THESIS ON

A STUDY OF CUSTOMER SATISFACTION STUDY OF AMERICAN EXPRESS CREDIT CARD USERS

Submitted in partial fulfillment for the award of post Graduate in Management

AREAS OF SPECIALIZATION

: MARKETING & H.R

SUBMITTED TO: INSTITUTE OF MARKETING & MANAGEMENT QUTAB INSTITUTIONAL AREA NEW DELHI-110016

SUBMITTED BY: UTKARSH SINGH SISODIA ROLL NO: 011-I-134 COURSE: PGDM SESSION: 2011-13

UNDERTAKING:
I, Utkarsh Singh Sisodia, certify that the project report entitled Customer satisfaction study of American Express is an original one and has not been submitted earlier either to IMM, New Delhi or to any other institution for the fulfillment of the requirement of a course of post Graduate Diploma in Management (PGDM)

Place: New Delhi Date:

Utkarsh Singh Sisodia Roll No. 011-I-134

ACKNOWLEDGEMENT
Through this acknowledgement I express my sincere gratitude towards all those people Who helped me in this project, which has been a learning experience. I am thankful to my project guide Dr. Robert KR. Das Pattanayak for guiding me Throughout this study without his help this thesis would have not be completed. It is my sincere endeavor to express my gratitude towards all those who directly or indirectly contributed to this project Work.

SYNOPSIS
The credit card industry in India has registered an encouraging growth in recent times, but the usage pattern of credit cards remains a point of concern, those in the industry say. There has been a seven-fold increase, with the number of cardholders touching over 38 lakh. These figures point towards the fact that the credit card industry in India is growing at a brisk annual rate of 30 per cent and is expected to grow at a similar rate in the coming years. While issuing the cards may seem to be easy, the challenge for the banks lies in being able to manage their portfolios by keeping the delinquency levels at the lowest and customer satisfaction levels at the highest. Customer satisfaction is the key to success. You want customers to be happy with the products and services you provide. If they feel they have received good value for their money, your business will prosper. Getting your customers to tell you whats good about your business, and where you need improvement, helps you to be sure that your business measures up to their expectations. Apart from attracting potential card users, customer retention is also one of the most important factor influencing a card issuers success. American Express entered the Indian Market earlier than most other players present today. AmEx has been able to generate a large base of cardmembers till date. With the influx of new financial institutions in the card market, people have started using cards on a more regular basis. The level of services provided by these organisations is increasing day by day. AmEx needs to keep pace with, if not score over these companies on service levels being provided to the customers. In order to ensure that the existing customers stay loyal, AmEx has to ascertain whether its existing customers are satisfied with its current service offerings.

This research has tried to study the satisfaction levels of a sample of 100 American Express cardmembers. These respondents each hold AmEx cards, which may be of different kinds. These could be any one of the 8 different cards offered by American Express.

CONTENT OF THESIS 1. Title Page

2. Outline-Approved by the Executive President (Original) 3. Undertaking 4. Acknowledgements 5. Contents 6. Synopsis 7. Introduction 8. Methodology 9. Main analysis/report 10. Observations & Findings 11. Conclusions & Recommendations 12. Limitations of the Study 13. Annexure 14. Bibliography

INTRODUCTION
The credit card industry in India has registered an encouraging growth in recent times, but the usage pattern of credit cards remains a point of concern, those in the industry say. Seven years back, India had a base of around five lakh credit cards. There has been a seven-fold increase, with the number of cardholders touching over 38 lakh. These figures point towards the fact that the credit card industry in India is growing at a brisk annual rate of 30 per cent or similar in coming up Years and American Express Company is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge cards and credit cards, Travelers Cheques, travel, financial planning, business services, insurance and international banking. Customer satisfaction is the key to success. Getting your customers to tell you what's good about your products or services, and where you need improvement, helps you to ensure that your business measures up to their expectations. No matter what type of business you're in, surveys are a valuable tool that help you collect the information you need to understand, evaluate, and enhance customer satisfaction. Customer satisfaction surveys help to: 1. Improve customer, client, or employee loyalty. 2. React quickly to changes in the market. 3. Identify and capitalize on opportunities. 4. Beat the competition. 5. Retain or gain market share. 6. Increase revenue. 7. Reduce costs.

