally to various classes of
consumers.
• Centurion Black card for the Prestige users
who require a concierge service.
• Blue card for tech-savvy young users.

13. Service Differentiation
Amex provides :-
• Luggage insurance with no fee cards
• Car rental protection against theft and damages
• Brilliant reward system
• Roadside service
• Option of purchasing additional travel and medical insurance
• Fraud protection
• Account alerts
• Concierge services

14. Channel Differentiation
They have ties with :-
• Airlines
• Hotels
• Universities
• Theme Parks

15. Q) Evaluate Amex in terms of its competitors :-
• In 3rd position
• Well positioned because of strong global
presence.
• Most competition is faced from transaction
volumes of its competitors.
• Clients are primarily banks and financial
institutions.

16. Q) Evaluate Amex’s integration of its various
businesses :-
• The company’s business units should go back to
paying balance off from month-to-month payment.
• Should target the wealthy and low-risk consumers.
• Should maintain a good service and provide benefits.
• Should offer more benefit to those who paid off their
balance.
• If American Express was to go back to paying off the
balance, they will be able to rely on their clients to
pay their balances before using their cards.

17. Q) Discuss Amex’s decision to grow beyond its
core affluent consumer base :-
• Will gain more consumers, but might face issues that
might spoil the brand name.
• Opening up to only wealthy customers; might be
viewed as being biased.
• Concentrating on the affluent customer base will
result in having very few consumers.

19. Summary

21. Disclaimer
By :- Shomik Biswas, Jadavpur University,
During an Internship under,
Prof. Sameer Mathur, IIM Lucknow