American Express is known globally for its charge cards, travel services, and financial services. The Amex brand symbolizes prestige, trust, and status. It started as an express mail business in 1850 and launched various financial services over the decades. While it faces intense competition from Visa and MasterCard, American Express has maintained its image of exclusivity through a spend-centric model and closed-loop network. Recently, it has expanded its target market beyond wealthy consumers to middle-income groups.

1. ne 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

2. It started as an express mailIt started as an express mail
business in Buffalo, New Yorkbusiness in Buffalo, New York
in 1850in 1850

3. Launched a money orderLaunched a money order
business in 1882 to expand in thbusiness in 1882 to expand in th
area of financial servicesarea of financial services

4. IntroducedIntroduced Traveler’sTraveler’s ChequeCheque
in 1891, establishing itself as ain 1891, establishing itself as a
truly international companytruly international company

5. Issued the first charge card inIssued the first charge card in
1958, and had one-third of its1958, and had one-third of its
profit coming from charge cardprofit coming from charge card
business by 1967business by 1967

6. Finally evolving into a globalFinally evolving into a global
payments company , offeringpayments company , offering
around 109.9 million cardsaround 109.9 million cards
including consumer, smallincluding consumer, small
business and corporate cardsbusiness and corporate cards

7. But like most successfulBut like most successful
companies, the journey forcompanies, the journey for
American Express hasn’t beenAmerican Express hasn’t been
smooth eithersmooth either

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

9. It was constantlyIt was constantly
subjected to fiercesubjected to fierce
competition andcompetition and
increased pressure fromincreased pressure from
Visa and MasterCardVisa and MasterCard

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

11. Despite all these hurdles,Despite all these hurdles,
American Express successfullyAmerican Express successfully
maintained its elitist andmaintained its elitist and
elusive image, with its cardselusive image, with its cards
being perceived as a statusbeing perceived as a status
symbol signifying success andsymbol signifying success and
achievementachievement

12. A deeper analysis of the company’s Brand Positioning reveals
Brand Mantra
World Class Service
Personal Recognition
Points-of-Parity
Annual Fees
Used mainly for Travel and
Entertainment
Points-of-Difference
Spend-centric model
Closed-Loop Network
Values/Personality
Prestige
Trust
Global acceptability
Visual Identity
Centurion Logo
Sophisticated Design
Well-positioned as a premium company
targeting affluent customers

13. American Express hasAmerican Express has
understood the competitionunderstood the competition
that stands in front of it andthat stands in front of it and
has changed over time byhas changed over time by
providing services suited toproviding services suited to
the middle income groupsthe middle income groups
However, it still faces threateningHowever, it still faces threatening
competition in its credit and chargecompetition in its credit and charge
card businesscard business

14. The company launched a corporate adThe company launched a corporate ad
campaign during the 1990s called “Docampaign during the 1990s called “Do
More” to communicate its expansion andMore” 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 andtravel services , and select banking and
financial servicesfinancial services

15. It adequately and profitably focused on allIt adequately and profitably focused on all
its core competencies, thus maintainingits core competencies, thus maintaining
coherency in its corporate brand, makingcoherency in its corporate brand, making
steady gains in mind and heart share of itssteady gains in mind and heart share of its
customers, and effectively communicatingcustomers, and effectively communicating
its key brand associationsits key brand associations

16. 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-

17. 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

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

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

20. SUMMARY
ØAmerican Express is known globally for its charge cards,
travel services and financial services
ØThe Amex brand is synonymous with prestige, trust, status
symbol, success and achievement
ØIt faces the most competition in credit and charge card
business from Visa and MasterCard
ØRecently, it has expanded its consumer base from wealthy
and low-risk consumers to the middle-income groups

21. DISCLAIMER
Created by Vinshu Jain, NSIT, during a marketing
internship by Prof. Sameer Mathur, IIM Lucknow