It takes a lot less money to increase your retention of current customers than to find new ones-but I know I don't give it as much effort as I should because it does take a lot of energy and effort! Customers like to interact with people who do more than process and handle transactions. They often require access to technical information and expect good interpersonal and communication skills. To accomplish these objectives, companies need to share missions, visions and goals. They need to monitor changing customer expectations and modify the delivery of service and product quality to match these expectations on an ongoing basis.

Indian Credit Card Scenario The credit card industry in India has registered an encouraging growth in recent times, but the usage pattern of credit cards remains a point of concern, those in the industry say. Seven years back, India had a base of around five lakh credit cards. There has been a seven-fold increase, with the number of cardholders touching over 38 lakh. These figures point towards the fact that the credit card industry in India is growing at a brisk annual rate of 30 per cent and is expected to grow at a similar rate in the coming years. This fortifies the view that conservative purchasing ideas are giving way to the big in-thing. But it is the usability that raises doubts.

According to a survey by the Credit Card & Management Consultancy (CCMC), 71 per cent of first time credit card applicants in the country have expressed the need for advice on appropriate card selection despite the plethora of cards available in the market. Through this survey it has come to realise a long felt need of potential and existing cardholders for advice on suitable selection of a credit cards. The whole idea behind the introduction of the credit cards was to increase the purchasing capacity of the cardholder. With this in mind, the foreign banks launched a credit card blitzkrieg on the Indian customer. The innovations have already begun to show their effect. The Standard Chartered Bank has seen its credit card base shoot up after the launch of its Global Rupee Card in March last year. It has seen the fresh issuance of global card increase by more than one lakh, and the bank now has a base of more than half a billion. But the real challenge for the banks is to make the holder spend more on the card. Going by estimates, India has a long way to be anywhere near the matured markets. The markets like the United States and England have an average annual card spend of 1,300 and 3,600 dollars respectively. The credit card players will have to think about simplifying the foreign exchange transactions. When one uses the card, it is entirely his responsibility to make sure that exchange controls have been complied with. The banks that issue the cards, have made it abundantly clear that one has to look out for himself. It is upto him to find out the facts of regulatory life. The real point of worry is the spending on the credit cards. According to estimates, the average card spending in India is even less than that in Indonesia. Those in the credit card business say that per capita credit card spending in India is about five hundred dollars (Rs 21,500), whereas in Indonesia, it is about 678 dollars (Rs

29,154). At present there are over a dozen players in the credit card market in India, and the fact is the foreign banks are clearly the leaders. The leaders will surely be identified by the innovations for the card users. But the alarm has been raised for the banks by the figures that show that while the average usage in Malaysia is 27 times annually, in India it is only 11 times. Some of the key factors impacting the cards business in India are limited credit, wide geographical spread, limited telecommunication infrastructure and emerging regulatory controls. The other players feel that the card acceptance base in India has to be widened. Suggestions include credit card usage at petrol pumps and railway bookings. They also point out that though the cards business has been in the country for long, but even today the insurance premium cannot be paid by card. Though LIC is talking about the introduction of this facility to customers, but its turning into reality may take time. There is talk of widening the card business with new features, but the present scenario does not paint a positive picture, with many loopholes remaining to be plugged. Of the twenty million tax payers in India, more than ten per cent of them are cardholders. Those in the industry point out that this figure is not bad, considering the fact that, the cards business is still in its initial stages. However, the players feel that the business has not reached an optimum level to say that they are making money. Even the largest player in the Indian market does not still have the economies to make the card business really profitable in India, despite the fact that it has more than one million credit card holders. Less than two per cent of private consumption spending in India is done on cards.

