case analysis

American Express Gets Specific and Asks,˜Are You a Card member? What do Robert DeNiro, Ellen DeGeneres, Tiger Woods, Kate Winslet, and Laird Hamilton have in common? Let’s see Robert DeNiro is one of the greatest living actors, Ellen DeGeneres is a famous comedienne, Tiger Woods is arguably the best golfer ever, Kate Winslet is a multiple Academy Award nominee, and Laird Hamilton is perhaps the greatest surfer who ever lived. However, being famous and best in their fields are not the only things these folks have in common. They also all carry the American Express credit card and have appeared in television or print commercials to promote the card in the company’sœMy Life, My Card campaign. The fast pace of today’s busy lifestyles and the rapid changes in information technology mean that, more than ever, companies like American Express have to rely on the familiar faces of celebrities to get its messages across. In late 2004, American Express started to feature famous and recognizable people as attractive spokespersons in theœMy Life, My Card advertising campaign in an attempt to capture the attention of current and potential consumers. Each of the AMEX ads included brief biographical information on the celebrity, such as where they live, profession, greatest triumphs or greatest disappointments, and basic philosophy on life. The final point of each ad showed how the American Express card helps enable individuals to pursue what is important to them. American Express sought to communicate to its current and potential customers that they are just like these celebrities simply trying to live life at its best. So, the slogan ofœMy Life, My Card was perfect for the ad campaign. Consumers loved the ads. Unfortunately for American Express, itsœMy Life, My Card advertising campaign had some serious competition. Visa had been running ads for some time with the slogan ofœLife takes Visa, which is a clever variation on Amex’s campaign theme. American Express’s other main competitor, MasterCard, was using itsœPriceless-theme commercials that are aimed at encouraging customers to use the card to create priceless moments. In the end, however, theœMy Life, My Card campaign, while well-liked, really wasn’t working. Measures of customer loyalty showed that American Express was first in its product category in 1997, but by 2007, the American Express card was fifth, trailing Discover, Capital One, Visa, and MasterCard. So in 2007, American Express replaced itsœMy Life, My Card ads with a campaign that presented a product-oriented approach rather than the general image-oriented one. New ads asked consumers the question,œAre you a card-member? Historically, American Express has not switched campaigns quickly. TheœDo you know me? campaign ran from 1974 to 1987 and is still a well-known advertising saying.œMembership has its privileges was used from 1987 to 1996, and theœDo More campaign ran from 1996 to 2004. With only three campaigns in thirty years, how could consumers respond to this quick change of focus? Was American Express risking confusing consumers about American Express’s positioning? And what if the newœAre you a card member? campaign didn’t improve loyalty ratings. Should American Express move quickly to develop still another new campaign or stick with this one? Sources: Brian Steinberg,œNow Showing: Clustered Ad Spots on Television, The Wall Street Journal, February 15, 2006, B3; Business Wire Inc.,œAmerican Express Launches the Restaurant Partnership Program with Savings, Access and Information, Business Wire, June 8, 2006;œAmerican Express Gets Specific and Asks,˜Are You a Card member?’ New York Times, April 6, 2007. Note: Use the posted template to analyze the above case then answer the following four questions separately. Questions 1. Describe the advantages American Express will gain by using celebrities to advertise its card products. 2. Analyze the component of the adverts and state its major selling strategy. 3. Illustrate the challenges which my life my card advert faced and explain the strategy which Amex used to overcome the challenge. 4a. Distinguish between product-oriented and image oriented advert. 4b. In your opinion assuming the new advert which ask customersœAre you a card member fails, what decision should American Express take?