ACKNOWLEDGEMENT This project is done as a part of my course .

I am really thankful to our course coordinator Dr Kawal Gill ,Associate Professor, Sri Guru Gobind Singh College Of Commerce, for her invaluable guidance and assistance, without which the accomplishment of the task would have never been possible. I also thank her for giving this opportunity to explore into the real world .

In my present project I have chosen the topicI am also thankful to the persons working in amex especially miss Geetanjali Manhas for providing the data for the project.

INTRODUCTION TO ORGANIZATION STUDY

Introduction

This is an study of American Express Bank Ltd. where its steps to success and market penetrating products has been discussed .

Objectives:

The study has undertaken to get an exposure of actual working environment in an organization. The main objective of the study is to familiarize with the frame work and method of organization working.

1. To know how AMEX works and method adopted. 2. To show up the different product range of AMEX. 3. To know the differentiating features of AMEX products. 4.To know factors behind AMEX success.

Methodology:

Conducting personal interview with all the functional manager departmental head and sales executives. Collect the various data required to the study. Manuals and reports of the company constituted the source of secondary data.

Limitation: The study is limited to the study of whole organization and not on specific department.

1.This study is only subject to an organization and not consist the whole market. 2.The study is time bound and would be applicable to current scenario 3.It is assumed that the information provided by the company is corrected and reference is drawn accordingly.

Chapter1

AMERICAN EXPRESS BANK Ltd.

INTRODUCTION American Express Company (NYSE: AXP), also known as AmEx , is an American multinational financial services corporation headquartered in Three World Financial Center, Manhattan, New York City, New York, United States. American Express Bank has presence in over 150 countries. It is a diversified travel and financial services company. Established in 1850 in New York, American Express Company was among the first and most successful express delivery businesses to arise during the rapid westward expansion of the United States.

American Express India was established in 1921 providing high quality travel and financial services. American Express in India is the largest company to have wide network of travel locations in the country. American Express Travels has entered into a Memorandum of Understanding (MoU) with Department of Post to enable the designated Speed Post offices in distributing and encashing American Express Travelers Cheques.

AMEX Is a diversified Global company providing travel, financial and network services.. American Express is a leading global payments, network and travel company backed by one of the world's most recognized brands. Founded in 1850, the Company serves individuals with charge and credit cards, Travelers Cheques and other stored value products. Through its family of Corporate Card services, American Express helps companies and institutions manage their travel, entertainment and purchasing expenses. As a travel agency, American Express offers travel and related consulting services to individuals of corporations around the globe. The Company also used to provide Banking services to high net worth individuals, retail customers, corporations and financial institutionsAcquired by SCB. American Express began as a freight forwarding company in 1850

Headquartered in World Financial Center, New York, Amex has approximately 60, 500 employees worldwide (as of 2010). Strong revenues, quarter after quarter & year after year (refer next slides) Cards in force worldwide 91.0 million (as of 31st Dec 2010). Features at 88th in the Fortune 500 listing (as of 2010). Nearly a quarter of employees have been with the company for more than 15 years.

Brands live in peoples minds People may not be aware of it, or consciously guided by it, but the brand is there, informing their decisions. The brand is an unspoken covenant, a promise to deliver, an expectation to fulfill. It is an emotional contract that creates a bond with the customer, a relationship. Without this, we start from zero every day. -- Ken Chenault, CEO

Vision To be the worlds most respected service brand.

Promise World-Class Service, Personal Recognition

World Service Mission World-Class Service, Extraordinary People

AMERICAN EXPRESS BANK IN INDIA

American Express Card division tops upon other credit card issue.

Credit and charge cards come in a variety of categories to fit almost all purchasing needs. There are consumer cards, business cards and corporate travel cards. Each type offers a different combination of financial controls, features, options and perks. What they have in common are convenience and flexibility to buy now and pay later, either in full each month or over several months. All cards also come with the responsibility to pay back what you spend according to the cardholder's agreement. Charge Cards Charge cards are a type of credit card that require you to pay the full amount you've charged each month. Credit Cards Credit cards offer a revolving line of credit, meaning that consumers may carry a balance from month to month rather than having to pay the balance in full every month. Each time you use a credit card, you are essentially taking out a loan, and card issuers require that a payment of at least the minimum amount due must be paid by the due date every month. Interest charges typically accrue on amounts charge Rewards Cards Rewards cards come in the form of credit and charge cards and offer consumers extra value for purchases. Rewards include cash rebates, merchandise, airline tickets, hotel stays, and gasoline and gift cards. The way rewards are earned and redeemed varies by product.