While issuing the cards may seem to be easy, the challenge for the banks lies in being able to manage their portfolios by keeping the delinquency levels at the lowest. Huge investments in systems and infrastructure are, therefore, a necessity. The increase is being attributed to new ideas such as round-the-clock functioning of card issuing banks and pulling out all stops even at a loss, to grab a sizeable share of the expanding pie. Not to be left behind in this race, even the big brother, the State Bank of India in association with GE Capital entered the card business. The spurt in the card business has gathered momentum during the past couple of years. For instance, the HongKong & Shanghai Banking Corporation (HSBC), was in the credit cards business since seven years, but from 50,000 card holders in 1997, it has about three lakh card holders now. Indias fastest growing credit card company - SBI Cards 2.5 lakh credit cards 25 cities16 months. The joint venture between Indias largest bank State Bank of India and one of the worlds leading financial services companies GE Capital, SBI Cards & Payment Services (SBI Cards) has issued 2.5 lakh credit cards across 25 cities (the largest distribution network in the payment card industry) within 16 months. Thereby achieving the target in the fastest period seen in Indias payment card industry. SBI Cards & Payments Services attributed this success to SBIs enormous brand equity, and unparalleled retail branch network coupled with GE Capitals payment card process and technology expertise. He also highlighted Speed, Simplicity and Service as the key drivers of growth for the SBI Card. Speed Unique and exclusive 14-day average turnaround time, coupled with availability of the SBI Card in 25 cities in just 16 months. Simplicity Simple application process with minimum documentation. Service 24 hours a day/7 days a week

local call access to the SBI Card Helpline across 25 cities. As a result of the focus on the Speed, Simplicity and Service growth platform, SBI Cards today offers the largest distribution and widest cash advance network for Indias middle class customers. SBI Cardholders can access cash for emergency purposes from over 158 SBI branches across 68 locations in India. INTERMEDIARIES: In their attempt to increase their market share, credit card companies are opting for Direct Sales Agents. These DSAs are paid a flat rate against the approved applications. They are also provided with bonuses either in cash or in kind at regular interval or if they cross a certain minimum limit. The DSA team comprises aggressive salesmen who visit different organisations and professionals. They collect filled forms and produce them to the bank for approval. After cards are issued they also deliver the same to the individuals. PROMOTION The changing trends in the payment systems are global and even in India revolve around the change in customer needs and the evolution of financial markets. Traditionally Indians like to pay in cash or at the most avail the services of a bank. As a result credit card companies had to educate the consumers and spread awareness of the uses of its products. The companies have tried to address this issue through promotional campaigns: Placing of take away firms of credit card at more than a thousand merchant establishments. Appointing of DSAs Using business magazines and news papers for advertisement.

 Mailing of forms along with contests to professionals and middle management executives etc. Tapping the get member route Reducing their minimum eligibility criteria and changing income documentation structure. Introduction of photocards. Tying up with durable consumer goods manufacturer ( e.g. Onida, Philips ) to sell their products. Providing ATM facility to their card holders Travel assistance via telebanking.

Methodology

The objectives of this project are:

a) To ascertain whether the existing customers (cardmembers) of American Express are satisfied with the service offering as regards the Cards Operations division. b) To identify the areas of improvement and formulating recommendations for the service offerings of the Cards Operations Division of American Express Bank. c) At the corporate level, the objective of this project is to ascertain whether the service offerings of American Express Cards Operations Division are upto the mark and to provide a means for delivering better value to its customers. d) At the academic level, the objective of this project is to give insights to the students on how to ascertain the level of satisfaction of a service organisation. Getting your customers to tell you what's good about your products or services, and where you need improvement, helps you to ensure that your business measures up to their expectations. No matter what type of business you're in,

surveys are valuable tools that help you collect the information you need in order to understand, evaluate, and enhance customer satisfaction.

Research methodology
RESEARCH DESIGN

A good design is often characterized by objectives like flexible, appropriate, efficient, economical and so on. Generally the design that minimizes biases and maximizes reliability of the data collected & analysed is concerned a good design. The design that gives the smallest experimental error is supposed to be the best design in many investigations. This research intends to highlight various aspects related to service offerings of American Express Cards Operations Division. The factors like customer perception, their attitude towards service offerings of AmEx and their card preferences have been analysed to judge the satisfaction levels of American Express cardmembers.
DATA COLLECTION METHOD:

Data collection for this research was done primarily through filling up of questionnaires. A sample of 100 American Express customers were chosen for this research. The data for this study was collected in a manner that is qualified for the following general qualities of data: Validity: Pace: It measures what it is supposed to measure. Data was collected quickly enough and at an affordable cost. Reliability: Repeating the same methods produced the same results.

