Manager Leadership Skills Subordinate Performance Organizational productivity

Manager Leadership Skills Subordinate Performance Organizational productivity The study investigated about the impact of manager leadership skills. The purpose of the research is to highlight the leadership augmentation process for the companies to generate results-oriented, people-focused leaders instead of purely mangers, which they help in improving the subordinates performance, raise retention and morale of the employees, and bring bottom-line results for the organizations. The research linkages between manager skills and leadership skills that help Managers to be aware of their personality traits as a leader, that further assist managers in evaluating the subordinates performance and organization effectiveness. The research rationale is all about Managers leadership skills in reality have any influence or not to enhance the subordinate performance and organizational productivity. For the study, Judgmental Sampling has been used; deliberately handpicked individuals from the population based on our knowledge and judgment and conducted both Focus- Group and Questionnaire tool as our primary source of data. We arranged a focus group in IXLMS organization and questionnaire survey tool in SOFSOL organization. Total of 54 respondents participated which comprises of both managers subordinates from different departments. In-depth questions were asked and the responses were recorded. The data that was gathered is analyzed by the use of mathematical tools such as tables, percentages and pie charts. This allows us to obtain quantitative data that can help in the analysis of our hypothesis. T-Testing of hypothesis was conducted which resulted that there is an impact of Managers leadership skills to enhance the subordinate performance and organizational productivity. To increase subordinates satisfaction, performance, and organization productivity, in this research Managers are suggested to give prominence efforts on their leadership skills instead only rely on manager skills and companies should also work on this as employees are the leading key factors of any organization, they, therefore, have to come up with the strategies of encouraging their employees and make them willing to grant as much time in leadership skills as they do in management skills. TABLE OF CONTENTS CHAPTER ONE Background of the Topic and Statement of the Problem INTRODUCTION Organizations must be certain that every employee carry out to the best of their ability and delivers significant value to the business but in todays economy its critical to get the most efficiency from every employee.  Ã‚   One main issue that almost every business resist with is the challenge of dealing with employees performance. Great organizations know that measuring their accomplishment with people both customers and employees is just as important as measuring the achievement of their financial bottom line. Great organizations focus on two bottom lines instead of just one. In these organizations, developing loyal customers and engaged employees are considered equal to good financial performance. Upper Management at these organizations know that in order to succeed they must create a encouraging environment for employees, which results in better customer service, which leads to higher income. There are many elements that go into creating a victorious organization like customer focus, different marketing strategy, and passionate employees etc are the factors that come to mind but the one place that organizations should focus on first is leadership skills of the mangers. Thats because leadership is the succession that drives the other factors. Developing impressive leaders is the key to organizational success. One of the mainly common sources of low productivity in any organization and deprived work ethic is the lack of leadership skills in their managers. When the managers of the companies keep going with the appropriate coaching of leadership skills, they are able to quickly reach the levels of confidence and competence needed to increase productivity to meet requirement. With suitable leadership style, managers develop new skills more rapidly and begin to donate sooner to the bottom line.   Leaders help subordinates to achieve astonishing results. They lend a hand others to develop eagerness and passion for their work as well as higher self-esteem and more self-confidence. When given the leadership skills to give work direction, goal setting, coaching, performance evaluation, active listening, feedback, and practical problem solving employees experience fewer disturbances and more success. Mentoring high-potential ability and giving employees the resources to grow into competent and confident, leaders creates a conduit for organizational growth. Over a period of time by receiving the appropriate leadership skills, mangers can reach the levels of self-reliance and competence that enable them to increase their productivity and success of the organization. Without the proper leadership skills, most mangers end up achieving only a temperate level of performance on key tasks instead of pushing through to the highest level possible. The question then is for organizations to develop their mangers to reach higher levels as quickly and proficiently as possible, thus improving productivity and overall business performance. STATEMENT OF PROBLEM The research rationale is that leadership of the manager is the key factor in influencing employee performance and organizational success. This study is to highlight the leadership development process for organizations to create results-oriented, people-focused leaders instead of simply mangers, that they improve subordinates performance, increase retention and morale, and deliver bottom-line results. The objective of the research is to find that: Do employees know there is a difference in a leader and a manager? Do really manager have any leadership skills in them or not? What managers think about leadership? Do mangers believe in developing team members into individual who can complete pre determined goals? How leadership skills effect the overall organization productivity? Managers leadership skills in reality have any impact to enhance the subordinate performance and organizational productivity or not? The research questionnaires also highlight the ways that managers can improve his/her leadership skills and motivate the employees to perform their best that boost the organization productivity. SIGNIFICANCE OF THE STUDY The research will foster managers to develop their skills as a leader. If one relies only on being a manager, hell never instigate subordinate to give their very best and increase organizational productivity so good managers should think like leaders within their orb of influence. Leadership skills are vital in an organization. It enhances organization productivity. The manager cannot get the job done on time by employees unless he/she has good leadership skills. Leadership is mostly about being one-self and preserving one personal legitimacy. Most mangers are not born with leadership skills so they can develop their leadership skills through this research as it highlighted the importance of personal progress, thinking innovatively, caring for people and also having the will to become a leader. Effective leadership skills among managers are not only avoid delays, misunderstandings, confusion or distortions of facts during uncertain situations but also establishes harmony in the organization environment. SCOPE DELIMITATION The research is designed to illuminate the impact of leadership skills of a manager on subordinates performance and organizational productivity. The study is conducted in the natural environment with the minimum interference of researcher with the normal flow of events. All the expenses and barriers will be kept in consideration while designing this research. As time was a major constrain in this exercise, so within this short time frame the focus group methods and online questionnaire survey helped us in getting fairly dependable data from two organizations i.e. IXLMS and Sofsol. Both companies are emerging business solution providers. DEFINITIONS Bottom line its an organization net earnings, net income or EPS (Earnings per share). Leadership a crucial management skill is the ability to encourage a group of people in the direction of a common goals. IXLMS Its a company name, an emerging business solution provider. Sofsol Its a company name. Non-Contrived If the research is completed in the natural environment where work carry on normally. Judgmental Sampling The sample based on the researcher thinking who they think would be suitable for the study. Questionnaire Tool A questionnaire is a research instrument consisting of a sequence of questions that help in collecting the information from respondents. Focus Group a research in which a group of people are asked about their observations, views, ideas and attitudes towards a concept. It is usually qualitative research. Null Hypothesis It is normally offer a general or default position, such as that there is no relationship between two measured facts, or that an imminent treatment has no effect or no impact. T-Test A t-test is a statistical hypothesis test in which the test statistics go after a students t distribution if the null hypothesis is carried. OJT OJT stands for On-the-Job Training which is a form of training received in a normal working work place. CHAPTER TWO Research Method and Procedure RESEARCH DESIGN METHODS The research is designed in a way that all aspects of interest as well as efficient data collection are kept under consideration. It is also to cover the entire important facet related to managers leadership skills that help in improving the employees performance and organization productivity. 2.1.1 Purpose of the Study The study is descriptive research in nature. The purpose is to discover the impact of the leadership skills of a manager thats helps in enhancing the employees performance and improving the organization structure in terms of its productivity. 2.1.2 Study Setting It is a field study as it examining the effect of leadership skills. The study setting is non-contrived in nature. 2.1.3 Unit of Analysis Unit of analysis are two organization IXLMS and SOFSOL. Both are business solution providers. RESPONDENTS OF THE STUDY The respondents can easily be identified. Our respondent includes Managers and Subordinates working in IXLMS and Sofsol organizations. To have a diverse sample, we choose individuals, belonging to different departments (like Finance, IT, Administration, sales and HR) having different functional responsibilities. We have categorized the target population into following two groups according to their role in an organization: Managers Subordinates 2.2.1 Sampling Frame The samples are selected from HR repository of each of above mentioned organizations. 2.2.2 Sampling Procedure For our study, we have used Judgmental Sampling we have purposely handpicked individuals from the population based on our knowledge and judgment. Also, we have obtained the information from a very specific group of people for which this method is most feasible. We have chosen limited number of people that have expertise in the area being studied. 2.2.3 Sample Size The sample size for this exercise estimated to be 54 respondents which include both managers and subordinates. RESEARCH INSTRUMENT The instruments include the primary and secondary sources of the data. Primary Sources We choose both Focus- Group and Questionnaire tool as our primary source of data. We have arranged a focus group in IXLMS organization and questionnaire survey tool in SOFSOL organization, where individuals from different departments participated. In-depth questions were asked and the responses were recorded. The reason being the Focus Group discussions on a specific topic at a particular location and at a specified time, it gives the opportunity to capture spontaneous responses. This focus group unstructured responses reflect the genuine opinions, ideas and feelings of the respondents about the topic under study. Whereas the questionnaire survey will be a useful step as to encapsulate the answers/responses in a pie chart and bar chart form. The online survey questionnaire is floated in SOFSOL organization for collecting data from managers and subordinates. The responses results are shared in chapter 4 and the survey can be viewed online by following the links: For Managers: http://tiny.cc/ManagersSurvey For Subordinates: http://tiny.cc/DirectsSurvey The questions were designed in such a way that it allows free flow of information from the minds of our target population. This allows us to attain quantitative data that can help in the analysis of our hypothesis. The questionnaire will help in investigating the related matters of the research, which includes all the related questions about the manager and subordinates that reveals the major aspects of the leadership skills. 