American Express Case Analysis

Register to read the introduction… The customer can earn more points by spending at the participating establishments, but all the points are worth the same. Like many competitors, points can be redeemed for gift certificates to restaurants, theaters, and many other establishments. The amount points earned is clear because it is displayed on the credit card statement monthly, and can be looked up on an on-line account. What the points can be redeemed for is not entirely clear. American Express gives examples of items that can be earned with the points, but doesn't connect any actual value to the items. If the offer was more clear it might motivate more potential customers to actually apply for the card. Place and Promotion American Express uses a horizontal marketing system with the restaurants and night clubs that it partners with to offer the rewards of the IN cards. The partners must allow their customers to use American Express credit cards, and also redeem the credits they earn. Just as American Express promotes these those places for their own customers to shop, eat and spend at. Promoting these new cards is a challenge, as it is for any new product. American Express has used Direct Marketing to reach many of its customers. Potential customers in or near the target cities receive offers in the mail to apply for the card. With the Sales Promotion of 0% APR for transfer balances, new customers are offered an incentive to switch from another credit card they may be using. The advertising channels have primarily been radio, which is a good way to hit a target market in a specific location. There has not been advertising dollars spent on television marketing. By excluding this advertising channel, American Express could be missing out on a target market that would be interested in this product. Recommendations American Express IN:LA credit card features many rewards, which target the young social elites of Los Angeles. …show more content…
The participating merchants are up to date and glamorous. These merchants include Whiskey Blue, Roxy Theater, and Sushi Roku. Even though the rewards sound really good, not everyone would be able to enjoy the points accumulated. The list of choices offered may not suit every individual. The points earned may not be sufficient to redeem a gift certificate that would be enough to one of the featured merchants. Thus, American Express should feature a group of merchants that offer less expensive products. Not only would the customers be happy with their points accumulated, they would spend more with their IN credit card. Surely the rewards sound fabulous but cash rebates sound more appealing to some. With a cash rebate, they can choose the places of entertainment of their choice, which may not be a part of the partner list. A competitor, Chase, features "Chase Cash Plus Rewards Card." This card provides a better variety for the customers to redeem their points accumulated. The customers can choose either a cash rebate or they can redeem their points with gift certificates of the more popular stores. These stores include Macy's, Best Buy, JC Penny, Starbucks, and more. Having stores that are more familiar to the customers would be more appealing. There are individuals that would not get the American Express IN:LA credit card because they are not familiar with the featured merchants. Why would they choose a card that accumulates points to places they will never visit? Thus, …show more content…
It seems like the only place you would hear about this card is through personal references or on the radio. American Express has advertised the new card on radio station such as KIIS FM and KBIG. KIIS FM is one of the up to date radio station that reach a large group of Southern California young adults. However, many young adults tend to skip the commercials by changing to another radio stations during commercials time. This really defeats the purpose of playing advertisements on these hip radio stations. American Express should advertise their card through TV commercials. There are more possibilities for a young adult to watch the TV commercials then paying attention to a radio advertisement while driving on the road. With TV advertisements, American Express can utilize exotic colors and flashy lights to grab the viewers' attention. Also, having TV advertisements would set up for future markets in potential