American Express Online

American Express is online in the maximum countries out of over 130 countries it has services. The URL of American Express India is as under:

www.americanexpressindia.co.in

VISION & MISSION

VISION

To become the world's most respected service brand.

MISSION

A logical extension of the Vision Statement is the Mission of the Bank, which is to gain market recognition in the chosen areas. To build sizeable markets share in each of the chosen areas of business through effective strategies in terms of pricing, product packaging and promoting the product in the market.

To promote confidence and commitment among the staff members, to address the expectations of the customers efficiently.

Business model

Typical credit card business model When a consumer makes a purchase using a credit or charge card, a small portion of the price is paid as a fee (known as the merchant discount), with the merchant keeping the remainder. There are typically three parties who split this fee amongst themselves:

1. Acquiring bank: the bank which processes credit card transactions for a merchant, including crediting the merchant's account for the value charged to a credit card less all fees.

2. Issuing bank: the bank which issues the consumer's credit card. This is the bank a consumer is responsible for repaying after making a credit card purchase. The issuer's share of the merchant discount is known as the interchange fee.

3. Network: the link between acquiring banks and issuing banks. These banks have relationships with a network, rather than with each other, for fulfilling card purchases. This allows a card issued by a community bank in Peru to be used at a shop in South Africa, for instance, without requiring the banks to have a direct relationship with each other. The two largest networks in the world are Visa and MasterCard. American Express operates its own network.

The average merchant discount in the United States is 1.9%. Of this, approximately 0.1% goes to the acquirer, 1.7% to the issuer, and 0.09% to the network. Most Prime and Superprime card issuers use the majority of their interchange revenue to fund loyalty programs like frequent flyer points and cash back, and hence their profit from card spending is small relative to the interest they earn from card lending

Chapter2

Analysis of Marketing Techniques used by American Express American Express continues to attempt to expand its customer base, while at the same time trying to keep its reputation as a card of status. Its successful marketing tactics in the United States compared to the slow expansion into markets abroad show its lack of consideration of the differences of these markets. By preparing a more decisive plan as to what type of consumers to target and what products to push in each of its market areas, American Express could have a much greater success with foreign expansion.

American Express has been known as a commodity to most business travelers. In order to build its customer base, other consumers need to see the card as an indispensable convenience in their lives. American Express offers convenient methods to obtain account information, pay bills, find discounted products, and even make travel plans via the Internet. The Internet site offers these options, as well as other services, such as on- line help and assistance for small businesses. American Express realizes the need for many consumers to save time and money, but to still feel important and respected. The ingenuity and thought put into the services offered on the web site shows that American Express is genuinely concerned with the satisfaction of its customers. American Express has always been known for its benefits to travelers. Some of the new travel discounts; such as the Bahamas Getaway packages offer significant discounts for planning a vacation in the Bahamas through a travel agent. The catch is that one must charge it on the American Express card to get the discounts. Coupon books that offer discounts at many shops, restaurants and attractions are given to those who buy a package. Over $11 million in Bahama Getaway packages were sold in 1999. Other getaway packages are available to consumers all over the world. American Express has successfully used this marketing strategy, as it realized that consumers want an opportunity to enjoy an exotic vacation, while at the same time, getting value for their dollar. Saving money is important to most consumers. Once again, American Express aims to please its customers. With these successful ventures, it is difficult to imagine that American Express is struggling in many parts of the world. The lack of appreciation and understanding of foreign consumers is the cause. In order to promote its charge card in Japan, American Express has tried to appeal to the elite. But as stated in the Marketing text, its charge card applications are found in the back seats of taxicabs. A more logical approach to soliciting the upper echelon in Japan would be to display applications in elite clubs, or to mail solicitations to high society neighborhoods. Making the application less available to the general public may be more appealing to the targeted market. In Europe, American Express has been limited due to its high merchant fees, making businesses bypass the opportunity to work with American Express.