2.3.2 Secondary Sources The Secondary sources include the following: Newspapers, Books, articles, magazines Other Publications like company reviews. World Wide Web, Internet TREATMENT OF THE DATA The analysis will be done on the basis of the data gathered by visiting the organization IXLMS, SOFSOL and information that revealed by them. The data that is gathered will be analyzed by the use of mathematical tools such as tables, percentages and graphs. T-Testing of hypothesis will be conducted in order to know the impact of leadership skills on subordinate performance and organizational productivity. CHAPTER THREE Review of Related Literature Studies 3.1 LOCAL LITERATURE There are many duties predictable of a leader. Leadership is not only about being the face man. It is not only about bestowing orders. It is not even about grasp the blame. Good leadership is a challenging, all rounder role that want commitment, skill, intelligence and most important of all, leadership qualities and abilities. All managers want to have good quality subordinates. A lot has been on paper about this topic. It is not only about the power of the boss, but in many cases, it is about the gift to lead. Leadership is so very different from being dominant. Some bosses believe that good leadership means that they set a good example. If they put a good example, they are good leaders. I think that is a little too simplistic. If you desire good subordinates, you must first be a good leader. That leadership expands too many aspects of your interaction with and your management of the people. When you first begin working, you are skilled to toe the line, that your boss is always right; my way or the highway. Abruptly, if you want your people to imagine out of the box, the easiest technique to achieve this is, dont generate the box in the first place. You are inquired to think out of the box. For a moment this happens that you select someone as your leader. He is going to be your direct light and fetch you across the desert. You rejoice your new leader. Then the party is over and the journey begins. What happens? If this were a democratic system, then the leader sets a direction, say, south, and everyone votes on it. If it were Moses, he just ups and moves on and everyone follows. One is a leader, the other is a coordinator. Do you own a car that is red on the front and polka dotted pink behind? You would if you allowed your 3 year old girl to decide on half the colors. If you did not paint the back polka dotted pink, she will be unhappy. At some point, a leader has to take responsibility for his decisions. Everyone will have their own beliefs. A good leader understands and accepts that. To be firm that everyone shares exactly the same opinion and everyone to have the same decision, is not factual leadership. When we consider of leaders, we think of someone who has vision. He has the big depiction. He knows where he is going away. Leaders are not essential. This might appear as a surprise, but it is true. A good manager require not be a good leader in some situation. You would see this most often in large, technical organizations. Management is about competence and effectiveness. Leadership is about motivation and vision. Leaders deal with public. Managers deal with procedures. Which is why, to be a good leader, you need to have a good level of people handling skills. There are some foremost leaders who simply bull-doze their way through the team. In a disaster situation, that might work. But it can only be continued for a short while. Imagine yourself under the oppression of your supervisor, day in and day out; would you place for it? To be a good quality leader, you need to understand your people. But to be a great leader, you need to not only understand them, but to know how to bring out the best in them. Before you can encourage and motivate, you need to understand. However, if you stop at merely understanding them, but not knowing how to bring them to the next level, then you are a unlucky leader. Managers are power figures. They must be followed. They are in their positions through seniority, loyalty to the company or a million other reasons good and bad. Leaders, on the other hand, are people whom the group prefers to follow. They may have no organizational authority, but they motivate the group with their vision and obsession. Sometimes, when natural leaders appear, managers feel threatened, especially if its their group that is concerned. A good manager knows how to use and control the normal leaders. I would like to suggest that for anyone to be a good leader, there are certain basic competencies that are desirable. A lot of focus has always been put on the personality of a leader, the tasks and the roles f a leader. These are important or not important, depending on what theory you pledge to. However, I would suggest that there are some basics that any leader must have. This is despite of the leadership type, leadership style and so on. There are basic competencies that a leader should to have. I have tried to sort them out and have put them into five basic competencies: technical competence operational competence financial competence people competence strategic competence A manager basically directs resources to complete prearranged goals or projects. For example, a manager may connect in hiring, training, and scheduling employees in order to attaining the work in the most efficient and cost effective manner probable. A manager believes in a failure if he/she is not able to complete the project or goals with effectiveness or when the cost turns out to be too high. On the other hand, a leader within a company build up individuals in order to complete preset goals and projects. A leader build up relationships with his/her employees by building communication, inducing images of success, and by bring forth loyalty. 3.2 FOREIGN LITERATURE There are several definitions of leadership, and the term leadership could mean different things to different people (see Bass, 1990 and Rost, 1993). There was evidence that leadership is a function of knowing yourself, having a vision that is well communicated, building trust among colleagues, and taking effective action to realize your own leadership potential (Bennis, 2003; 1989). Moorhead and Griffin (1998) suggested that leadership could be defined in two terms of both process and property. As a process, leader is the use of non-coercive influence to direct and coordinated the activities of group members to meet a goal. As a property, leadership is the set of characteristics attributed those who are perceived to use such influence successfully. 3.2.1 Leadership Personality Qualities and Traits Researchers and scholars present a number of leadership personality traits (see Atwater and Yammarino, 1993; Kirkpatrick and Locke, 1991). In this study, however, seven leadership factors were chosen to measure the subordinates performance outcomes. Based mostly on Dubrin et al. (2006) work, the traits seem to be relevant to subordinates performance. Dubrin et al. (2006) indicated that it is important for the leader to be realistically self-confident. A leader must project his/her self-confidence to the group. Self-confidence is not only personality characteristic; it also refers to the personality trait a person exhibits in a number of situations. It is akin to being cool under pressure. A person is a self-confident leader when he or she retains composure during a crisis (Dubrin et al., 2006). Emotional stability refers to the ability to control emotions to the point that ones emotional responses are appropriate to the occasion (Dubrin et al., 2006). Emotional stability is an important leadership trait because group members expect and need consistency in the way they are treated. The effective leaders are generally calm, confident, and predictable during a crisis (Goleman, 1995). Initiative or being a self-starter refers to taking action without support and stimulation from others, and it also related to problem-finding ability (Dubrin et. al., 2006). As conceptualized by Kirkpatrick and Locke (1991), initiative refers to the proactive side of leadership. Rather than just reacting to events, effective leaders make choices and take action that leads to change. A leader is also someone who facilitates change it therefore follows that a leader must be flexible and adaptable enough to cope with change (Dubrin et al., 2006). Corporate leader must be able to adapt to changes. Flexibility, or able to adjust to different situations, has long been recognized as an important leadership characteristic. Almost for all followers, it is desirable for the leader to be enthusiastic (Dubrin et al., 2006). Group members tend to respond positively to enthusiasm, partly because enthusiasm may be perceived as a reward for constructive personality trait. Dubrin et al. (2006) also indicated that leaders displayed their sensitivity and empathy to influence others and to show that the leaders understand their group members. This type of sensitivity to others means understanding whom the group members and what their position on issues is, and how to best communicate with and influence them (Dubrin et al., 2006). Communication skill is another essential leadership requirement. However, managers spent at least 80 percent of every working day in direct communication with others people. In other words, 48 minutes of every hour in spent in meeting, on the telephone, or talking informally while waling around. The other 20 percent of typical managers time spent doing desk work. The communication is an important job of managers (Drft, 2000). 3.2.2 Subordinates Performance: Effectiveness and Productivity Manager can use motivation theory to help satisfy subordinates need and simultaneously encourage high work performance. Draft (1999) suggested that motivation refers to the forces either within or external to a person that arouse enthusiasm and persistence to pursue a certain course of action. There are many meanings of job satisfaction which are defined in many ways, and increasing subordinate satisfaction is important for organization. Yoder (1959) defined job satisfaction as the degree to which employees feeling that he or she like or dislike in work and working condition. Beer (1964) said that job satisfaction is the employees expectation that affection the job, organization, colleague, and working condition. Robbins (2003) suggested that job satisfaction is the degree to which employee feel positively or negatively about their job. It is an attitude that response to work itself, compensation, supervision, co-workers, job security, and advancement opportunity. Muenjohn and Armstrong (2001) found that leadership influences employee satisfaction. Employees are more satisfied when their managers are good leaders. This includes motivating employees to do a good job, striving for excellence or just taking action. Many people may be confused what the difference between effectiveness and efficiency is. Scholars defined effectiveness as the degree to which an organization realizes its goals, while efficiency is a more limited concept that pertains to the internal working of the organization and is defined as the amount of resources used to produce a unit of output (Moorhead and Griffin, 1998). It is leaders responsibility to ensure that their subordinates can achieve a high level of both effectiveness and efficiency. Managers or leaders have been aware it important that their firms maintain high levels of productivity. Productivity of an organization is a primary determinate of the firms level of profitability and, ultimately, its ability to survive (Griffin, 1996). Griffin (1996) said that in a general sense, productivity means an economic measure of efficiency that summarizes what is produced relative to the inputs used to produce them. 3.3 COMPANY LITERATURE People are 4 times more capable than we think, but only if they unleash their full potential of creativity, innovation, productivity, motivation commitment. Organizations are public systems where human resources are the most important factors for success and efficiency; they need efficient managers and employees to attain their goals. The victory or failure of an organization is decided by human beings, thus management is anxious with this human resources matter. In other words, a companys human resources can be the distinguishing factor between success and failure. It is for this reason that there is great importance on the leadership of managers. Good manager direct subordinates to work effectively in the direction of organizational goals and targets. Organizational success in obtaining its goals and objectives depends on managers leadership skills, traits and behavior. By using appropriate tactics managers can affect subordinates job satisfaction, commitment and productivity. Organizational values can be viewed as a series of managerial attitudes, behaviors, characteristics and skills based on individual, leadership interests and reliability of employees in different situations. The managers leadership ability to adjust him with changing environment internally or externally and lead a group of subordinates to work together in the workplace is the key to success. Employees at every level of their job make feel about whether they are appreciated and privileged from important way that come from their work environment, particularly those that come from the leaders in a straight line over them. The managers leadership skills and subordinate employees job satisfaction has for all time given high importance in the company. Job satisfaction is linked to the feeling of employees and can be partial by leadership factors of their supervisor or employer. 