Uploaded by Evan Gadman Chandra

Application Paper

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Evan Chandra
Topic: American Express further emphasizes its luxurious brand positioning through exclusive
events such as the “Platinum House.”
Company
With cards replacing cash more and more due to convenience, the credit card company is a
growing industry. This industry is moving to a digital space as mobile wallets, tap to pay
systems, and QR-based payment systems continue to thrive (Forbes, 2019). In the American
Market, AmEx is one of the four biggest credit card companies with a 23% market share. They
provide mainly credit card services but has diversified to payment solutions and loans and
financing. AmEx enjoys constant growth from year to year. US AmEx cardholders spending
has increased from $708 billion last year to $776 billion this year. By the second quarter of
2019, AmEx made a revenue of $10.84B, an 8.4% increase from the previous year, with a
profit of $1.76B (American Express, 2019).
Principle
To position is to define the marketing mix variables, so that target customers have a clear and
distinctive understanding of what the product does and represents in comparison to
competing products. Perceptual maps can represent positioning after companies choose two
or more dimensions, which are the factors that represent products. To draw the perceptual
maps, companies must determine consumer’s perceptions, identify competitor’s positions,
determine consumer’s preferences then select their position (Grewal & Levy, 2012).
Research
The purpose of positioning is to sustain a competitive advantage. Through the use of multiple
differentiation strategies, companies seek to establish objective, emotional, and symbolic
positioning. Luxurious companies, like AmEx, use the strategy of product positioning and
value proposition to create functional value, “imagined” value, and social value for their
target segment, the upper class (Claudiu-Cătălin , 2014). Companies use high prices because
through increasing prestige and providing high quality products/services, companies can
improve their image. As a result, they can increase market price and demand in the upper
price segments. Demand is formed despite the high prices because wealthy consumers are
willing to pay a significant price not only for quality but also for social differentiation and
social status. With precise segmentation and profit, these luxurious companies can then gain
profit and diversify (Bezrukova & Svichkar, 2016).
Application
AmEx has positioned its prestige as high through the focus of exclusive and consistent
functional characteristics such as rewards. In this scenario, Platinum and Centurion
cardholders are invited to AmEx’s global food cultural event that features Michelin-starred
restaurants and celebrities for meet-and-greet. Other previous exclusive events mentioned
include the “Aspen Food and Wine Festival” and lounges at the Coachella music festival
(Rosen, 2019). By giving high-quality services, AmEx hopes to position at a high price point
and a narrow customer base, while its biggest competitors visa and master card are
positioned for a broader customer base. AmEx’s highly-priced and premier cards continually
attract high-spending customers and counter competition from big bank rivals. After all, 44%
of their costs are for marketing, promotion, rewards programs, and cardmember services,
and this cost is a 9.2% increase from the previous year (Financial Highlights, 2019).
Evan Chandra
Bibliographies
Bezrukova, N., & Svichkar, V. (2016). Price Aspects of Brand Positioning in the Marketing
Activities of Transnational Corporations. Global Management Journal, 8, 101–106.
Retrieved from https://search-ebscohostcom.proxy.bc.edu/login.aspx?direct=true&db=bth&AN=124449558&site=bsi-live
Claudiu-Cătălin, M. (2014). Brand extensions positioning guidelines for competitive
differentiation. Business Management Dynamics, 4(4), 19–26. Retrieved from
https://search-ebscohostcom.proxy.bc.edu/login.aspx?direct=true&db=bth&AN=110238207&site=bsi-live
Financial Highlights. (2019). Retrieved from
https://ir.americanexpress.com/AsReported/Index.
Grewal, D., & Levy, M. (2012). Marketing. New York: McGraw Hill.
Rosen, E. (2019, November 18). American Express Platinum House New York City Pop Up
Over Small Business Saturday. Retrieved from
http://www.forbes.com/sites/ericrosen/2019/11/16/american-express-platinumhouse-new-york-city-pop-up-over-small-business-saturday/#21c476ac6b90.
What Does The Future Hold For The Credit Card Industry? (2019, October 29). Retrieved
from http://www.forbes.com/sites/quora/2019/10/29/what-does-the-future-holdfor-the-credit-card-industry/.
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