American Express should offer a trial membership to merchants to entice them into offering consumers the ability to purchase with American Express cards. Possibly offering a discounted fee to new merchants may show the merchant how many new customers carrying the card will shop in the store . After the first year, the company can choose to continue with American Express at the regular fee, or cancel their membership. American Express has a very large customer base that travels. In order to have customers use their American Express card when visiting these merchants, American Express could offer either promotional travel in these areas, or discounts to cardholders that make purchases in these stores. Helping merchants promote their goods on a web site or a travel brochure can also help secure a new merchant. American Express has developed several market areas to increase consumers usage of their card. With more consideration of the needs of merchants and consumers in each of these markets, American Express may be able to better expand its presence in the foreign market. With planning and analysis of what has worked in other markets, as well as what has worked for the competition in each market, American Express could build its merchant and customer bases worldwide.

A recently released survey investigated customer satisfaction of credit card issuers. In this article we'll examine American Express . We'll primarily use the survey to assess the company's product and potential demand for that product. We'll cover the industry and we'll briefly discuss the financials. Survey American Express is number one in customer satisfaction, according to a survey conducted by J.D. Power and Associates. The survey included nearly 14,000 customers. The survey asked customers about their experience with the issuer's terms, billing and payment process, rewards program, benefits and services, ability to resolve problems and accessibility.

Consumers said American Express did the best job in each of the categories. According to customers, American Express really outperformed other issuers in the areas of communicating with customers and offering attractive rewards. If consumers are happy with the product they are likely to keep using it. Further, they are likely to recommend it to their friends. The demand prospects for American Express' service remain solid based on the evidence offered in the survey. Industry American Express is in the credit services industry. Its main competitors are Capital One Financial Corp. and Discover Financial Services. The credit card issuer operates in the financial sector. The credit services industry is cyclical. When the economy is booming consumer confidence increases and people are more likely to borrow and spend. American Express is a mature company that operates primarily in mature markets, although, the company does benefit from sales in growth and less developed markets. There is competition in the card services business, however, the customer satisfaction ranking of American Express suggests the threat of substitute products is less for AXP. The industry has high barriers to entry. Additionally, there is some rivalry as firms seek to offer the best rewards to attract and retain customers. The industry is concentrated with some pricing power. American Express Financials American Express has a price-earnings ratio of 13.34 and a forward price-earnings ratio of 12.01. Price-sales is 1.94 and price-book value is 3.36. The debt-equity ratio is 3.09 and long-term debt to equity is 2.90. The dividend yield is 1.4 percent or about the same rate as the yield on 10-year U.S. Treasury securities. Sales the past five years grew 3.11 percent annually while earnings grew 6.91 percent annually. The pace of earnings growth is expected to accelerate to 10.55 percent. A key statistic for common equity investors is return-on-equity. AXP's return-onequity is 26.5 percent. Also, the operating and profit margin are around 20 percent.

Why American Express Is A Better Buy Than Visa Or Mastercard Over the past year, shares of American Express (AXP) are up 5.4%. While a strong performance, American Express has lagged well behind its largest competitors Visa (V) and Mastercard (MA). Over the past year, shares of Visa are up 27% and shares of Mastercard are up 108%. The chart below shows AmEx , Visa , and Mastercard .

(cnbc) Why Visa & Mastercard have outperformed Visa & Mastercard have shifted focus away from credit cards and onto debit cards. The debit card business has been where much of the growth has come for these companies. Statistics According to creditcard.com:

Visa has issued 397 million debit cards Mastercard has issued 123 million debit cards This compares to AmEx, which does not have a debit card business.

