Page 320 - Marketing Management

CRAFTING THE BRAND POSITIONING | CHAPTER 10 297

point. However, American Express scored a huge legal Fortune ranked it one of the top 30 “Most Admired
victory against Visa and MasterCard in 2004 when the Companies.” This brand value was a testament not only to
Supreme Court ruled that it could pursue relationships the company’s product and marketing innovation but also
with any and all banks, which technicalities had pre- to its commitment to providing customers with outstand-
vented it from doing before. Over the next three years, ing service at any location in the world at any time of day.
American Express partnered with banks such as MBNA, Today, American Express offers a variety of different per-
Citigroup, UBS, and USAA and increased its card ac- sonal cards as well as small business and corporate cards,
counts from 60 million in 2003 to 86 million in 2007. each with a different level of customer service, fees, re-
American Express introduced two new marketing wards, spending limits, and special access or services.
campaigns in the 2000s. The “My Life. My Card” cam- The company’s five most popular cards from 2009 were
paign in 2004 featured celebrities like Robert De Niro, the Platinum Card, Preferred Rewards Gold Card,
Ellen DeGeneres, and Tiger Woods providing intimate Starwood Preferred Guest Credit Card, Gold Delta
narratives about places, causes, achievements, and avo- SkyMiles Credit Card, and Preferred Rewards Green Card.
cations that were meaningful to them. In 2007, American
Express continued to feature celebrities in its ads but Questions
introduced a new tagline—“Are you a Cardmember?”—
1. Evaluate American Express in terms of its competi-
that acted as more of a call to action to join American
tors. How well is it positioned? How has it changed
Express than its previous, more passive campaign.
over time? In what segments of its business does
Things turned for the worse as the global economy
American Express face the most competition?
collapsed in 2008 and 2009, significantly dampening
American Express’s financial results. The company’s 2. Evaluate American Express’s integration of its various
stock price fell 64 percent in 2008 caused by numerous businesses. What recommendations would you make
problems, including increased default payments, weaker in order to maximize the contribution to equity of all its
billings, and higher credit losses. In addition, many business units? At the same time, is the corporate
analysts agreed the company “grew too fast from brand sufficiently coherent?
2005–2007.” The company had changed its core strategy 3. Discuss the company’s decision to grow beyond its
of targeting wealthier, low-risk consumers with a presti- core affluent consumer base. What did this do for the
gious brand and valuable rewards in order to increase its company and the brand?
total number of card members. Its newer products, which
allowed consumers to carry over a balance and pay only Sources: Hilary Cassidy,“Amex Has Big Plans; For Small Business Unit,” Brandweek, January 21,
2002; American Express,“Ellen DeGeneres, Laird Hamilton,Tiger Woods & Robert De Niro Featured
the interest, came back to hurt American Express’s bot-
in New American Express Global Ad Campaign,” November 8, 2004; “The VISA Black Card:A Smart
tom line during the recession. Strategy in Trying Times,” BusinessPundit.com, December 8, 2008; “World’s Most Admired Companies
Despite these disappointing financial results, 2009,” Fortune, August 5, 2009; “Credit Cards: Loyalty and Retention—US—November 2007,”
Mintel Reports, November 2007; Scott Cendrowski,“Is It Time to Buy American Express?” CNN Money,
BusinessWeek and Interbrand ranked American Express
April 17, 2009; American Express,“Membership Rewards Program from American Express Adds
the fifteenth “Most Valuable Brand in the World” and Practical Rewards for Tough Economic Times,” February 19, 2009.