A Marketing StrategyAmerican Express

VIKRAMADITYA MURALIDHARAN ROLL NO. 37

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table of contents

TOPIC PAGE NUMBER

Introduction 2

Marketing the American Express Blue Card

3

Marketing mix 9

Additional P's used by Ammex 16

Conclusion 19

Bibliography 20

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introduction

American Express originated in the American Wild West. The Company was

established in 1850. Its founder Henry Wells was involved with Wells Fargo and the Pony Express. The business of American Express was driven by the need for safe and speedy transportation of goods, valuables, bullion and bank remittances.The American Express Charge Card was launched in 1958. This now famous green card granted its holder membership of an exclusive club. In 1970 the company became involved in the corporate card market. Since then it has continued to widen the range of travel and financial services provided

Consumers today are turning to plastic money in place of hard cash. It is more convenient and safer than carrying cash. The main forms of plastic money are credit cards, charge cards and debit cards.

Credit cards are issued by financial institutions to people who have accounts with them. The most well known credit cards are Mastercard and Visa and increasingly American Express. American Express only entered the credit card, as opposed to the charge card market, recently. Credit cards may be used to make purchases in outlets such as hotels, restaurants and garages displaying their signs.

Using a credit card is a form of buying on credit. At the end of each month a

statement is sent to the cardholder showing their transactions for the previous month and the amount due. Normally if the bill is settled within a further 3-4 weeks there is no interest charged. Interest is charged on any amounts outstanding after this period. Generally there is no annual fee for having a standard card. Charge cards, such as those issued by American Express and Diners Club, are similar to credit cards but there are a number of differences. There is a yearly membership fee and the full amount due must be paid when the statement is received. There is no interest charged on the account.

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Marketing the American Express Blue Card.

Marketing is the process of assessing customer needs and providing products and services to meet them. A marketing strategy is the means by which this is achieved.

It involves a number of different stages.

• Analyzing the market

• Carrying out market segmentation

• Selecting a target market

• Finding an unique selling point

• Undertaking market research

• Deciding on the marketing mix

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The Market

The potential market in India for credit cards is all creditworthy adults with bank accounts and the necessary income to fund a card. Of these only a certain proportion use or wish to use credit cards.

Competitors are also in the market vying for these same customers. The Indian Banking system had many reasons for American Express to Come in.

The credit card system in Indian is not on a very large scale as compared to America or the UK, but it is still growing. Compared to the other service providers and banks in the market American Express has yet to make a major mark. But Ammex " American Express" is one of the very few A-listed Banking Companies that have their own card and service provider unlike Visa and Mastercard and other banks that use their services.

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The Market

The card had a proven demand and success based on its earlier launch in the UK and other markets. Many American Express charge card holders wanted the additional flexibility of a credit card.

There was huge potential in the Indian Market for a product which was different and provided value for money. It provided the marketplace with a third exclusive brand option i.e. American Express versus Visa and MasterCard.

Indians today have become very global and also are looking for exclusivity. American express gives them this with an excellent brand value and satisfaction.

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Market Segmentation

Because the buyers of goods are not identical the market must be broken down into different segments in a process called market segmentation.

Each segment contains consumers with similar characteristics. A target market or segment is then chosen. Advertising and other promotions are then aimed at these potential customers

Target Market

It was decided to target consumers with the following characteristics:

• 25-45 years old

• young educated with a salary Rs. 12,00,000 +

• a high disposable income and enjoy spending on luxuries

• tendency to be upwardly mobile

• confident, innovative and trendy

• have busy lives

• work to live rather than live to work.

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USP

For consumers to identify and buy a product it must have a unique selling point(s) to make it stand out from competing products. For the Blue Card the USP is the 1% cash back on all purchases plus a degree of exclusivity with the American Express name.

The American Express name by itself is desirable product and when you are associated with American Express you automatically have a good feeling about yourself.

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Market Research

There are two main areas of research, Desk research and Field research.

Desk Research

Is carried out without leaving the office. It involves using the information gathered by someone else. The main types used are publications, state agencies, reports and the internet. It is also called secondary research.

