Page 319 - Marketing Management

296 PART 4 BUILDING STRONG BRANDS

Marketing Excellence printed the year they became members on their cards,
suggesting membership in a club. It maintained this elu-
sive image through its advertising, impeccable customer
>>American Express service, and elite promotions and events.
During the 1980s, American Express expanded into
a variety of financial categories, including brokerage
services, banking, and insurance, by acquiring a num-
ber of companies such as Lehman Brothers Kuhn Loeb
Inc. and E. F. Hutton & Co. It encountered difficulty inte-
grating 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 finan-
cial services. In addition, American Express increased
the number of merchants that accepted its cards,
adding Walmart, and developed new card offerings, in-
cluding co-branded cards. To communicate the trans-
formation that had taken place during the 1990s, the
company launched a corporate ad campaign called,
American Express is one of the world’s most re- “Do More.”
spected brands, known globally for its charge cards, American Express also responded to Visa and
travel services, and financial services. American MasterCard’s increased pressure in the mid-1990s by re-
Express began as a 19th-century express shipping branding its Small Business Services division as “OPEN:
company, grew into a travel services company, and The Small Business Network” and adding benefits such
eventually evolved into a global payments company as flexible payments as well as special offers, partner-
associated with brand images such as prestige, trust, ships, and resources for small businesses. John Hayes,
security, customer service, international acceptability, chief marketing officer for American Express, explained
and integrity. the rationale behind developing a separate small business
American Express created the first internationally brand, “Small business owners are fundamentally different
accepted “Travelers Cheque” in 1891, which used the from people who work for large companies. They’re char-
same signature security system and exchange rate acterized by a shared mindset; they live and breathe the
guarantees employed today. American Express issued business they’re in. We think it’s important for this area to
its first charge card in 1958 but collected a higher an- have its own identity.”
nual fee than its competitors to create the feeling of At the turn of the century, American Express intro-
prestige and membership. A charge card requires that duced two revolutionary new credit cards, Blue and
customers pay off outstanding balances, unlike the re- Centurion Black. Blue contained a chip that enhanced
volving debt possible with credit cards. By 1967, one- Internet security and targeted younger, tech-savvy con-
third of the company’s total profit came from its charge sumers with a hip image and no annual fee. The Black
card businesses, and the American Express card sur- Card, on the other hand, targeted the most elite clients,
passed the Travelers Cheque to become the company’s who spend more than $150,000 annually and desired
most visible symbol. amenities such as a 24-hour personal concierge service
In the 1960s and 1970s, American Express stepped and invitations to exclusive events. The company also
up its marketing efforts in response to strong competition continued to expand its Membership Rewards program,
from Master Charge (now MasterCard) and BankAmericard which at the time was the world’s largest card-based re-
(later to become Visa). Ad agency Ogilvy & Mather created wards program. This allowed cardholders to redeem
the now-famous “Don’t Leave Home Without It” in the early points for travel, entertainment, gift certificates, and other
1970s as a “synergy” tagline. In 1974, the now-familiar predetermined offerings.
blue-box logo first appeared, with the words American Visa turned on the pressure by taking ownership of
Express printed in white outline over a square blue the latest consumer trend, check cards, which were
background. debit cards that subtracted money for purchases directly
Many perceived American Express cards as a from a cardholders’ bank account. MasterCard surged in
status symbol signifying success and achievement. The popularity as well when it created the “Priceless” ad cam-
company called its cardholders “card members” and paign, which became a ubiquitous pop culture reference