Marketing Mix Of American Express and 7Ps (Updated 2024)

The Marketing mix of American Express analyses the 7Ps of American Express, which includes the Product, Price, Place, Promotion, People, Physical Evidence, and Process of American Express. American Express is a public company in the financial services industry, founded in 1850 in Buffalo, New York, USA. It has its headquarters in New York City. Kenneth Chenault is the company’s Chairman and CEO at present. The company offers services like finance, various insurance products, and travel.

Its various network services’ main products are charge cards, credit cards, and traveler’s cheques. Out of the total volume of credit card transactions (in $) in the US, approximately a quarter is the share of American Express cards. It was listed as one of the financial institutions in the top 20 most admired companies by Fortune. It’s the 4th largest card network in the world based on number of cards in circulation. Its primary competitors are Visa and Master Card.

About American Express

• Type: Financial services company
• Industry: Payment services
• Founded: 1850
• Founders: Henry Wells, William Fargo, and John Butterfield
• Headquarters: New York City, New York, United States
• Area served: Worldwide
• Key people: Stephen Squeri (Chairman) and Stephen Squeri (CEO)
• Number of employees: 67,000

American Express Product Strategy

The company offers various card services in the US to high-end consumers and small businesses. International card services like American Express make my trip credit card in India and American Express Aeroplan Plus reserve card in Canada. The famous cards are Green, Gold, and Platinum charge cards. American Express’s corporate meeting card online services allow us to track, analyze, and improve meeting expenditures.

The Product Mix of American Express in 2024 is as follows (Source)

1. Credit Cards: American Express is widely known for its range of credit cards, catering to various consumer and business needs. These credit cards have different features, rewards programs, and benefits, such as cashback, travel rewards, and premium concierge services.
2. Charge Cards: Amex also offers charge cards, which require cardholders to pay their balances in full each month. These cards often come with premium benefits, including travel insurance, airport lounge access, and purchase protection.
3. Small Business Solutions: American Express provides financial products and services tailored to small businesses. This includes business credit cards, expense management tools, and business loans.
4. Corporate Cards: American Express offers corporate payment solutions for businesses, helping them manage expenses, streamline payment processes, and gain insights into corporate spending.
5. Travel Services: Amex provides various travel-related services, including travel booking platforms, travel insurance, and membership programs that offer exclusive travel benefits and access to airport lounges.
6. Merchant Services: American Express offers payment processing services for merchants, allowing them to accept Amex cards as payment. This includes point-of-sale terminals, online payment solutions, and reporting tools.
7. Savings and Investments: Some American Express products include savings accounts, certificates of deposit (CDs), and investment options, allowing customers to grow their wealth and save for the future.
8. Personal Loans: American Express may offer personal loan products to eligible cardholders, providing access to additional financing for various purposes.
9. Financial Planning and Advisory: Amex provides financial planning and advisory services, helping customers manage their finances, plan for retirement, and achieve their financial goals.
10. Gift Cards and Prepaid Cards: American Express issues gift and prepaid cards that can be used for shopping or gifting purposes. These cards are convenient alternatives to traditional gift certificates.

American Express Pricing Strategy

In the US, most businesses accept the American Express card, but some merchants don’t accept it as it charges slightly higher acceptance and merchant fees. American Express charges around 3% of the sale to the retailers, and its competitors, like VISA and Master Card, charge around 2% on average. This is because of the difference in American Express’s business charge and credit card model: they make money from swipe fees charged to the merchants and the annual fees charged to the customers, and credit cards have minimal interest income. However, the reward points that customers get for spending are beneficial.

The average charge or annual fee charged by American Express cards is $50-$500, which in promotional offers is waived off for the first year, whereas VISA charges $500, and some of its cards have no annual fee.

Here’s an analysis of American Express’s pricing strategy here:

1. Annual Fees: American Express often charges yearly fees for many of its premium credit and charge cards. This fee structure aligns with its positioning as a provider of exclusive, high-value services. Cardholders are willing to pay these fees for access to premium benefits, such as travel rewards, airport lounge access, and concierge services.
2. Tiered Card Offerings: Amex offers a tiered range of cards, from basic to premium, with varying annual fees and benefits. This tiered approach allows customers to choose the card that best matches their needs and spending habits. It also enables American Express to capture a broad range of customers, from cost-conscious individuals to high-end travelers and business professionals.
3. Membership Rewards Program: American Express operates a loyalty program called Membership Rewards. This program rewards cardholders with points for their spending, which can be redeemed for travel, merchandise, gift cards, and more. The perceived value of these rewards encourages cardholders to continue using their Amex cards, offsetting the annual fee.
4. Interest Rates: American Express offers a range of interest rates on its credit cards, typically with higher rates for revolving credit balances and lower rates for charge cards. The company’s pricing strategy aims to cater to customers with varying credit profiles while ensuring profitability.
5. Introductory Offers: Amex often provides introductory offers, such as welcome bonuses or 0% APR for a limited period, to attract new cardholders. These promotions incentivize customers to choose American Express and experience the benefits of their cards firsthand.
6. Merchant Relationships: American Express negotiates fees with merchants for card acceptance. While this is not a direct cost to cardholders, it can indirectly impact pricing as these fees may influence the availability of specific rewards and discounts at participating merchants.
7. Transparent and Clear Pricing: American Express emphasizes transparency in its pricing. Cardholders are provided with clear information about annual fees, interest rates, and other charges, contributing to a sense of trust and fairness.
8. Exclusive Offers: Amex frequently partners with merchants and service providers to offer exclusive discounts and benefits to cardholders. These exclusive perks enhance the perceived value of American Express cards and incentivize card usage.

American Express Place Strategy

The company provides value to its cardholders through innovative approaches, saving the customers time and money. The membership reward program allows mid-market companies to achieve easier compliance and better savings and enjoy several benefits. Corporate MR points can be redeemed for cash back and directly benefit the business. They convert the data into usable information for corporate customers and hence help them manage their expenses and improve business efficiency. They have the most extensive integrated global platform, which gives them a competitive advantage and an edge over their competitors.

Here’s a place strategy for American Express:

1. Global Network of Merchants: American Express has established a vast global network of merchants that accept Amex cards as payment. This extensive acceptance network ensures that cardholders can use their American Express cards at various businesses, including restaurants, retailers, and service providers, both domestically and internationally.
2. Online and Mobile Presence: American Express offers a robust online and mobile platform for cardholders to manage their accounts, make payments, and access exclusive offers and benefits. This digital presence enhances accessibility and convenience for customers, allowing them to engage with Amex services from virtually anywhere.
3. Customer Service Centers: American Express operates customer service centers worldwide, assisting cardholders, answering inquiries, and addressing concerns. These centers serve as essential customer touchpoints, offering support and guidance in multiple languages and time zones.
4. Financial Advisor Network: American Express has a network of financial advisors and planners for customers seeking financial planning and advisory services. These professionals work closely with clients to provide personalized financial guidance and solutions.
5. Exclusive Access: American Express provides exclusive access to events, experiences, and airport lounges for select cardholders. This strategy enhances the perception of value associated with Amex cards and creates unique, memorable customer experiences.

American Express Promotion Strategy

Brand marketing focuses on trust, security, personalized experience, and service. American Express’s Small Business Saturday is an excellent example of how they value branding and customer experience as they have created customized customer experiences. Their brand advocates belonging to a community of individuals with specialized services.

People using American Express cards are more satisfied with certain aspects of customer loyalty programs than others, as you enjoy further reward points on big-ticket purchases like airline tickets. The company’s business growth outlook reflects that it’s meant for the classes, not the masses.

American Express, aka Amex, needs no promotion, given it is not for every Tom, Dick, and Harry; one needs to have an exceptional portfolio to own a product from the house of American Express. One can never identify a marketing or advertising campaign run by American Express. The promotion and distribution strategy of American Express is like those of secret services, where they do not reveal much but are never out of demand.

Some Recent Video ads and Print ads of American Express are:

American Express People Strategy

When discussing the “People” element of the service marketing strategy mix for American Express, you’re focusing on the employees, customer service, and overall customer experience, which are crucial for a service-oriented company like American Express. This element is essential in differentiating a brand in the market, especially in financial services, where customer trust and service quality are paramount. Here are some points to consider:

1. Highly Trained Staff: American Express is known for its investment in employee training and development. This ensures that their staff is knowledgeable about the company’s products and services and can provide high-quality customer service.
2. Customer Service Excellence: American Express is known for providing exceptional customer service. This includes 24/7 customer support, personalized services for card members, and dedicated account managers for corporate clients.
3. Employee Empowerment: Employees at American Express are empowered to make decisions that can immediately resolve customer issues. This approach improves the customer experience and boosts employee morale and job satisfaction.
4. Brand Ambassadors: Employees, especially those in customer-facing roles, are considered brand ambassadors. Their professionalism, behavior, and service quality directly impact American Express’s brand image and customer perceptions.
5. Customer-Centric Culture: The company culture at American Express is intensely customer-centric. It prioritizes customer needs and feedback and continually strives to improve the customer experience based on this input.
6. Diverse and Inclusive Workforce: American Express focuses on creating a diverse and inclusive workplace. This diversity is a strength that brings different perspectives and enhances creativity and innovation in customer solutions.
7. Reward and Recognition Programs: American Express has reward and recognition programs to motivate its people and acknowledge their efforts. These programs are designed to appreciate outstanding customer service and innovations in enhancing customer experiences.
8. Community Engagement: Employees are encouraged to engage with the community through corporate social responsibility (CSR) initiatives. This helps build a positive brand image and instills a sense of pride and belonging among employees.
9. Leadership and Development Opportunities: American Express provides its employees with various leadership and development programs. This is aimed at career growth and developing future leaders within the organization.
10. Technology and Tools: American Express invests in advanced technology and tools to support its people in delivering excellent service. This includes CRM systems, data analytics, and mobile applications that enable employees to offer personalized and efficient service to customers.