3.3.1 Competencies Are Growing From Leading Individuals to Organizations Leading in successively larger framework from individuals to groups to organization-wide efforts, need successively better sets of competencies. For example, core competencies are the least needed in leading others, whether other individuals, in groups or organization-wide efforts. To actually be effectual at leading other individuals, people should have the core competencies plus certain other competencies to lead individuals. 3.3.2 Issues of Identifying Competencies Desired by Leaders The exact competencies i.e. knowledge, skills and abilities that a person desires in order to lead at a specific time in an organization depend on a variety of factors, including: if that person is leading one other individual, a group or a large organization, The degree of leadership skills that person already has, That persons fundamental nature and values, competencies should be selected that are in accord with that nature and those values, if the group or organization is for-benefit or non benefit, new or long-established, and large or small, The actual culture or values and associated behaviors of whoever is being guided. The above deliberation can make it very difficult when trying to decide what competencies someone should have in order to be a good leader. Maybe thats why leadership training programs in institutions typically claim a set of standard competencies. Leadership is a main issue or the challenge in the growth of groups, organizations and states. 3.4 SUMMARY OF THE LITERATURE REVIEW Employees plays significantly important role to drive in the organization achieve its goals and employees performance effects directly to the companys outputs. However, keep up a good performance and motivating workers are not the easy things to do and that the responsibilities of managers to lead control, guide, and monitor their followers or subordinate performances. Organizations may endeavor to satisfy employees by offering sufficient compensation program, safe and friendly work environment. But, the subordinate could not have the good and efficient performance without the good leader. If the company would like to achieve its goals and targets, it must have a good leader or effective leader because of the leader holds responsible for failure or the success of the whole organization and leaders hold the liability for the performance of the individual and group within the organization. It is also emphasis that the subordinates satisfaction, productivity, and effectiveness can be influenced by the leadership personality traits of the manager. Manager motivation or encouragement towards subordinates which is one of the leadership skills also has an effect on the productivity of the organization. 3.5 AREA FOR FURTHER STUDY Due to limited resources the research will be restricted in finding the impact of manager leadership skills on subordinate performance and organizational productivity in Karachi two organizations only; In order to broad the scope of the project one can discover the correlation between the leadership factors and subordinates outcomes as well. However to obtain the best available result further projective techniques such as time series analysis and regression will be used to project the findings of the study in different organization overall in Pakistan. CHAPTER FOUR Presentation Analysis 4.1 CRITERIA FOR THE ANALYSIS We employed two survey tools (Focus group and Questionnaire) for gathering data, and following are the Qualitative (used for Focus Group) and Quantitative matrixes (used for Questionnaire Survey tool) developed on that data. 4.2 QUALITATIVE ANALYSIS In order to quantify the qualitative data gathered through the focus group participants, as per the responses collected I have generalized the results in each of the following category as follows: 4.2.1. Personality Traits Personality traits defines how directs and managers analyze their personality with respect to leadership. The respondents response was 100%in this case. They all believed that their managers have the necessary traits to become a leader. 4.2.2. Practice leadership

Greek And Roman Influence On Western Civilization Essay -- greek roman

Western civilization is what we call modern society that mainly includes North America and Western Europe. But how did this western way of life come to be? Their are many different ways but mainly through ancient cultures. The two main ones are the Greek and Roman. Greece with their golden age and Rome with its great Empire and Republic and also together. Their are many ways in which western civilization is like the ancient Greek civilization. They started the Olympic games. Greeks come up with the idea of an alphabet that it still used today. They were the first to think of the idea of democracy. They had common people participate in their government and to elect a leader. Their trials had an actual jury made up of commoners. Greece was the first to think of paying people for their labor. It also had the initial philosophers and thought up of the way we now write literature. Including the idea of putting on a play. One of historyà ¢Ã¢â€š ¬Ã¢â€ž ¢s greatest writes, Homer, thought up of poems that are story size that we now call epic poems. But it was mainly through government that Greeks influenced the world. The other greatest influence on western civilization is the one of Ancient Rome. They formed a law code much like the ones used now a day in many countries. First to believe someone was innocent tell proven guilty. Had a Senate much like the ones used today, with both upper class and lower class in it. And also had other assemblies. Rome spread the Lat...

Pedogenesis in Western Washington and Northern Alaska: A Comparison of

Pedogenesis in Western Washington and Northern Alaska: A Comparison of the Primary Factors Introduction: Pedology is partially based on the established principle that soil changes are directly correlated to specific biotic communities and regional climatic patterns. From this principle questions have arisen as to why the Arctic tundra that lies above the treeline in Alaska displays similar chemical characteristics to that of the well-developed Podzols and Spodosols found in the coniferous forests of Washington. The Podzols and Spodsols of these coniferous forests are defined by their cool and humid regional climates and by the acidic parent material from which they formed. Recent studies indicate that the E and Bs horizons that define the temperate forest soils are also found above the treeline in Alaska, Canada, Greenland, and Siberia (Ugolini, Stoner, & Marret, 1987). What role does biota play in the current soil formation for each of the sites? Why do the similarities exist between the sites despite differences in climate and vegetation? What other factors consistently influence the soil properties? The purpose of my paper is to address the question of which soil forming factors have the greatest effect on the similar and distinct characteristics of the two geographic locations. Podzolization: Pedogenic Change in Alaska and Washington Chemical analyses of temperate forest soils in the Pacific Northwest have been collected to examine soil forming trends (Ugolini, Stoner, & Marret, 1987). Such data allows us to compare various ecosystems and their characteristic pedological processes. Ugolini et al 1987 show how the soil solution analysis allows us to see ". . . a simple two-compartment system" (p.91). The first ... ...d processes, principles, and knowledge necessary to further our understanding of modern pedogenesis as an important part of soil science. References Cited: Birkland, Peter, 1984, Soils and Geomorphology: New York, Oxford University Press, 372 p. Marret D.J., Stoner M.G., & F.C. Ugolini, August 1987, "Arctic Pedogenesis: 1. Evidence for Contemporary Podzolization." Soil Science, 144, p.90-100. Schlichte, A.K., & F.C. Ugolini, May 4, 1973, "The Effect of Holocene Environmental Changes on Selected Western Washington Soils," Soil Science, 116, p.218-227. Sletten, Ronald, & F.C. Ugolini, January 1991, "The Role of Proton Donors in Pedogenesis as Revealed by Soil Solution Studies." Soil Science,151, p.59-72. Stoner, M.G., & F.C. Ugolini, January 1968, "Arctic Pedogenesis: 2. Threshold-Controlled Subsurface Leaching Episodes." Soil Science, 145, p.46-50.

Terrorism †Wake Up America! :: September 11 Terrorism Essays

Terrorism – Wake Up America! America, wake up! That's what we think we heard on the 11th of September 2001 and maybe it was, but I think it should have been "Get Out of Bed!" In fact, I think the alarm clock has been buzzing since 1979 and we have continued to hit the snooze button and roll over for a few more minutes of peaceful sleep since then. It was a cool fall day in November 1979 in a country going through a religious and political upheaval when a group of Iranian students attacked and seized the American Embassy in Tehran. This seizure was an outright attack on American soil; it was an attack that held the world's most powerful country hostage and paralyzed a Presidency. The attack on this sovereign US embassy set the stage for the events to follow for the next 23 years. America was still reeling from the aftermath of the Viet Nam experience and had a serious threat from the Soviet Union when then President Carter had to do something. He chose to conduct a clandestine raid in the desert. The ill-fated mission ended in ruin, but stood as a symbol of America's inability to deal with terrorism. America's military had been decimated and downsized / right sized since the end of the Viet Nam war. A poorly trained, poorly equipped and poorly organized military was called on to execute a complex mission doomed from the start. Shortly after the Tehran experience, Americans began to be kidnapped and killed throughout the Middle East. America could do little to protect her citizens living and working abroad. The attacks against US soil continued. In April of 1983 a large vehicle packed with high explosives was driven into the US Embassy compound in Beirut. When it explodes, it kills 63 people. The alarm went off again and America hit the Snooze Button once more. Then just six short months later a large truck heavily laden down with over 2500 pounds of TNT smashed through the main gate of the US Marine Corps headquarters in Beirut. 241 US servicemen are killed. America mourns her dead and hit the Snooze Button once more. Two months later in December 1983, another truck loaded with explosives is driven into the US Embassy in Kuwait, and America continues her slumber. The following year, in September 1984, another van was driven into the gates of the US Embassy in Beirut and America slept.