In this research, the major emphasis was on unraveling the cardmembers perception about the services associated with AmEx, in order to know their level of satisfaction. Special emphasis was laid on collecting extremely relevant specific data, in order to meet the objectives effectively. The data collection needs that can be classified more or less under the following categories: Facts: These include measurement of anything that actually exists or has existed. The types of facts covered for this study were behavioral that covered the data related to the AmEx cardmembers perception about the services and other benefits associated with AmEx. Opinion: It covered the most important data that was critical in understanding the behavior of AmEx cardmembers towards the service offerings of AmEx and the Cardmembers expectations from AmEx.

SECONDARY DATA The research required a lot of information about the Credit Card market, status of Credit Card mechanisms in India, trends in the market and about the competition. The sources of obtaining this secondary data were the Internet and the AmEx manual PRIMARY DATA Primary data for this research was collected by way of the questionnaire method. Herein, structured questionnaires were distributed to AmEx cardmembers. The sample for this research consisted of 100 existing customers of AmEx that included Executives and Professionals.

The sampling technique used was the Non-Probability sampling. This is so because the data about the 100 existing customers of AmEx was obtained from the companys database. The primary data that was collected, consisted of the customer perception regarding AmEx cards and their levels of satisfaction.

LIMITATIONS OF THE PROJECT There are two basic limitations of this project. They are: This research is restricted only to the National Capital Region. In this research, emphasis is on theoretical interpretations. Only a generic analysis of data has been done. No quantitative techniques have been used.

9.Main analysis/report Comparative Position of Foreign Banks in India for FY 2000 (Rs mn) DEU B 2622 6609 215 511 1973 5432 10601 21673 6751 17621 10577 20992 2.7 4.8 0.3 17.2

HSBC CITI STAN ABN BNP Income Net Profit Net Worth Deposits Advances Investments Spread (%) NPAs / Net worth (%) RONW (%) CAR (%) 12476 1215 8373 87547 43023 49185 3.1 5.3 14.51 10.3 18778 2513 9915 102032 66201 42300 4.7 7 11965 7302 1853 1188 7170 5760 50060 34229 43188 38964 31400 27171 4.8 3.9 12.2 2

BOA ANZGAMEX 8715 1528 6867 25117 36574 13013 3.6 10 14630 4450 1801 277 11323 2579 84777 14183 42334 8919 48862 12266 3.8 3.6 0.1 14.9

25.35 25.84 20.63 10.90 9.41 22.25 15.91 10.74 10.5 9.5 10.1 9.5 10.4 12.9 10.9 10.1 CHARGE CARDS

Charge cards are similar to Credit cards, except that on the due date for payment, you have to pay the whole outstanding amount. You can't part settle the amount and pay the rest later.

COMPARISON Select Card Issuers Brand Acceptance Card Type

American Express American Express Bank of India Bank of India Canara Bank Canara Bank Citibank NA Union bank of India

Gold International Green International India card Taj Premium Can card Domestic Can card Domestic Diners Club Domestic India card Domestic

Amex Amex Master Domestic Master Master Visa Diners Master

COMPARISON OF CREDIT CARDS Card Issuers American Express Brand Card Type Acceptance

Gold Amex International American Express Green Amex International ANZ Grindlays Bank Gold Master Domestic ANZ Grindlays Bank Gold Visa Domestic ANZ Grindlays Bank Silver Master Domestic ANZ Grindlays Bank Silver Visa Domestic Bank Of India Gold Navy Visa Domestic Bank Of India Standard Navy Visa Domestic Bank Of India Visa Gold Visa Domestic Bennett Coleman Times Master Domestic Bank Of Baroda Bharat Premium Visa Domestic Bank Of Baroda Own BOB Domestic Bank Of Baroda Exclusive Master Domestic Bank Of Baroda Global Visa International Bank Of Baroda Gold Visa Domestic