American Express Process Strategy

The “Process” element of the service marketing mix for American Express encompasses the procedures, exquisite policies, mechanisms, and flow of activities consumed by services. This is critical for ensuring customer satisfaction and efficiency in service delivery. Here are some key points to consider when discussing the process of American Express:

1. Application Process: American Express has streamlined the application process for new accounts and credit cards, making it easy and user-friendly. This process is designed to be quick, with immediate feedback or short waiting times for approval decisions.
2. Transaction Processing: The company uses advanced technology to ensure fast, secure, and reliable processing of transactions. This includes using encryption and fraud detection systems to protect customer information and prevent unauthorized transactions.
3. Customer Service Channels: American Express offers multiple customer service channels, including phone support, email, social media, and live chat. This ensures that customers can choose their preferred method of communication for assistance.
4. Online Account Management: Customers can access online platforms and mobile apps to manage their accounts, view transactions, make payments, and access services anytime, anywhere.
5. Dispute Resolution Process: American Express has a transparent and efficient handling of disputes and complaints. This includes investigating charges, communicating with the customer, and promptly resolving issues.
6. Customized Services: The process includes offering personalized services to meet the diverse needs of customers, such as different card types for individuals, businesses, and corporations with varying benefits and rewards programs.
7. Feedback Mechanisms: There are established mechanisms for collecting and analyzing customer feedback. This feedback is used to improve service delivery and customer satisfaction continuously.
8. Membership Rewards Program: The process of earning and redeeming points is straightforward and user-friendly, encouraging customers to take advantage of the rewards program.
9. Security and Privacy Measures: Processes are in place to ensure the security of customer data and transactions, including compliance with regulatory requirements and industry standards for data protection.
10. Continuous Improvement: American Express regularly reviews and updates its processes to incorporate new technologies and innovations to enhance customer experience and operational efficiency.

American Express Physical Evidence Strategy

The “Physical Evidence” component of digital marketing and the service marketing mix for American Express involves the tangible and intangible elements that customers experience and associate with the brand. Despite being a financial services company where many interactions are digital, physical evidence plays a crucial role in shaping perceptions and reinforcing the brand’s value proposition. Here are some key points to consider:

1. Branding Materials: The American Express logo, color scheme (notably its distinctive blue), and design elements found on cards, marketing materials, and communications. These elements help to create a recognizable and consistent brand image.
2. Credit and Charge Cards: The physical cards are a primary form of physical evidence. The design, quality, and variety of cards (e.g., Gold, Platinum, Centurion) convey exclusivity, prestige, and a sense of belonging to the cardholders.
3. Official Website and Mobile App: The design, usability, and functionality of the American Express website and mobile application provide a digital form of physical evidence. These platforms reflect the company’s commitment to technology, security, and customer service excellence.
4. Customer Service and Interaction Points: The professionalism, attire, and behavior of customer service representatives, whether in person or through digital channels, serve as physical evidence of the brand’s service quality and values.
5. Statements and Correspondence: Printed or digital statements, letters, and emails are designed with brand elements and are part of the customer’s regular interaction with American Express. These communications’ clarity, quality, and design reflect the company’s attention to detail and commitment to transparency.
6. Exclusive Events and Experiences: Access to special events, experiences, and offers exclusively for card members can serve as physical evidence. These experiences, often associated with luxury and high quality, enhance the perceived value of being an American Express cardholder.
7. Merchant Signage: The American Express logo signals acceptance and partnership at merchant locations. This visibility reinforces the brand’s presence and acceptance worldwide.
8. Membership Rewards and Benefits Literature: Materials detailing rewards, benefits, and membership privileges provide tangible evidence of the value proposition offered to American Express customers.
9. Corporate Social Responsibility (CSR) Initiatives: Physical evidence includes the company’s involvement in social causes, community projects, and sustainability efforts. These initiatives reflect the brand’s values and commitment to social responsibility.
10. Office Buildings and Customer Service Centers: The design, location, and upkeep of American Express offices and customer service centers contribute to the company’s professional image and physically represent the brand.

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