American Express: Branding Financial Services – Essay

American Express: Branding Financial Services Introduction American Express is known worldwide for its charge cards, travelers’ services, and financial services. It is one of the best-known and most-respected global brands. As it grew from a 19th Centurynineteenth- express company into a travel services expert by the mid-1900s, American Express (AMEXAMEX) became associated in the minds of consumers with prestige, security, service, international acceptability, and leisure.Advertising for the company, which began in earnest in the 1960s, reinforced these associations. For example, the now-famous taglinetag line â€Å"Don’t leave home without it† was created to convey the essentiality of owning an American Express cardAmerican Express Card. As the company grew, it expanded into a variety of financial categories, including brokerages, banking, and insurance, and by the late 1980s, American Express was the largest diversified financial services firm in the world.The difficulty the company encountered integrating these broad financial services, combined with increased competition from Visa and MasterCard, compelled AMEXAMEX to divest many of its financial holdings in the early 1990s and focus on its core competencies of travel and cards. The company weathered a decrease in cardholdercardholders at this time by greatly increasing the number of merchants that accepted American Express cardAmerican Express Cards and developing new card offerings, including co-branded cards and a genuine credit card that allowed customers to carry over the monthly balance.By the end of the 1990s, American Express was again seeking to broaden its brand to include select financial services in order to achieve growth. Beyond the challenge of integrating these services, AMEXAmerican Express faced a number of issues in the 2000s, including a highly- competitive credit card industry, a slowing economy, and a subdued travel industry. American Express Builds a Financial Emp ire Early History of American Express The American Express Company was formed in 1850 when two competing express companies merged.The express business, which was less than two decades old, specialized in shipping packages that were smaller than the bulk freight that railroads handled but were over the U. S. Postal Service size limits. Before express companies began operating, stagecoach drivers and even civilian travelers were recruited to deliver packages. Express companies also carried packages that required special handling or were particularly valuable. Bank transactions involving cash, securities, and goldGold gave express companies much of their business. In response to losing business to express companies, the U. S.Postal Service created the money order, which allowed people to send a cash equivalent through the mail that could only be cashed only by a specified recipient. The cash delivery service was traditionally the domain of express companies, since because postal worker s would often steal cash sent through regular mail. To counter the Postal Service’s move into financial services, American Express created its own money order in 1881. The American Express money orders were easier to use than the Post Office money orders, and AMEXAMEX extended the line to include orders in foreign currency that could be cashed internationally.The money order was a great success, selling 250,000 in its first year and more than half a million the next. In the late 1880’s, AMEXAMEX president J. C. Fargo returned from a trip complaining about how difficult it was to use his letter of credit, used to obtain cash abroad, at foreign banks. To solve the problem of obtaining credit abroad, in 1890 American Express employee Marcellus F. Berry designed the â€Å"Travelers Cheque,† intentionally using the British spelling of check to give it an international flair.The Travelers Cheque used the same signature security system still in use today and had exchan ge rates guaranteed by AMEXAMEX printed on the front. AMEXAMEX also gave foreign merchants commissions to encourage them to accept the check. Aided by the network of international financial relationships established for support of the AMEXAMEX money order, sales of the Travelers Cheque quickly took off. From 1882 to 1896, Travelers Cheque sales quadrupled as travelers all over the world were using AMEXAMEX products more and more to make their journeys easier. In the meantime, AMEXAMEX’s express business was growing overseas.Federal antitrust regulation led to the separation American Express’s express business from its financial services and tourism businesses. By that time, however, AMEXAMEX was already booking tours, hotel stays, and steamship and railway tickets. Money orders were still popular and tTravelers check Cheque sales were constantly increasing. AMEXAMEX had also been investing the float – —the money that remains in the company’s accoun t during the interval between when Travelers Cheques are bought and when they are cashed – —and earning millions of dollars in interest.The Travelers Cheque was AMEXAMEX’s flagship product. The travelers Travelers check Cheque fees and its float investments were responsible for most of AMEXAMEX’s earnings and almost all of their profits. History of the Charge Card In 1914, Western Union, another express company, issued the first â€Å"charge card† in the form of a metal plate given to preferred customers that enabled them to defer payment for services. Charge cards required that the balance be paid in full at regular intervals, but did not charge interest on the balance.Soon, many different companies from department stores to oil companies issued charge cards that customers could use to purchase goods and services from the issuing company. In the 1940s, several U. S. banks began issuing a paper document – —similar to a letter of credi t – —that customers could use like cash in local stores. Diner’s Club introduced the first modern charge card in 1950, when it issued a â€Å"travel Travel and entertainmentEntertainment† card designed for use by business travelers. The card was accepted by a large variety of merchants, who paid a fee to Diner’s Club in compensation for the added business.The first bank card was issued by Franklin National Bank in Long Island, New York. The bank-issued card was accepted by local merchants only, unlike the Diner’s Club card. Shortly after Franklin National Bank debuted its credit card, several other banks across the United States. S. issued credit cards to their customers. â€Å"The Card† AMEXAMEX actually had considered issuing a charge card on several occasions before Diner’s Club unveiled its card in 1950. AMEXAMEX management discussed issuing a charge card as early as 1947, but then-president Ralph T.Reed refused because of security problems given the possibility of fraud. In 1956, when DinersDiner’s Clubs’ card charges began to cut into AMEXAMEX travelers Travelers check Cheque sales, AMEXAMEX initiated negotiations to buy Diner’s Club. Talks lasted for two years, but Reed ultimately declined, citing concern about the dilution of AMEXAMEX’s prestige. In late 1957, AMEXAMEX leadership decided that the company would issue its own card. The public clamored to possess an AMEXAMEX charge card. Even before the card was officially available, thousands of customers had written in or visited AMEXAMEX offices to apply early.By the launch date of October 1, 1958, AMEXAMEX had issued over more than 250,000 cards and signed on 17,500 merchants that would accept the cards. The American Express cardAmerican Express Card required the cardholdercardholder to pay off his or her entire balance monthly. The company also charged a six dollar annual fee, which was one dollar greater than the Din er’s Club fee, â€Å"for prestige. †Ã¢â‚¬ [1] AMEXAMEX’s worldwide network of offices, travel agents, and associated banks helped it build the card’s membership rapidly.Since Because the American Express CardAmerican Express Card was initially designed for the travel and entertainment expenses of businessmen and the upper class, it was known as a Travel and Entertainment (T&E) card. This classification puts it in a category with such cards as Diner’s Club and Carte Blanche. In 1958, Bank of America issued the first modern credit card, called the BankAmericard. The key feature of the BankAmericard and other credit cards was a â€Å"revolving† credit line, which allowed cardholdercardholders to pay their account balance in installments, with interest assessed on the remaining balance.The BankAmericard originally served the state State of California, but within a decade Bank of America was licensing its card services to banks throughout the co untry. While American Express earned most of its card revenue from annual fees and merchant discounts (the percentage of a dollar transaction the merchant was required to pay to American Express in compensation for the business brought in by the card), credit cards earned revenues from interest charges and a lower merchant discount. Another mportant difference was that AMEXAMEX issued its own cards while individual banks issued cards under license agreements from credit card companies. Neither AMEXAMEX management nor the accounting department had any experience with charge card operations. Rather than creating a separate accounting function for the card division, Reed had assigned AMEXAMEX’s existing comptroller’s office to handle all of the card transactions. This proved an overwhelming amount of paperwork, and within a few months of the introduction, the comptroller’s office was flooded with unprocessed transactions.Compounding the internal problems was the fa ct that customers were not paying on time, while AMEXAMEX was required to pay merchants within 10 ten days after a transaction. The card division had lost over more than $4 million dollars in its first two years and an additional $14 million by 1962. One of the Howard L. Clark’s first moves after becoming AMEXAMEX president in 1960 was to try to sell the card division, ironically enough, to DinersDiner’s Club. The negotiations failed because of antitrust issues and so AMEXAMEX kept its card. In spite of the card problems, though, AMEXAMEX as a whole was financially stable, with 1959 profits of $8. million from $69. 6 million in revenue and Travelers Cheque sales of over more than $1 billion. Clark instituted measures to help the ailing card division, such as requiring cardholdercardholders to pay their balance within thirty days, raising the annual fee to ten dollars, raising the discount fee (the percentage merchants had to pay AMEXAMEX every time the card was used at their business), and imposing stricter credit requirements for cards issuance. The card division finally achieved profitability in 1962. By 1967, the card business yielded a net income of $6. 