Field Research

Is where the information is gathered by going out into the marketplace. The main forms used are surveys, interviews and observation. Research can be structured to suit the particular purpose and it is easier to judge the accuracy of the results. It is also known as primary research

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Marketing Mix

1. Place

2. Product

3. Price

4. Promotion

5. People

6. Process

7. Physical Evidence

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Place

This is the means of distributing a product or service. The product is distributed through American Express itself. Unlike the other banks that issue the card and use either visa or mastercard as a service provider. Ammex doesn't believe in mass advertisement of its card. It is a very exclusive product and it either gets in touch with people through that account balance info, credit history or they approach MNC's as they prefer High Net Worth Individuals.

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Product

This is the product or service provided to meet the particular market segment. The Blue Card is an exclusive credit card emphasing a “do more” philosophy. The advertising and communication strategy was aligned in ‘Look and Feel’ to the younger segment and the specific features built into the Blue card.

The Blue card is like a Titanium card for the younger generation. It follows the same tradition and system.

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Price

This is the price at which the product is sold. Different price strategies may be used. Among these are

Cost Plus Pricing: The firm calculates the cost of the product. It adds a mark-up or profit margin to get the selling price. This method ensures costs are covered.

Price Skimming: Consumers are charged a high price. It is normally used when a new product has been developed and the firm wants to recoup the high development costs e.g. new computer games. Penetration Pricing: A firm entering a new market may undercut the price charged by existing firms in order to get a foothold in the market, for example, new mobile phone companies entering the Irish market.

Competitive Pricing: A firm charges a price that gives it a competitive advantage over its competitors. This was the option chosen for the Blue Credit Card. A competitive interest rate was chosen with a special introductory offer to entice new customers. In addition, customers get a 1% cash back on all purchases and no annual membership fee is charged.

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Promotion

• American express doesn’t use any extensive promotion. They mainly target a few influential people who then spread the word around.

• India they have a few TV commercials and promotions with luxury brands and hotels.

• We accept American Express is the most common tag-line.

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People

American Express employees staff that are well trained in both the banking and luxury world. They lay a lot of importance on the convincing capability of their staff. The job of the staff is to :-

1. Identify high net worth individuals

2. Inform them about the Blue Card

3. Market the card as an asset

4. Tell them about its benefits

5. Close the deal.

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Process

American express is luxury banking. They have dedicated services line for their high up users and also personalized services are provided to them.

Each premium customer has a separate 24 by 7 number which they can call for any assistance that is needed by them. Ammex believes so much in exclusivity that the customer help address the client by his name and they build a very friendly relationship.

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Physical Evidence

American express gives that Royal feeling to its clients which they look for. When a individual joins with American Express they look for opulence and the respect that comes with it.

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Additional P’s used by American Express

1. Purpose

2. Packaging

3. Personal relationships

4. Persuasion

5. Proactive

6. Pleasure

7. Psychology

8. Partners

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Purpose

To be the High End Luxury service provider to the Indian credit card systemTo attain a good market share of the elite society

Packaging American Express believes not only in the product but in the way it is presented to its clients. They have a motto that a product is already sold of it is packaged well.

Persuasion American express has dedicated service line that constantly are in communication with their proposed client list.Their job is to close in and they do it in a very natty manner which makes the client that they deal with eventually sign up with them

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Proactive Since American Express aims to be a luxury brand, their name is everything for them. As I had mention earlier that they had dedicated customer care for their segmented clients.

They are very particular on the time they take to respond and resolve any issue that arises from their end.

Pleasure American Express has a lot of High end reward systems that they offer to their clients. The way their reward point manual is posted to their clients home shows their concern.

Psychology They use psychology marketing. Which makes it a desirable product which everyone wants but only a few can get.This helps them as they create an inner feeling among people to work hard for the card rather than they working hard to get people to take the card.

Partners American express has many tie-ups:-

• Priority pass• Taj • Kingfisher• Bally• ITC

Also this is the only card where u can swipe and buy yourself a private jet.!!

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CONCLUSION

American express has one motive for their marketing strategy. That is to be amongst the rest but not to be like the rest. Their aim and strategy emphasizes this.

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Bibliography

• http://www.learnmarketing.net/servicemarketingmix.htm • http://www.americanecpress.co.in • http://businesscoaching.typepad.com/the_business_coaching_blo/

2009/02/marketing-mix-how-many-ps-in-marketing.html