Creditcard.com reports that AmEx has roughly 50 million credit cards in circulation. This compares to 269 million for Visa and 171 million for Mastercard. Another reason why Visa & Mastercard have outperformed AmEx is credit risk. Visa & Mastercard make all of their money on transaction fees. The "credit risk" on Visa and Mastercard cards is taken by banks such as Bank Of America (BAC), Citigroup (C), and JP Morgan Chase (JPM). Contrastingly, AmEx provides credit for its cardholders. This gives AmEx a chance to make money on interest, but it also makes it possible for AmEx to lose money if customers cannot pay. The

economies weakness has made it more difficult for AmEx to make money from the "credit" part of the business. Why Buy AmEx? Valuation

Forward PE Ratio Mastercard: 15.65 Visa: 14.81 AmEx: 11.9 AmEx is trading at a significant discount to both Visa & Mastercard.

Dividend

Mastercard: 0.18% Visa: 0.87% AmEx: 1.45% AmEx has a higher dividend yield than Visa or Mastercard.

Brand

AmEx was again awarded the JD Power award for credit card satisfaction in 2011. AmEx has a stronger brand than Visa & Mastercard because it offers its customers special offers such as airline club access for platinum card holders.

Strong Start to 2012

AmEx (orange) is up 2% so far in 2012. Visa is down 2% and Mastercard is down 8%. This price action indicates that a rotation is starting to occur. Money managers are moving out of last year's high flyers Visa & Mastercard and into the cheaper less extended AmEx. This is a trend that should continue as AmEx is cheap when compared to Visa & Mastercard.

(cnbc)

Conclusion

If you are looking to buy a credit card stock you should consider AmEx ahead of Visa or Mastercard. Visa & Mastercard are overextended while AmEx remains undervalued.

Chapter 3

Amex jet co brand credit card

Objective To expand footprint in the Travel segment that is core to our Spend-centric model by tying up with the only financially viable Full service Airline Jet Airways to launch a Cobrand credit card Jet airways is the key premium airline in India today, operating over 400 flights daily to 76 destinations worldwide. Partnership with Jet Airways is therefore core to our premium strategy Background India domestic Aviation Sector is growing at 15% YOY. Jet Airways is a key strategic player in the Airline industry with a market share of ~26.6%, while the other two full service airlines are struggling to survive Citibank & Jet Airways ran an exclusive co-brand card relationship for the past 12 years. However they recently announced termination of their relationship which has resulted in Jet reaching out and exploring partnership with multiple issuers at the same time, including Amex, HDFC Bank & ICICI Bank HDFC Bank & ICICI Bank have recently (Aug12) launched their respective Cobrand cards with Jet Airways. It is therefore imperative for Amex to quickly launch its Cobrand with Jet Airways Product Strategy The new co-brand will help Amex strengthen its premium position in India whereas non participation will expose Amex to a competitive disadvantage vis--vis other issuers The card will strengthen our GRCC product portfolio, and allow us to own the Travel segment in Proprietary (Platinum Travel Card) as well as

Cobrand space. It will help drive fee paid acquisition, enable AR growth, and fill the gap created due to the decline of Kingfisher Airlines The new card will have the best miles earn rate in the market, which is imperative to win in the FF space. Product positioning, card design, and value proposition will be clearly differentiated from the other existing Amex Credit card products to minimize cannibalization

Jet is the only financially viable Full Service Carrier (with a frequent flyer loyalty program) with more than 50% share of the Corporate travel The large database of Jet Airways presents a big opportunity to acquire new cardmembers. While other issuers are playing across the spectrum and will go after the complete frequent flyer base, we would be targeting the top premium tiers including Platinum / Gold / Silver / Blue Plus, and relevant segment of Blue

Product name American Express Jet Platinum Credit Card

Segment Affluent Achievers with strong affinity to Jet Airways Loyalty Program

Design Target Jet Setter who loves to collect miles, travel and indulge his family & himself to destinations & trips that he has always aspired for

Positioning Statement The Fastest Way to Being a Jet-setter

Key Differentiators Highest JP Mile earn rate in the market Jet Setter Benefits that support travel end-to-end making the customers journey truly memorable