5 million, or one-third of the company’s total profit.The American Express CardAmerican Express Card had surpassed the Travelers Cheque to become the most visible symbol of American Express. Marketing Strategy and Advertising The first AMEXAMEX President president to place a high priority on advertising was Howard L. Clark. Before he took office in 1960, AMEXAMEX’s annual advertising budget was only $1 million. Clark increased it every year thereafter and in 1962 replaced their ad agency, Benton & Bowles, with Ogilvy, Benson, and & Mather. The new agency designed AMEXAMEX’s first modern ad campaign with the slogan â€Å"The Company for people who travel. This tag line promoted AMEXAMEX’s travel and card products in a single campaign that conveyed AMEXAMEX’s one-stop travel shopping expertise. Campaigns The now-famous tag line, â€Å"Don’t leave home without it,† was developed by Ogilvy & Mather in the early 1970s. AMEXAMEX wanted a â€Å"synergy tag line† like the other Ogilvy-produced line: â€Å"The company for people who travel. † Ogilvy came up with â€Å"Don’t leave home without them† for the AMEXAMEX Travelers Cheque, â€Å"Don’t leave home without us† for AMEXAMEX travel services, and the â€Å"Don’t leave home without it† tag line for the American Express CardCard.Ads for the Travelers Cheques featuring screen actor Karl Malden speaking the taglinetag line ran for 21 years. In 1974, AMEXAMEX debuted its now-familiar â€Å"blue-box logo,† on which the words â€Å"American Express† are printed in white outline over a square blue background. Ogilvy & Mather tried several conceptual approaches to use with this tag line for the card, and eventually h it upon the idea of replacing everyday and unknown actors in the ads with endorsers whose names were famous, but whose faces were not as familiar. This was referred to as the â€Å"Do You Know Me? campaign. The ads typically began by showing the face of a moderately well-known celebrity, as with Neil Simon, and then showing a close-up of his or her American Express CardAmerican Express Card to reveal their his or her identity. The ads implied that using an American Express card Card would get the cardholdercardholder â€Å"recognized. † This was an obvious example of marketing the card as a status symbol. Acquisitions In the 1970s, American Express executives looked for ways to grow the business beyond Travelers Cheques and credit cards.The fact that Master Charge and the BankAamericard (later to become Visa) were already issuing cards themselves suggested that AMEXAMEX would soon lose market share of its Travelers Cheques and that the growth of its cardholdercardholder base would slow. AMEXAMEX also had been worried for some time that the company’s small size and high profits made it an attractive takeover target. A large acquisition would make a takeover less likely and give AMEXAMEX a new source of income. Clark chose a company three times the size of AMEXAMEX with the 1968 acquisition of Fund America Group, based in Novato, CACA.It included Fireman’s Fund Insurance Company and four mutual funds that were later sold off. Other relatively small changes by Clark included the acquisition of the magazine which was later of US Camera magazine (later renamed Travel & Leisure) and the creation of the Travel Related Services (TRS) division in 1971, which pooled the travelers Travelers checkCheque, the card, and other travel and tourism businesses. AMEXAMEX also organized its banking operations under the renamed American Express International Bank Corporation (AEIBC).The year 1977, in which Clark left as president, saw AMEXAMEX with $250 millio n in profits and 8 million cards generating $10 billion in charge volume. The American Express Company. had three divisions when James D. Robinson took over for Clark as CEO in 1977: Travel Related Services (TRS), American Express International Bank Corporation (AEIBC), and Fireman’s Fund (FF). Robinson pursued an aggressive acquisition strategy. In 1979, he purchased fifty 50 percent of a cable TV equipment and programming partnership with Warner Communications for $175 million with the idea of selling financial products through cable television.A few months later in 1980, American Express bought First Data Resources for $50 million. First Data was a computerized billing operation that processed Visa and MasterCard transactions for banks. This was only a warm-up for Robinson, and in 1981 AMEXAMEX merged with Shearson Loeb Rhoades Inc. , the second largest public brokerage firm in the country behind Merrill Lynch. AMEXAMEX continued its expansion into a financial conglomerate by purchasing two additional brokerage houses and a real estate company. The international investment bank Trade Development Bank Holdings S.A. (TDB) was acquired in 1983 for $520 million to shore up AEIBC and focus its operations on trade finance and international private banking. That same year, AMEXAMEX purchased Investors Diversified Services (IDS) for $773 million, a Minneapolis- based company that offered mutual funds, life insurance, annuities, and financial planning to middle- income consumers. The investment bank Lehman Brothers Kuhn Loeb Inc. was acquired in 1984 for $360 million, and AMEXAMEX again added to its brokerage cache by acquiring E. F. Hutton & Co. n 1987 for almost $1 billion. Marketing Strategy and Advertising American Express advertising conveyed the prestige associated with tthe he cards. CardholderCardholders are called â€Å"card members,† and the year they became members is on their card – —signaling membership to a club. American Ex press cards Cards were perceived by many as status symbols, signifying success and achievement. AMEXAMEX sought to maintain this elusive image through advertising, impeccable service, promotions, bonuses, special events, and so on.The introduction of goldGold and platinumPlatinum cards to the credit card industry further enhanced their special cachet. By 1985, AMEXAMEX was spending $500 million a year in marketing. â€Å"Marketing is our number one priority,† said Robinson. [2] Service Customer service was a key element of American Express’s marketing program. One of James D. Robinson’s favorite sayings was â€Å"Quality is our only form of patent protection. †[3] Before he became CEO, he Robinson developed a comprehensive system for measuring AMEXAMEX’s service quality.His goal was to have customer service employees handling more than 99 percent of the requests without any mistakes. AMEXAMEX measured the time it took a customer service representat ive to answer the phone and the time it took for a replacement card to arrive. The company established a Quality University in Phoenix, AZ, where customer service representatives and their managers were trained to deliver excellent service. In addition, AMEXAMEX set up a committee of managers from throughout the corporation that who met to discuss new ways of measuring and improving quality. â€Å"Quality Conferences† were even held to disseminate and implement quality initiatives throughout the organization. Besides the internal monitoring, AMEXAMEX constantly surveys surveyed its customers and merchants by mail and by phone to ensure that the level of service remains remained consistent. AMEXAMEX developed a database system, which was was updated weekly, of customer information that tracks tracked spending patterns, age, and 450 other characteristics. This database enabled enabled the company to target specific marketing efforts to the customer segments most likely to respo nd.AMEXAMEX also useds this system to recruit new merchants by demonstrating what AMEXAMEX can could do for their businesses using real customer data, not projections. For example, a customer that who shopped at a certain store might receive a discount for shopping there again based on an agreement between the merchant and AMEXAMEX. Throughout its lengthy history, American Express has earned a reputation for the highest level of customer service. One representative personally delivered a card in the middle of the night to a stranded cardholdercardholder at Boston’s Logan airport.Another case involved an AMEXAMEX representative in New Delhi who arranged for another representative’s brother (a military helicopter pilot stationed close to the caller) to deliver cash to an AMEXAMEX Gold Gold cardholder cardholder who was stranded in a remote village in the Himalayas. One Enterprise Robinson and his top executives envisioned a transformed company structure called â€Å"One Enterprise. † The One Enterprise vision would make AMEXAmerican Express a one-stop financial and travel services powerhouse with each division cross-marketing its products to the others.The cardholdercardholders could obtain travel services from TRS; property & and casualty, flight and travel, and life insurance from Fireman’s Fund; financial advice and other products from IDS; and brokerage and investment banking services from Shearson Lehman Hutton; while the wealthier international clientele would be pampered by AEIBC (renamed American Express Bank Ltd. or AEB in 1986). Each division would in turn push American Express CardAmerican Express Cards to any of their customers who weren’t already cardholdercardholders or higher- end goldGold or platinumPlatinum cards to those who were.Advertising in the 1980s The â€Å"Do you know me? † campaign was targeted at older successful, affluent businessmen that who traveled a lot. The campaign’s nine years h ad seen these cardholdercardholders quadruple to 12 million, a full 40 percent of that market segment. Fearing that growth in this segment would soon level off, AMEXAMEX looked to stimulate growth in other segments. In the 1980s, women were attaining more powerful business positions in large numbers. AMEXAMEX wished to target this segment of the population with ads tailored towards young urban professional women. In 1983, women comprised only 2. million of current AMEXAmerican Express card holders, only 20 percent of the women the company thought were eligible for the card. Testing had shown that women did not respond positively to the older ad campaign. Marketing data from the early 1980s showed that consumers thought that status and prestige came not necessarily from huge wealth or success, but from a varied and exciting life. Ogilvy & Mather came up with the â€Å"Interesting Lives† campaign. It aimed to position AMEXAmerican Express cards Cards as symbols of people with i nteresting and multifaceted lives, people with unusual hobbies or who have had unconventional careers.The AMEXAmerican Express cardCard, the ads indicated, gave these holders the opportunity to indulge in their varied interests, to be spontaneous by going to the Australian Outback or climb a mountain, for example. Rather than featuring celebrities, the ads showed confident independent women using the American Express cardAmerican Express Card to take their husband to dinner or their kids to lunch, bantering with a flirtatious man in a bookstore, or leaving a sporting goods store with a briefcase and a lacrosse stick. â€Å"The American Express cardAmerican Express Card,† the tag line says, â€Å"It’s part of a lot of interesting lives. The ad campaign included and featured women in ads, and soon the volume of female applicants doubled the number of men who applied for the card. By 1984, 27 percent of AMEX cardAmerican Express holdercardholders were women compared to t en 10 percent in the late 1970s. The â€Å"Interesting Lives† campaign also had an unanticipated, but positive, side effect: young men also started applying for the card in large numbers. This convinced AMEXAMEX to tailor some of the ads specifically towards them. One such ad was titled â€Å"Young Lawyer. It showed a father talking to his son over lunch about his decision not to join the family firm. The father was disappointed until the son got a job at the District district Attorney’s attorney’s office. The sons pays with the American Express cardAmerican Express Card and the father says, â€Å"The pay must be getting better over at City city Hallhall. † Even though these campaigns did very well, AMEXAMEX’s marketing strategy for their core potential cardholdercardholders had become stale. They dropped the â€Å"Do you know me? † TV ads in 1987 and Ogilvy & Mather devised a new series of print ads called â€Å"Portraits. Renowned photog rapher Annie Liebovitz was recruited to photograph celebrities rarely shown in advertisements. The ads showed these celebrities in a more intimate, playful light, without the pomp and circumstance that celebrity ads usually employed. America’s Cup yachtsman Dennis Connor played with a sailboat in his bathtub in one shot, while in another basketball center Wilt Chamberlain and jockey Willie Shoemaker were shown standing back to back wearing identical white suits. Another shot showed Christian rock singer Amy Grant walking on water while in yet another Tip O’Neill was shown at the beach under an umbrella.The only text was their names, the date they became â€Å"members,† and the taglinetag line that was to become one of AMEXAMEX’s most enduring: â€Å"Membership Has Its Privileges. † The ads received much praise for their ingenuity and quirkiness. That same year, AMEXAMEX unveiled its first major TV campaign for its goldGold card. The goldGold card a dvertising was handled by McCann-Erickson, and their ads for this campaign focused on showing successful businessmen in lavish surroundings. One businessman lounged in a jacuzzi complaining about an award acceptance speech he had to give.His wife told him to just enjoy the honor. Another ad featured a successful businessman taking time from his busy schedule to learn the piano. These ads were the subject