Gold/Preferred International Citibank NA Gold/Preferred International Citibank NA Indian Oil Master Citibank NA Silver/Classic International Citibank NA Silver/Classic International Citibank NA Women Visa Citibank NA WWF Domestic HSBC Classic Master HSBC Classic International HSBC Classic Visa HSBC Classic International HSBC Gold Master HSBC Gold International HSBC Gold Visa HSBC Gold International ICICI Solid Gold International ICICI Sterling Silver Visa ICICI True Blue Visa SBI Classic Visa Standard Chartered Classic International Standard Chartered Classic International Standard Chartered Cricket International Standard Chartered Executive International Standard Chartered Executive International Standard Chartered Gold International

Citibank NA

Master Visa Domestic Master Visa Domestic Visa Domestic Master Domestic Visa Domestic Master Domestic Visa Visa Domestic Domestic Domestic Master Visa Visa Master Visa Visa

With the credit card truly becoming an international citizen, issuers have begun highlighting the value-added features offered along with the basic product. While some of them are offering attractive interest rates, others are luring customers by their reward schemes. With a plethora of choices on offer it is not easy to come to a decision on any particular card. Comparison in service offering: 1. First, there's the credit limit. All banks have different limits set for customers depending upon the type of card in their possession. Even within a particular type of card, limits may vary depending upon the credit worthiness of the individual. This depends, among other things, on the gross income of the individual and the period for which he/she is using the card. However, some banks like Citibank and American Express have cards that have no set credit limit. Amex has a charge card, which has no upper limit and allows one to spend as much as one likes (provided the holder repays the amount at one go). 2. Second criteria could be the lost card liability. If one is travelling and has lost his/her credit card then reporting the loss will not be much of a problem. HSBC, Citibank, Stanchart and Amex can be reached from any corner of the world for information on one's card as well as for reporting the loss. Others will mail a replacement card to the holder's mailing address whereas Amex will replace the card within 48 hours free of cost. Liability for a lost card is nil for Citibank, HSBC, Amex (once the bank is informed about the loss) and the Stanchart photo card. However, the non-photo card carries a liability of Rs 1,000.

3. Nowadays, almost all cards come with various goodies attached. These include airline ticket booking and insurance benefits on lost luggage and accidental deaths. HSBC, for example, offers discounts of 3.5% on domestic airfares and 6.5% on international ones if tickets are charged to their cards. The latest in line of value added features are the rewards programs. Here a cardholder earns a certain number of points by spending a particular sum of money. Stanchart, for example uses a conversion of Rs. 125 (spent in India) or Rs. 80 (spent abroad) for one point. HSBC, on the other hand, only allows points collected to be squared against a discount on the annual fees. A minimum of 350 points is needed to get a discount on the annual fee. Citibank awards one point on spending Rs100. The table below gives an indication of the various value-added services on offer from various banks. Value Added Features Citibank Stanchart HSBC Hotel discounts Travel fare discounts Yes Yes Yes Free global calling card Yes (G) Yes Lost baggage insurance Yes Yes Yes Accident insurance Yes Yes Yes Insurance on goods purchased Yes Yes Yes Waiver of payment in case of accidental death Yes* Household insurance Yes (G) (G) - Gold card / * Rs20, 000 for Classic and Rs40,000 for Gold Amex Yes Yes Yes -

Deciding on the right Credit card 1. How much is the joining fee and the annual fee? Generally, a card with a higher annual fee enjoys more benefits like higher credit limit, higher accident insurance cover, accessibility to airport lounges, travel discounts etc. OF at least the used to be the case. With cutthroat competition between the card issuing banks, players are ready to waive joining fees and also one-year membership fees for anyone. Grab these offers, or negotiate this for yourself. 2. How much is the Add-on card fee? If you are interested in buying add-on cards for your children, spouse or friend, ask for the add-on card fee. Remember that you will be settling the bills on the add-on card that you so touchingly gift to someone dear to you - the statement will come to you, and the responsibility for payment is yours (as far as the credit card company is concerned) 3. What is the interest rate? This is actually a question that you should be asking fairly soon in the discussion. Remember, while the up front one off fees are bread and butter for the credit card Company, this is the jam! If you're the sort who forgets to pay on time, or likes to live it up and live off credit, the interest rate would be of paramount importance. Most credit card companies charge anywhere between 2% to 3 % per month. (Read a whopping 35% to 43% per year). That's where they make their gravy, and that's where you pay! It is always advisable to pay off the entire amount on due date, or, if you have a large bank balance, look for card companies that provide the transfer balance facility. The balance transfer rate is