Platinum card

Platinum Travel Card Value Proposition

The new American Express Platinum Travel Card The Fastest Way to a Free Holiday o Spend US$ 3.5K and get Airline vouchers worth US$ 200 o Spend US$ 8K and get Airline vouchers worth US$ 400 + 2 Room Nights o No hassles of mile conversions

Platinum Travel Card

Core Customer Benefit Annual Fee Anchor Partners Welcome Gift Core MR Earn rate MR Earn Accelerator Anchor Partner Others Spend Linked Benefit Spend Threshold Benefit Lifestyle Benefits

Fastest Way to a Free Holiday $100 (YR1) | $120 (YR2 onwards) Indigo Airlines & Taj Gateway 5K MR on Amex $80 Airline Vouchers 1 MR = $0.8 Yes 10X/5X partners Yes $3.5K 7.5K MR on Amex $120 Airline Vouchers $8K 10K MR on Amex $200 Airline Vouchers + 2 Room Nights*

Customer Benefit (at $8K) 2 Return Airline Tickets + 2 Room Nights

CHAPTER 4

Return on Spend Calculations

Avg. Annual Spend = $5K Amex Kingfisher fisher first credit card

Reward Points / Miles Earned Welcome Gifts 11000

Spend threshold Miles (equivalent of 1 return ticket) 32000 Rewards Miles Total Miles Miles Earned-Total Value Other Benefits-Total Value 9063 52063 $488 0

Total value (Miles Earned+Other Benefits) $488 Annual Fee Total Value (Net of Fee) Return on Spend $100 $388 7.8%

Citibank jet platinum card Reward Points / Miles Earned Welcome Gifts 3000

Spend threshold Miles Rewards Miles Total Miles Miles Earned-Total Value Other Benefits

0 13400 16400 $164

1 complimentary ticket at card issuance (base fare) $70 50% discount for companion tickets (base fare)

5% discount on domestic ticket booked on Jet (base fare) $21 3% discount on international ticket booked on Jet (base fare) Other Benefits-Total Value

240 $96

Total value (Miles Earned+Other Benefits) $269 Annual Fee Total Value (Net of Fee) Return on Spend $50 $210 4.2%

Avg. Annual Spend = $5K

Hsbc make my trip credit card

Points Earned Welcome Gifts Spend threshold Points Rewards Points Total Points Points Earned-Total Value Other Benefits MakeMyTrip discount vouchers 7 Domestic Flight Ticket Vouchers (base fare) Other Benefits-Total Value Total value (Miles Earned+Other Benefits) Annual Fee Total Value (Net of Fee) Return on Spend $85 0 0 16100 16100 $107

$210 $295 $402 $70 $332 6.6%

Amex platinum card

Points Earned Welcome Gifts Spend threshold Points Rewards Points Total Points Points Earned-Total Value Other Benefits Airline Vouchers - Welcome Gift Airline Vouchers - At spend threshold of Rs.175K Other Benefits-Total Value Total value (Miles Earned+Other Benefits) Annual Fee Total Value (Net of Fee) Return on Spend $80 0 0 9063 9063 $72.5

$120 $200 $272 $100 $172 3.5%

SWOT ANALYSIS

 STRENGTHS

. Liberal economic system. . Sound bank managements. . Improved risk management. . Diversity in bank funding activities. . High systemic liquidity. . Safety of depositors funds comes in priority. . Wide spread developed banking culture. . A healthy banking system. . Banking secrecy laws.

WEAKNESS

. Government financing by banks out of acceptable standards. . Very weak corporate governance. . Limited branches.

OPPORTUNITIES

. Privatization creates ample opportunities for economic growth. . Banking Over Borders extension to regional countries. THREATS

.presence of close competitors.

Summary

Organization. AMERICAN EXPRESS BANK Ltd.

American Express Company (NYSE: AXP), also known as AmEx , is an American multinational financial services corporation headquartered in Three World Financial Center, Manhattan, New York City, New York, United States. American Express Bank has presence in over 150 countries. American Express India was established in 1921 providing high quality travel and financial services. American Express in India is the largest company to have wide American Express Travelers Cheques are available in the following currencies: AMERICAN EXPRESS BANK IN INDIA

American Express Card division tops upon other credit card issue. There are consumer cards, business cards and corporate travel cards.

