Marketing is an integral part of a company; after goods and/or services have been produced, a company needs to embark on massive selling campaigns using effective combinations of tools of marketing. In the 1970s, American express company had the highest market share in the credit card industry, it leadership in the industry had been attributed to its robust and effective advertising campaigns.
It was using celebrities and well-known people in the society to sell psychologically its products. in 2007 the company position in the market dropped to position five despite its “My life, My card” campaign that had been effective for the last campaigns (Salkind, 2003).
The major competitors that the company had to face were Trailing Discovery, MasterCard, visa and Capital One. This paper evaluated the turn of events as experienced by American Express; it will also recommend the way forward.
The problems of the company
The obvious problem that can be seen in the company is lack of a strong marketing and advertising tool that has resulted to the company loosing the market it had once dominated.
Advertising is part of marketing whereby appropriate strategies are developed and implemented to create awareness and persuade customers to buy a certain company’s product/service; other than developing the advertising strategies to use, a company should understand that there is need for continuous improvement.
The loss of competitiveness that the company is facing can b attributed to obsolete of its marketing/advertising campaign. The company used celebrities like Robert Deniro, Tiger Woods, Kate Winslet and Laird Hamiton; although these people are still prominent, they may have lost the influence they used to have some years back; the method was monotonous
A product has three main stages; introduction, growth, maturity and decline, American Express is in the decline stages. From the 1990s, the company’s products were in the maturity and growth stages were it dominated the market. The emergence of other companies with similar products posed the greatest problem to the company.
Another problem that the company is facing is the lack of aggressiveness, the company was comfortable with the success of “My life, My card” and the benefits it was bringing to the company and forgot to develop the campaigns further to tap emerging trend in the market.
Important factors to consider at this stage
With the declined success of the companies advertising strategy, it offers the company a chance to think of another way of advertising. Before developing another advertising strategy, then it need to take a massive marketing research.
After realizing the deficit in their products if any, then the company should aim at understanding that their competitors are offering over and above what the company is offering. This will help in establishing the gap that American Express cards have over those of its competitors.
With the understanding of the products, the company should then aim at understanding the market segment; to persuade consumers effectively and have a winning advertising campaign, insight customer behaviors need to be understood. Before implementing a particular advertising strategy, marketers are assisted by market research to learn the behavior and attitudes of consumers for better strategies.
This is learnt through an understanding of physiological, political, social, economical and cultural factors that affects the consumers’ behaviors when making a purchasing decision that can be learnt through an aggressive advertising campaign.
American Express competitors, Trailing Discovery, MasterCard, visa and Capital One, have been able to outdo other companies in the industry because of their consistency in strategy development. American Express should go back to its strategies, know the area that it went wrong, and start to improve from there.
Alternative
Alternatives that the company will have will be dictated by the result of the marketing research undertaken; the best alternative will be the one that will offer maximum returns at the minimal cost. Some options that are likely to be available they are:
- If the American Express products were outdated, such that consumers were not getting higher utility; then the company can improve the products and embark on massive advertising campaigns.
- If the competitors are seen to have better products, then the company should aim at improving its technology so as it can offer better services.
- When a company is in the decline stage, there are three main options opened to it; develop a products rejuvenation strategy, stop production or create a niche market by harvesting the product. The research could start by analyzing the effectiveness and responsiveness of its products; an evaluation of whether the products are still wanted in the community should be undertaken.
- If the company’s products are quality and can give high utility to customers, the company should embark on changing is advertising approach and use an approach that will capture the attention of customers.
Knowing and developing the appropriate tools and strategies involves an analysis and research of current market and social developments; with the information at hand, the then the company will develop the appropriate methods of advertising as well as develop an appropriate advertising tool.
Of late, the world has developed in technology, the effects of such technology in advertising is diverse and varies among industries; American Express should develop strategy that can assist it fight its competitors effectively, such tools include social networking’s, the use of online advertisements, direct mobile advertising and brand extension strategies.
An advertising research of an ongoing campaign will assist a company realize the weak points of its processes and devise measures to improve them. At times even after advertising has been launched, it may prove inefficient or need some adjustments.
This can only be learnt through conducting research of both the products and the advertising strategy that the company can adopt. An effective advertising return will offer more channels for the company to use (Block,1999).
Recommendation
In modern fast developing world, technology is creating numerous business opportunities, the credit card industry is fast growing and changing it features to make is more secure, efficient, and reliable and incorporate new features. From American Express history, the company is a sleeping giant that need to be rejuvenated.
The company should improve the credit cards to increase the utility that customers will have. The approach to develop the product is through a robust product research where the company aims at establishing feature that target market want but they are not available with current products.
Conducting an advertising research will be crucial: advertising research aims at assisting the advertising team effectively use available advertising tools for the benefit of the company; it analyzes the target market and the competitors so as it can advise the company on best advertising campaigns.
References
Block, P. (1999). Flawless consulting: A guide to getting your expertise used. San Francisco: Pfeiffer.
Salkind, N. J. (2003). Exploring research. Upper Saddle River, NJ: Prentice-Hall.