lower for a certain period (say six months) and then the normal rates apply. But again this is a temporary solution to a chronic problem. 4. What is the reach? Not an important question - most outlets in India accept both the Master card and the Visa card, and most credit card companies provide Visa or Master cards. So its fairly simple, and doesnt need much head scratching - they're all more or less the same. One thing you could do is to check out for the Automated Teller Machines nearest to your house or work place (ATMs almost all credit card companies now provide you the facility of withdrawing cash from machines - I guess for things that cards just cant buy. These machines are called ATMs, and are helpfully scattered all over the city/country/world). Having more ATM outlets in Thailand wouldnt be of any relevance to a person who rarely travels abroad, though it may certainly be a goal to work towards after buying the card. Please also remember that Amex credit cards are not part of the Visa/ Master chain, and have a separate chain of outlets where its accepted. 5. Is it a Global card? Now this could be useful to you if you are an overseas traveler. A Global card can be used for paying expenses in foreign currency just like you use a credit card to pay in rupees. Nowadays, a Global card is being issued at the same cost as for a similar domestic one. It is better to have a global card, especially if there is no premium attached. 6. How useful are branded or affinity cards? A partnership between a card issuer and the non-profit, social or lifestyle association is what results in an affinity card. This is for providing financial rewards to the group or association. E.g. Citibank Womens card, Citibank

WWF cards. Citibank WWF Visa card donates a percentage of the transaction value made through the card to the WWF fund for its environmental conservation activities. A subscription to such cards helps ease the conscience though it provides no monetary value. A partnership between a bank card issuer and a commercial partner result in a co-branded card. This entitles the cardholder to lots of freebies, prizes, discounts on co-branded products. Logic: If a customer is loyal to one brand, he will want to purchase the other. So if you were loyal to a particular brand, it would make sense going for those co-branded cards. e.g. Citibank and IOC, Bank of India and Taj group of hotels etc. 7. Whats the lost card liability? Most Card issuers mention in the brochures that lost card liability is Rs 1000. Be careful, that is actually AFTER it is reported to the Bank. The liability is actually unlimited before reporting (in cases like this, you would actually thank the credit limit because though the liability is unlimited, the ceiling should logically be your credit limit, and the outlets accepting your stolen card should actually check that you (or the person who stole your card) havent exceeded your credit limit). Avoid banks that make you liable for card misuse for a single minute after reporting it. 8. Are there any freebies? Citibank gives a Ponds gift hamper free on subscription to its Citibank Women card. Personal accident insurance for Air, Road or Otherwise is packaged along with the subscription. Also Baggage cover, Purchase Protection cover and credit shield is bundled free of cost along with the card. If you feel one these parameters are important, then settle for the one that gives a higher cover.

9. Is immediate cash withdrawal possible? Check out if the Bank has any ATMs near your house or workplace. This surely helps in times of emergency. The cost component for a cash withdrawal could be classified as follows: Service fee (transaction fee) each time you pull out money, and Interest rate for the period for which you have used the money until settlement date. If you are going to withdraw cash frequently, better watch out for this cost. 10. How long is the free credit period? The days of credit one gets depends on the statement date and the date of transaction. On an average, you could assume you'd get around 20 days of free credit. However, if you buy just after the statement date, you could end up getting upto 50 days of credit. Look for cards that give you the highest free credit period! 11. Is a Helpline available? A 24-hour Helpline service from the Card Company helps the cardholders during the non-banking hours. Reporting of theft, checking of available credit limit and other enquiries can be made by the cardholder round-the-clock. In the end, like everything else in life, the card you want is really up to you - what matters the most to you - credit, reach, the freebees, international reach or a combination of parameters. Use our card category on the left bar to simply list out the names of the cards, or choose by bank name and see the cards they offer. Or look for cards offering the lowest interest rate. Of the lowest charges on cash withdrawal (believe me, it gets to be a serious consideration as one goes along). Go to our shortlist card section, and search for cards based on any criteria that you want. Happy hunting and stay careful - you may like to use our section on how to use the card carefully to minimize the chance of its misuse by someone else.