Charge Cards Charge cards are a type of credit card that require you to pay the full amount you've charged each month. Interest charges typically accrue on amounts charge Rewards Cards Rewards cards come in the form of credit and charge cards and offer consumers extra value for purchases.

Business model

Typical credit card business model Acquiring bank: the bank which processes credit card transactions for a merchant, including crediting the merchant's account for the value charged to a credit card less all fees.

1. Issuing bank: the bank which issues the consumer's credit card. This is the bank a consumer is responsible for repaying after making a credit card purchase. American Express operates its own network.

Analysis of Marketing Techniques used by American Express American Express continues to attempt to expand its customer base, while at the same time trying to keep its reputation as a card of status. American Express offers convenient methods to obtain account information, pay bills, find discounted products, and even make travel plans via the Internet. The catch is that one must charge it on the American Express card to get the discounts. Once again, American Express aims to please its customers. In Europe, American Express has been limited due to its high merchant fees, making businesses bypass the opportunity to work with American Express. American Express should offer a trial membership to merchants to entice them into offering consumers the ability to purchase with American Express cards. American Express has a very large customer base that travels. In order to have customers use their American Express card when visiting these merchants, American Express could offer either promotional travel in these areas, or discounts to cardholders that make purchases in these stores. American Express has developed several market areas to increase consumers

usage of their card. A recently released survey investigated customer satisfaction of credit card issuers. In this article we'll examine American Express . Survey According to customers, American Express really outperformed other issuers in the areas of communicating with customers and offering attractive rewards. Industry American Express is in the credit services industry. The credit card issuer operates in the financial sector. The credit services industry is cyclical. American Express is a mature company that operates primarily in mature markets, although, the company does benefit from sales in growth and less developed markets. American Express Financials American Express has a price-earnings ratio of 13.34 and a forward price-earnings ratio of 12.01. Why American Express Is A Better Buy Than Visa Or Mastercard Over the past year, shares of American Express (AXP) are up 5.4%. The chart below shows AmEx , Visa , and Mastercard .

Why Visa & Mastercard have outperformed Visa & Mastercard have shifted focus away from credit cards and onto debit cards. Visa has issued 397 million debit cards Mastercard has issued 123 million debit cards This compares to AmEx, which does not have a debit card business. Creditcard.com reports that AmEx has roughly 50 million credit cards in circulation. Contrastingly, AmEx provides credit for its cardholders. Why Buy AmEx? Mastercard: 15.65 Visa: 14.81 AmEx: 11.9

AmEx is trading at a significant discount to both Visa & Mastercard. Mastercard: 0.18% Visa: 0.87% AmEx: 1.45% AmEx has a higher dividend yield than Visa or Mastercard. AmEx was again awarded the JD Power award for credit card satisfaction in 2011. AmEx has a stronger brand than Visa & Mastercard because it offers its customers special offers such as airline club access for platinum card holders.

Visa & Mastercard are overextended while AmEx remains undervalued.

Amex jet co brand credit card

HDFC Bank & ICICI Bank have recently (Aug12) launched their respective Cobrand cards with Jet Airways. Product Strategy Product positioning, card design, and value proposition will be clearly differentiated from the other existing Amex Credit card products to minimize cannibalization

Product name American Express Jet Platinum Credit Card

Platinum card

Platinum Travel Card Value Proposition

The new American Express Platinum Travel Card The Fastest Way to a Free Holiday Amex Kingfisher fisher first credit card

Citibank jet platinum card

Hsbc make my trip credit card Amex platinum card Sound bank managements.

. A healthy banking system. . Banking secrecy laws

BIBLIOGRAPHY

Philip Kotler 7th edition

Company Annual Report Employee database

WEB SITES

1.www.americanexpres.com 2.www.google.com

3.Etzel, Michael; Walker, Bruce; and Stanton, William, Marketing 11th Edition. New York: Irwin McGraw-Hill, 1997. Permenter, Paris, Falling for Nassau, Travel Agent, August 7, 2000. American Express, Hotel & Motel Management, August 14, 2000.