of criticism for their celebration of the opulence and free-spending attitudes of the decade. A year and a half later they gave the goldGold card account to Chiat/Day. This agency’s approach was over the top compared to McCann’s more subtle ads. Chiat targeted a younger, more affluent clientele by touting excessive spending. One ad in particular showed a man in a Jjaguar, sprawled with his legs dangling over the side.A voice says, â€Å"For when you finally run into that 1953 XK120. † The phrase â€Å"Worth its wait† flashed on the screen while a sax play ed sensually in the background. The ads were supposed to increase the goldGold card base by targeting younger wealthy men. By 1989, AMEXAMEX was spending $250 million annually on advertising, more than twice as much as Visa’s and MasterCard’s budgets combined. This expenditure reflected the numerous marketing initiatives underway to expand the company’s cardholdercardholder base, including efforts to attract more women, students, senior citizens, and small companies.Additionally, the company developed a major ad campaign to get cardholdercardholders to use their cards at retail shops, not just fine restaurants and boutiques. Research showed that the majority of card purchases were made with other credits cards while only high-ticket items were charged to AMEX cardAmerican Express Cards. This campaign was developed by Chiat/Day, which in 1991 won the green Green card and Optima accounts from Ogilvy & Mather, AMEXAMEX’s agency of record for 30 thirty years. Chiat/Day immediately developed a new taglinetag line for the company: â€Å"The Card.The American Express CardAmerican Express Card. † The initial ads developed by Chiat/Day sought to convey the iconic status of the card, by superimposing oversized flagship green Green cards into images of a restaurant, a golf course, the tail of a Concorde jet, and the Easter Island monoliths. Cause Marketing Since 1981, AMEXAMEX has also embarked on many cause-related advertising campaigns where a percentage of the proceeds were donated to a specific charity. In fact, the company is credited with coining the phrase â€Å"cause-related marketing. Between 1981 and 1984, Amercian Express donated to more than 45 different charitable organizations. Most of these donation drives occurred at the local level, such as when American Express donated two cents to the San Francisco Arts Festival each time Bay Area card members used their cards. By encouraging card members to spend more to support the cause, AMEXAMEX profited from increased card usage. Similar campaigns around the country generated total donations in the tens of millions of dollars and increased card usage in locations where a cause-related marketing campaign was active by an average of 25 percent.The company’s first national cause-related marketing campaign was organized in 1983 to raise money for the Statue of Liberty Restoration Fund. To build awareness for the program, American Express developed an $4 million advertising campaign that included print, radio, and television advertising. Each time a card member used his or her card, a one cent donation was made to the fund. For every new account opened, AMEXAMEX donated one dollar to the fund. Donations were also made for Travelers Cheques and travel purchases. Between September and December 1983, American Express gave $1. 7 million to the Statue of Liberty Restoration Fund.Card usage rose 28 percent nationally in the first month compared with the previo us year, while new card applications increased 45 percent. [i] . 1 Following its early success with cause-related marketing campaigns, AMEXAMEX developed more than 90 ninety programs in 17 seventeen countries. One of AMEXAMEX’s best-known campaigns was the â€Å"Charge Against Hunger. † The Charge Against Hunger, begun in 1993, was a charity effort in which the company donated a certain amount of money to hunger relief agency Share our Our Strength every time a cardholdercardholder used an AMEX cardAmerican Express Card to make a purchase during the holiday season.The 1993 Charge Against Hunger raised $5. 3 million. To raise awareness for the campaign, AMEXAMEX produced a series of advertisements featuring information about the charity and detailing the specifics of the program. Between 1993 and the last year of the program in 1996, the Charge Against Hunger campaign raised more than $21 million. AMEXAMEX Success Due to the acquisition-based growth and cross-marketing concepts, which were fashionable corporate strategies in the 1980s, Robinson was hailed as a savvy CEO in building up AMEXAMEX in this fashion.By the end of 1984, AMEXAMEX had developed $61 billion in assets and posted annual revenues of $13 million. The TRS division, which supplied AMEXAMEX with almost three-quarters of its earnings, was selling $13 billion worth of travelers checksTravelers Cheques, while 20 million cards were generating $45 billion in charges. AMEXAMEX had name recognition of 75 percent and its services were used by 14 percent of the population, more than any other financial company. Credit Card Competition Heats Up By 1985, AMEXAMEX had issued over more than 20 million cards that were producing more than $47 billion in billings.That compared with Visa’s 115 million cards with $82 billion in billings and MasterCard’s 103 million with $62 billion in billings. About 3. 3 million of AMEXAMEX’s cards were GoldGold cards (first offered in 1966) an d about 60,000 were PlatinumPlatinum (introduced in 1984). Visa had 3 million higher- end â€Å"Premier Visa† cards and MasterCard had 2. 5 million â€Å"Preferred Customer† cards (both began issuing them in 1982) with annual fees of $55. In spite of their similar numbers, AMEXAMEX still had a clear advantage in the high-end market with GoldGold card charges totaling $13 billion while Visa and MasterCard only had only $7. billion combined. While Although most credit cards had features similar to AMEXAMEX’s charge cards, prestige still seemed to win people over in wanting AMEXAMEX’s cards and in using them for their more expensive items. One analyst said, â€Å"If you want to buy an expensive car, you tend to buy a Mercedes or a Cadillac, not a souped-up Honda. † For AMEXAMEX customers, the fact that MasterCard and Visa were accepted at over more than 4 million sites while AMEXAMEX was only accepted at only 1 million sites was mitigated by the fact that only AMEXAMEX had offices in many remote locations capable of handling almost any travel emergency.Indeed, prestige seemed to be so important to consumers that they signed up at twice the expected rate for AMEXAMEX’s $250 annual fee PlatinumPlatinum card Card and eventually numbered six times what AMEXAMEX expected. In the 1980s, the standard American Express Green card had an annual fee of $35 and offered $1,000 check cashing at representative banks and AMEXAMEX travel offices, the ability to withdraw $500 from ATM’s, and $100,000 travel accident insurance. For a $65 annual fee, GoldGold cCard members upgraded to $2,000 in checks cashed and a credit line of $2,000.The PlatinumPlatinum card Card allows members to cash up to $10,000 in checks, get $1,000 from ATM’s, $500,000 in travel insurance, and nonresident privileges in over more than 25 private clubs around the world. AMEXAMEX offered these cards to only about 5 percent of its American cardholdercardho lders who charged more than $10,000 a year and hadve good payment histories. Higher-end credit cards (e. g. , goldGold, platinumPlatinum) proliferated in the mid-1980s as the market for standard cards became relatively saturated.Credit card delinquency rates were increasing due to banks’ efforts to shore up profits by signing up more cardholdercardholders. The average cardholdercardholder possessed seven cards, so banks had to find other ways to compete. Many consumers were frustrated with banks because they maintained high interest rates on their cards (around 19 percent) in spite of the fact that the prime lending rate had dropped 14 points since 1982. The banks defended their card rates, citing the cost of processing millions of card transactions every week.In order to appease their customers, banks offered special perks like such as bonus points and cash back offers. They also began issuing goldGold and platinumPlatinum cards to attract more customers. These â€Å"eliteà ¢â‚¬  cards were used 50 percent more often than regular cards, and the average purchase with them was 150 percent greater than with a normal card. Visa and MasterCard gained enough GoldGold cCard members, 12 and 11 million, to beat AMEXAMEX’s 6 million. Optima Unveiled AMEXAMEX responded to the increasing popularity of credit cards by issuing its own credit card, called Optima, late in 1987.Not only would it compete head-to-head with the revolving credit bank-issued cards, but also it would do so with a much lower interest rate of 13. 5 percent. Even the annual fee was lower, priced about half what other credit cards charged at $15. Optima also allowed AMEXAMEX to greatly expand its card base without damaging its upscale image since because it was a separate card. AMEXAMEX only offered Optima initially to its 8 – to 9 million current AMEX cardAmerican Express holdercardholders. Since Because these customers were accustomed to paying their balance monthly, they were c onsidered the lowest-risk segment.Banks were worried that Optima cardholdercardholders would use the new credit card for regular purchases and the AMEXAMEX charge cards for their T&E expenses, dropping regular and high- end bank cards in the process. Citicorp, the nation’s largest issuer of bank cards with close to 15 million, countered AMEXAMEX’s new card by lowering its rates to â€Å"preferred customers† to 16. 8 percent from 19. 8 percent. Visa USA Inc. even urged its issuing banks to stop selling American Express Travelers Cheques in protest.AMEXAMEX replied with a Travelers Cheque ad that told consumers, â€Å"If your bank doesn’t sell them, go to one that does! † In order to compete, most of the charge and credit cards furiously began cutting prices and offering special incentives. Co-branded cards also became very popular. Visa had 768 affinity programs approved by the end of 1987. Most MasterCard and Visa silver Silver and goldGold cardhol dercardholders also got rebates on hotels and plane fare in addition to rental car discounts. WhileAlthough AMEXAMEX did not offer any affinity cards, it did continue to offer benefits and special offers.In addition to its Buyer’s Assurance program, which doubled the manufacturer’s warranty up to a year on items purchased with its cards, AMEXAMEX also began its Purchase Protection program, which insured these items for 90 ninety days against theft, loss, fire, or accidental damage up to $50,000. AMEXAMEX also offered its GoldGold and PlatinumPlatinum members free rental car insurance. By the end of 1988, after being out for only 18 months, Optima ranked as one of the top ten credit cards in terms of cardholdercardholder volume.Optima had 2 million cardholdercardholders with over more than $3 billion in outstanding balances. The interest and fees for Optima was were nearly pure profit sincebecause AMEXAMEX spent so little, only $100 million, in starting it. American Exp ress had the advantage of an established cardholdercardholder base to offer it to and merchants already willing to accept it. Thanks to Optima and improved marketing to young men, women, and students, AMEXAMEX’s domestic share of the card market increased to ten 10 percent by 1989, totaling 22 million cards (30 million worldwide).AMEXAMEX’s charge volume also increased to 27 percent or $69 billion, which lead all card issuers. Visa meanwhile had 52 percent cards hare with 115 million cards, and MasterCard had 38 percent with 84 million. The remainder was primarily Sears’ Discover card, which had about 28 million cards outstanding. Sears issued Discover in 1985 using its existing customer credit base of 40 million accounts, low interest, no fee, and a cash- back program as advantages. AMEXAMEX had signed up over more than 2. 