DEBIT CARDS

Debit card is an ATM card on the move. Today more than 60 million people have debit cards that carry the logos of the two major payment card companies. That number is expected to grow dramatically as debit cards become increasingly popular. Many debit cardholders confuse debit cards with standard ATM cards. Not all debit cards are equal. Debit cards with the logo of one of the two major payment card companies are ATM cards with clout. They can be used to obtain cash from ATM machines, and also to make purchases anywhere the logos on these cards are accepted -- over 16 million merchants worldwide. Debit Card gives you the freedom to access your Savings or Current Account at merchant locations and ATMs. Whenever you make payments, the amount will be instantly debited to your account. All your purchases and cash withdrawals will be in the currency of the country you are in, while your account will be debited in rupees. So you needn't carry travelers Cheques or foreign exchange the next time you travel. There aren't many Debit cards in India as of now. The HDFC International Debit Card comes at an annual fee of around Rs. 250/-. This charge is waived off on one additional card taken on your account. There are charges involved on cash withdrawals and balance queries. Normally the cash withdrawal charges are around Rs 55/- and a meager charge of Rs.10/- for balance. If you already have a savings or current account with the debit card issuer, you might just have to file an application form. The company then couriers the card across to you in around a weeks time. If you dont have an account, you will have to open an account first and request for the debit card to be issued to your residence. The Debit card does have a daily limit, which could be somewhere around Rs.

15,000 at ATMs, and Rs. 10,000 at merchant locations. This again is subject to the balance available in your account.

SIGNIFICANCE OF THE PROJECT

American Express Bank has been facing stiff competition from new entrants. They are all vying for a large share in the fast growing Indian card market. The Indian card market has been growing at the rate of 30% per annum. AmEx needs to keep pace with, if not score over these companies on service levels being provided to the customers. Research has revealed that consumers today are more discerning than ever before about what they want from their credit cards. What they are looking for in a card issuer is - real value, genuine savings and exceptionally good service levels. Apart from attracting potential card users, customer retention is also one of the most important factor influencing a card issuers success. In order to prevent its cardmembers to shift to the services of other Issuers, AmEx wants to ensure that their service establishment is better than that of the other players in the Indian market. Therefore, AmEx wants to find out the satisfaction levels of its customers. Obtaining the accurate data on the satisfaction levels of its cardmembers, will ensure AmEx to make appropriate changes in its service offerings if necessary and in turn will help AmEx in increasing the amount of customer loyalty. In order to ensure that the existing customers stay loyal, AmEx has to ascertain whether its existing customers are satisfied with its current service offerings. American Express wants to ascertain whether its services are upto the mark and wants to provide a means for delivering better value to its customers. This project will help AmEx in understanding the satisfaction levels of its existing customers.

American Express Bank (Established 1921)

MISSION STATEMENT

Provide the best as defined by the customer. At the lowest cost for value delivered. With the fastest time to market for new products and services.

American Express Company is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge cards and credit cards, Travelers Cheques, travel, financial planning, business services, insurance and international banking.

Position as on 31.03.2000 Deposits Advances Net Profit

Amount in Crores 1418.34 891.94 27.70 Branches Semi Urban Urban Nil nil

Total 4

Rural nil

Metro 4

Total 895

Staff Officers Clerical Others Women 591 252 52 N.A.

SC/ST N.A.