5 million merchants to accept its card, compared to Visa’s almost 7 million merchants.Nevertheless, AMEXAMEX maintained that because consumers only charged only 15 percent of the possibley number of items that could be charged, its main competition was not the other card companies, but rather, cash. AMEXAMEX Applauded Success continued through the late 1980’s. Revenue and profits grew in every division and earnings topped the $1 billion mark in 1986. In 1989 AMEXAMEX grossed over more than $26 billion and netted $1. 2 billion with a travelers checkTravelers Cheque float of over more than $4 billion to invest.Compounded earnings and sales over the last decade had risen nine 9 percent and 13 percent every year, and AMEXAMEX had a return on shareholder equity of more than 15 percent a year. Their direct marketing department was the fifth largest in the nation selling electronics, furniture, jewelry, luggage, mutual funds, and insurance. AMEXAMEX’s publishing arm included â€Å"Travel & Leisure† and â€Å"Food & Wine† magazines, with having a combined circulation of over more than 2 millio n, and they planned on acquiring or creating more than ten more magazine titlespublications.Overall, analysts were recommending AMEXAMEX stock, saying it was undervalued based on its future earnings potential with AMEXAMEX being called â€Å"one of the great success stories of the last twenty years. †[4] AMEXAMEX STUMBLES Problems in Iits Subsidiaries James Robinson III had spent a total of $3. 5 billion in acquiring Shearson, IDS, TDB, Lehman, and E. F. Hutton, and in the process had built American Express into what was one of the most respected and well-known companies in the USUnited States. AMEXAMEX was rated by one poll as among the top three brands in America behind only Coca-Cola and McDonald’s.In the late 1980s, AMEXAMEX was the largest diversified financial services company in the world. But Ddespite the apparent success, however, signs of future troubles appeared as early as the early 1980s. In the latter years of that decade, the financial empire slowly bega n to crumble. While Although each subsidiary had its share of problems, consensus seemed to be that AMEXAMEX had expanded too rapidly without enough attention as onto how all the parts would fit together and so could not manage itself efficiently. AMEXAMEX’s first big problem with a subsidiary came in 1983.An insurance industry price war had caused Fireman’s Fund (FF) to lower its policy prices and add business. A surprisingly large number of claims on these policies caused AMEXAMEX to have to add $230 million to FF reserves causing a $141 million fourth quarter loss for the unit and a $22 million loss for AMEXAMEX. AMEXAMEX managers said they were blindsided by the losses while FF managers said they had tried to warn their superiors at AMEXAMEX but were ignored. AMEXAMEX profits dropped 11 percent in 1983 due to FF losses, breaking the much hallowed 35- year earnings record.AMEXAMEX later sold off Fireman’s Fund to the public, keeping the life insurance divisio n, but retaining only 27 percent of the property and casualty business. In spite of their magnitude, the problems at Fireman’s Fund had little impact on AMEXAMEX as a whole. They did, however, draw attention to AMEXAMEX’s management style and what impact it might have on the other divisions. Shearson Lehman Hutton, the nation’s second largest securities firm, was probably the biggest disappointment of all.After the acquisition, Shearson imposed its existing no no-bbonus onus policy for clerical employees at the investment bank where everyone was up to that point used accustomed to annual bonuses. Shearson also imposed its much less generous medical benefits plan on Lehman employees and even made them take lie detector tests. Most job openings after the acquisition were filled with Lehman employees in an attempt to appease them, but this wound up alienating Shearson employees. Lehman also lost many top clients after the acquisition including ABC, Chase Manhattan, and Uniroyal.Big M & A deals, the reason Lehman was acquired in the first place, never materialized. The loss of clients and internal talent was too big to overcome and only a trickle of small deals and its brokerage operations kept the unit going. Even with 1988 revenues of $10. 5 billion (same as Merrill Lynch), the unit’s earnings had dropped to 81 eighty-one cents from $4. 34 two years earlier. Robinson admitted he wanted to sell Shearson, but couldn’t because he wouldn’t get the price he wanted. Card CompetitionIn 1991,, AMEXAMEX debuted its â€Å"Membership Miles† loyalty program, which gave customers one point for every dollar spent on the card. These points could be exchanged for credit in frequent flier airline miles. The program had the dual benefits of attracting more customers and increasing the spending volume of customers who wanted airline miles. The success of this program’s introduction was offset, however, by problems with the Op tima card. Though Optima made the company one of the ten largest credit card issuer issuers worldwide, AMEXAMEX’s first offering in the credit card category was fraught with problems.The company’s decision to offer the card only to existing cardholdercardholders, who were accustomed to paying their entire balances monthly, led to millions of dollars in bad debt. AMEXAMEX failed to account for the fact that a significant portion of charges on their classic cards were business expenses for which the cardholdercardholder was reimbursed. Therefore, the majority of Optima cardholdercardholders used that card strictly as a credit device, and as a result only five 5 percent of Optima accounts paid the full monthly balance.The resulting losses rose to 10 percent of outstanding balances in 1992, which was double the industry average. In its first three years, Optima cost American Express $2. 3 billion. The company was forced to re-evaluate its Optima portfolio, and relaunched t he card in 1992 with a slightly different payment structure. In 1994, the company pared the number of Optima cardholdercardholders to 3 million from about 3. 5 million. By 1996, Optima’s 5. 2 percent annual loss rate was only marginally higher than the 4. 6 percent industry average.Other card companies were able to make up enormous ground on the American Express by offering bonuses, service benefits, and cheaper fees to both merchants and consumers. Bank cards certainly lacked the prestige factor, but, as one analyst noted, â€Å"Prestige is less of a Nineties concept than an Eighties concept. †[ii]2 AMEXAMEX’s traditional points of difference were service and prestige, but 1990s’ consumers appeared to place greater value on â€Å"function [and] utility. †[iii] Compounding problems was the launch of Visa’s brilliant ad campaign, â€Å"Visa.It†s Everywhere You Want to Be. † That campaign highlighted desirable locations, resorts, events, restaurants, etc. – none of which would take American Express. AMEXAMEX was under siege from a number of new competitors, such as Capital One, which in 1991 was the first company to issue so-called â€Å"teaser rate† cards with introductory rates well below the standard 19 percent. Other sources of competition came from co-branded or â€Å"affinity† cards, which were becoming increasingly popular with consumers seeking added value in the form of additional goods or services.AMEXAMEX had the opportunity to issue one of the first co-branded cards back in 1985, when American Airlines approached the company with a proposal for a joint credit card that would offer frequent flier miles for dollars spent on the card. AMEXAMEX rejected the offer and American Airlines inked a deal with Citibank instead, which that attracted 4 million cardholdercardholders within a decade and set off a co-branding trend. AMEXAMEX similarly declined to enter into a co-branding agre ement with AT&T in 1990.Within five years, the AT&T card had more than 11 million cardholdercardholders. Many corporations began to issue co-branded credit cards, including General Motors, Shell, all major airlines, and Sony. Other entities with co-branded cards included NBA basketball teams, the University of Alabama Alumni Association, Star Trek, and the National Wildlife Federation. Between 1990 and 1992, the number of American Express cardAmerican Express Cards in circulation dropped by 1. 6 million, or six 6 percent. The company was in danger of seeing its competitive advantage disappear.Attempts to diversify into financial services had largely failed, and the company’s flagship card business was faltering. â€Å"We were losing relevance with our customers,† said current CEO Kenneth Chenault. â€Å"We were trying to be all things to all people with a few products. †[iv] This developments led AMEXAMEX’s board to force James Robinson to resign as CEO i n 1993. AMEXAMEX FOCUSES ON ITS CORE BUSINESS Divestiture After forcing Robinson’s resignation, American Express selected Harvey Golub to succeed him as chairman and CEO in February 1993.Golub was a nine-year veteran of the company, having come to the IDS division from McKinsey & Co. consulting firm. He immediately initiated a series of divestitures to reduce AMEXAMEX’s holdings. Golub negotiated the sale of the Shearson brokerage operation and the Lehman Brothers investment bank. These sales, combined with other profit-saving cutbacks, eliminated 50,000 of the company’s 114,000 workers. Following these moves, the now-leaner company was in a position to focus on its core competencies: charge and credit cards, Travelers Cheques and travel services, and select banking and financial services.In the midst of these cutbacks, Golub pursued aggressive plans for high growth in the card sector. In mid-1994, he announced plans to introduce up to 15 fifteen different credi t cards. Ready to improve on the company’s first credit card offering – —Optima – —AMEXAMEX introduced its next card, called Optima True Grace, in August 1994. The Optima True Grace card Card featured a low introductory rate of 7. 9 percent and came with an automatic â€Å"grace period† of 25 twenty-five days after a purchase, during which time no interest would be charged to the cardholdercardholder.Additionally, the company would waive the annual fee for cardholdercardholders who used Optima True Grace at least three times per year. These features came as a result of a year-long research effort that included 4,000 consumer interviews. The Optima True Grace launch was accompanied by a $40 million marketing campaign starring lifestyle maven Martha Stewart. In its first year, Optima True Grace was selected by about 1. 4 million users, a figure that doubled the company’s membership predictions.The flexibility of Optima True Grace marked a departure from AMEX cardAmerican Express Card policies of the past. As bank-issued cards exploded in the 1980s by enticing customers with low annual fees, cash back offers, partnerships, points bonuses, and other special offers, AMEXAMEX continued to charge high annual fees and flatly refused to partner with other corporations despite offers from companies such as American Airlines. The gap in market share between AMEXAMEX and Visa and Mastercard only widened, and Golub reflected in 1995, â€Å"We should have seen what was happening. . . We were inflexible. We were arrogant. We were dreaming. †[v] To spur growth in the card category, Golub sought to greatly increase merchant acceptance of American Express cardAmerican Express Cards. In October, responding to the requests of over more than 14,000 card members, AMEXAMEX inked a deal with Wal-Mart stores to have its cards accepted at over more than 2,300 Wal-Mart locations. During 1995, other retailers such as Laura Ashley, S hopRite, Service Merchandise, and Vons Supermarkets signed on to accept AMEX cardAmerican Express Cards. That year, research by the ompany showed that based on card member purchasing patterns, AMEXAMEX customers charged 86 percent of their spending to AMEX cardAmerican Express Cards. Said CEO Kenneth Chenault, â€Å"If our customer wants to use the American Express cardAmerican Express Card at a hot dog stand, we want to be there. †[vi] In addition to adding merchants that would accept the cards, Golub worked to improve relations with the existing merchant roster. In the past, AMEXAMEX was able to demonstrate to merchants that its cardholdercardholders charged a higher volume with their cards.For many merchants, this mitigated the fact that AMEXAMEX’s merchant discount was considerably higher than Visa or MasterCard’s. Purchases by AMEX cardAmerican Express holdercardholders carried discount fees of over more than 3. 5 percent, compared to merchant discounts low er than 2 percent for Visa and Mastercard. By 1991, however, the case for accepting American Express was not as compelling. Not only were there a greater number of Visa and MasterCard goldGold cardholdercardholders, but also nearly 90 percent of all AMEXAMEX customers carried bank cards as well.AMEXAMEX needed to retain as many merchants as possible, since overbecause more than half of its annual revenues came from merchant discounts. The turning point came in 1991, with the so-called â€Å"Boston Fee Party. † A group of Boston restaurant owners coordinated a boycott of the American Express cardAmerican Express Card because they believed the discount rate to be too high. American Express worked rapidly to repair relationships with these and other merchants. By 1996, the discount rate for AMEXAMEX purchases was below less than 3 percent and all the Boston Fee Party boycotters had been re-signed.Golub also attempted to better relations with current cardholdercardholders. In Oct ober 1995, the company expanded its Membership Miles program to include points bonuses for retail merchandise and gourmet gifts, as well as more travel offerings such as car- rentals, hotel stays, and vacation packages. This revised program was named Membership Rewards, and points earned through the program had no limit or expiration date. The renewed focus on American Express’s core business led to the first new campaign for American Express Travelers Cheques in twenty years.Though still dominating the Travelers Cheques category with $64 billion in annual worldwide sales and a 45 percent market share, AMEXAMEX was looking to protect its lead against competitors like Visa. In 1994, a new $15 million advertising campaign updated the classic Travelers Cheques commercial, which traditionally featured hapless travelers falling prey to criminals while abroad and then experiencing firsthand the safety and security features of the Travelers Cheques. The new crop of ads focused on th e â€Å"Cheques for two† feature, which enabled the same checks to be shared between two parties.Instead of getting stolen, the Travelers Cheques in the new ads were only lost, and features featured lost-and-found employees in travel destinations describing the quirky items they encountered in the line of duty. The ads were intended to illustrate in a more lighthearted fashion the benefits of AMEXAMEX Travelers Cheques. In 1995, the company renamed its IDS division â€Å"American Express Financial Advisors† (AEFA) in an effort to provide with a more uniform image to its customers.AEFA, which provided financial and estate planning, annuities, mutual funds, life insurance, pension plans, 401(k) plans, and loans and accounting services to businesses and individuals, was part of the â€Å"select financial services† that contributed to AMEXAMEX’s core competencies. A One-third of AMEXAMEX’s net income in 1996 came from AEFA, which controlled $130 billio n in assets. After firing Chiat-/Day, AMEXAMEX re-hired Ogilvy- & Mather, who introduced a corporate ad campaign themed, â€Å"Do More. † This global ad campaign extended the company’s advertising to include financial services and travel in addition to its card businesses.The purpose of the campaign was to underscore the transformation that had taken place at American Express during the previous several years, given that the company had: 1)Sold or spun off subsidiaries and refocused on businesses operating under the American Express brand; 2)Broadened its traditional charge card business to include revolving credit, co-branded cards and other products aimed at specific customer segments, such as students and senior citizens; 3)Expanded its global travel network; )Begun a major expansion of its financial services businesses; and 5)Introduced new products to its corporate services customers. â€Å"For much of our history, our company’s brand was defined by our ca rd and Travelers Cheques businesses,† said John Hayes, executive vice president of Global Advertising. â€Å"Now we are extending our brand to a variety of other products and services to mirror both where our company is and where it is going. What will remain consistent is our vision— — to become the world’s most respected service brand. The new advertising campaign was designed to capitalize on several of American Express’s historical brand attributes: trust, customer focus, travel, and financial insight. â€Å"American Express is one of the very few global brands in the financial services arena,† Hayes added. â€Å"All over the world, people’s experiences with our travel services, card products, and financial advice have defined our brand’s characteristics, reflecting the reasons that both corporations and consumers are loyal to American Express. Themed, â€Å" American Express Helps You Do More,† the campaign attempt ed to bridge both the company’s historic strengths and, as well as its newer initiatives. The pool of advertisements included commercials that featured a range of American Express products and services, as well as those designed to focus on individual businesses, such as American Express Financial Advisors. It also included ads for the American Express charge cards, â€Å"Our advertising used to be about a limited number of products and services, and was often defined by the people who used them.This campaign stresses our growing number of services and what American Express can do for you,† Hayes said. The television spots will ruran on network, cable, and spot television, supported by newspaper and magazine ads in a variety of publications including USA Today, tThe Wall Street Journal, The the New York Times, Time, and Newsweek. Card Wars American Express launched its first co-branded card in 1995 with Delta Air Lines. The airline miles card was called the Delta SkyMi les Optima, and within two years of its introduction it was the number-two airline affinity card with over more than 1 million cardholdercardholders.American Express forged co-branding relationships with other partners, including Hilton Hotels, ITT Sheraton, and the New York Knicks. Beginning in 1992, American Express used comedian Jerry Seinfeld in advertising that emphasized the card’s flexibility and added humor to the personality of the brand. In 1997, as part of the â€Å"Do More†Ã¢â‚¬â€œ themed campaign, American Express used ads featuring Seinfeld to emphasize the card’s acceptability in locations such as supermarkets and gas stations. In one ad, Seinfeld stops at a gas station to fill up.The premise is that he aims to put an even dollar amount into the car, presumably so he can pay with cash without breaking change. Upon reaching the target amount, he gives the pump an extra squeeze that pushes the total a few cents over. Onlookers gasp in dismay, until he pulls out his American Express cardAmerican Express Card in dramatic fashion and pays at the pump. Another ad starred Seinfeld and an animated Superman. The unlikely duo were depicted walking along a city block, when Superman spotted Lois Lane in peril at the front of a grocery store line.When the two come to her rescue, Lois informs them that she has forgotten her wallet. Superman pats his suit where pockets normally would be located and sighs, â€Å"I can’t carry money in this. I’m powerless. † Seinfeld exclaims, â€Å"I’m not! † and begins spinning around in a blur brandishing an American Express cardAmerican Express Card. Again in dramatic fashion, he swipes the card and pays for the groceries. American Express signed one of the leading athletes in the world in 1997 when it inked a five-year, $30 million endorsement contract with Tiger Woods.That year, Woods appeared in print ads and television commercials that promoted American Express Fina ncial Advisors. In one television spot titled â€Å"Tiger Wants,† the phenom golfer discusses discussed personal aspirations, which included â€Å"tak[ing] care of the ones who took care of me† and â€Å"help[ing] people who need help. † The campaign also featured Tiger’s father, Earl, who explaineds that with the help of an American Express Financial Advisor, he was able to retire early and dedicate himself to helping Tiger reach his goals.John Hayes characterized the endorsement deal as follows: The appeal of Tiger Woods – —and, indeed, of his father, Earl – —transcends the world of golf. While Tiger’s tenacity, work ethic, and abilities are outstanding, we also recognize him as a person whose achievements are the result of perseverance and an incredible focus on a goal. That kind of earned success is a hallmark of financial success as well. [vii] In appraising AMEXAMEX’s position, Hayes also noted: The market b ecame very segmented, and we needed to catch up with that to become more relevant to more segments.So now we’ve gone from a brand that was basically represented by one card product to one that has 25 products. That’s a drastic change. [viii] Our toughest balancing act is not to lose our traditional core customers and our reputation for premium quality and service while we enact new initiatives to expand against other segments. We’re tracking that on a quarterly basis to make sure we don’t go too far in one direction or the other. [ix] Marketing and Advertising In 1999, American Express unveiled the biggest new card launch since Optima, with the â€Å"smart smart cardcard† Blue.Blue, which was launched with a $45 million advertising campaign, was considered a smart card because it contained an embedded chip that enhanced security for Internet purchases using a home-encryption system. American Express issued Blue cardholdercardholders a home card car d-swiper free of charge, which could be used for Internet transactions. The card targeted the 25 percent of Americans that owned computers and used sophisticated consumer technology, as well as another 25 percent of the population learning to use such technology. Unlike other American Express cardAmerican Express Cards, Blue carried no annual fee.One perceived risk of the Blue marketing campaign was the implication that the other American Express cardAmerican Express Cards were not secure for use with Internet purchases. Said Alfred Kelly, president of the American Express Consumer Card Services Group, â€Å"I would rather be cannibalizing myself than have the competition do it. †[x] Launch advertising involved television, print, and subway advertising, as well as event marketing. The introductory television ads focused on the technology aspect of Blue. One ad showed a sea of amoeba dancing and multiplying over a rock-and-roll soundtrack.This ad was intended to demonstrate th e â€Å"evolving credit† aspect of the card, which meant that Blue would improve as the company added new functions features to it. Another ad emphasized Blue’s payment flexibility – —unlike other American Express cardAmerican Express Cards, monthly balances could be carried into the next month – —by showing the card bent, pulled, and reshaped by robotic arms to the sounds of a classical score. In addition to major network broadcasts, these ads ran during television programs targeting young people, such as Fox’s â€Å"The X-Files† and â€Å"Futurama. Print ads appeared in newspapers and magazines, as well as in sports clubs and on restaurant table-top menus. The ads did not use the familiar Roman Centurion soldier logo associated with other cards, choosing a new look that suggested a compact disc with blue concentric circles bordered by white. American Express also sponsored a concert in New York called â€Å"Central Park in Blue. † The concert was promoted by a â€Å"street team† of sharply- dressed scooter riders, who used handheld swipers to enable cardholdercardholders to pick up free tickets at nearby Blue information kiosks.These marketing activities were designed to give the card â€Å"a different, modern, more hip feel,† said Alfred Kelly. â€Å"We wanted to break out. †[xi] American Express continued to market cards based on prestige. In 1998, it introduced the matte Matte black Black Centurion Card – —otherwise known as the â€Å"black Black cardCard† – —for elite clients. To obtain an invitation invitation-o