Financial Parameters 1999-2000 CRAR Interest Income / W. Net NPAs/ Non-Int. Income Funds Tier I Tier Total Net Advances /W. Funds II 9.91 0.18 10.09 4.32% 10.96% 5.14% % % %

Operating Profit/W. Funds 2.70%

Return on Assets 1.02%

Business Per employee 290.24 lacs

Profit Per employee 3.17 lacs

Branches in India

Calcutta PO Box 2311, 21 Hemath Basu Sarani (Old Court House St), Calcutta 700 001, West Bengal; Tel: +91 33 2430233; Fax: +91 33 2488896; Tlx: (953) 217574 Chennai

187 Mount Rd, Chennai 600 006, Tamil Nadu; Tel: +91 44 8524313; Fax: +91 44 8524306; Tlx: (953) 0416006 Mumbai 7th Floor, Maker Chambers IV, Nariman Point, Mumbai 400 021, Maharashtra; Tel: +91 22 2833293; Fax: +91 22 2872968; Tlx: (953) 01183808 Postal Address: PO Box 507, Mumbai 400 001, Maharashtra; New Delhi PO Box 21, Hamilton Hse, A Block, Connaught Place, New Delhi 110 001; Tel: +91 11 3327602; Fax: +91 11 3715352; Tlx: (953) 03166420

THE HISTORY OF AMERICAN EXPRESS

The History of American Express is a fascinating one, filled with interesting and sometimes quirky characters who through a combination of brains, perseverance and luck shaped the companys development during the past century and a half. Their vision of what American Express should become has changed over time, resulting in a company that has had many faces during its long history. It all dates back to 1841- to the city of Buffalo, New York when Henry Wells established a service to carry goods, money, valuable and financial paper from the East to the West Coast of America. His first trip took him and a carpetbagfull of gold, silver and securities from Albany to Buffalo. The trip took four days and it brought Express service to Buffalo. In 1850, Henry Wells whose firm, Wells and Company had earned a reputation as an innovator in the Express trade merged with its major competitors to form a new entity called American Express Company. Henry Wells was elected its President with William Fargo as its Vice President. A few years later John Butterfield, another founder of American Express Company, instituted an additional separate enterprise- The Overland Mail- with

the Pony Express- which was to contribute one of the most colorful episodes in the history of the American Frontier. Today this group provides banking services outside the United States through its branches and the offices of subsidiaries in 25 countries, and through more than 2000, correspondent banking relationships. Important activities include export-import and working capital finance, corporate and project finance, foreign exchange and operations service. Banking operations started in India in Bombay in the year 1922. In the first half of the 20th century American Express continued to grow rapidly. It was the only company to provide financial services in some cities during the low point of the Great Depression. Throughout the 1950s, the company was consistently growing in all areas of business interest-Travel, Travel Related Financial Services and International Banking. It was in 1950 that American Express made its entry into Indias capital city, New Delhi. 1958 was a hallmark in the history of American Express. The American Express Credit Card was introduced in US dollars and Canadian dollars and won immediate acceptance (In 1969, the word Credit was dropped from the name of the American Express Card). 1960 saw the emergence of a new management headed by the Companys seventh President, Howard L Clark. Under his new direction was planned expansion of Travel Related Services and its extension into new service areas to meet the demands of an increasingly sophisticated and affluent clientele. The use of the American Express Travelers Cheque grew phenomenally after 1960, largely under the impetus of strengthened and innovative marketing. It was in 1983 that the American Express Travel Related Services Company, Inc. came into existence as a subsidiary of the American Express Company.

IDS Financial Services Inc., a leader in the financial planning field because a part of American Express in 1984. It offers individuals and businesses sound financial plans, products and services to fulfil those plans. American Express was the first company to make Personal Banking and Financial Services available at sea. This was done in conjunction with Cunard Line on board Cunards flagship vessel, Queen Elizabeth II. In May 1985, AEIBC was renamed American Express Bank Limited (AFBL), to enable the Company more directly capitalize on the American Express name. In 1986, for the first time, the company passed the milestone of one billion dollars in net income. In 1986, it also relocated to its new Headquarters building in New York Citys World Financial Center. In June 1987, the TRS company introduced an exciting new product, the Optima Card available to American Express Card members in the United States. In addition to enjoying the same unparalleled benefits that the American Express Card provides, the Optima Card offers Card members the added facility of extended payments on purchases at an extremely attractive rate of interest. In November 1987, the American Express TRS in India introduced the US Dollar billed Corporate Card to the Indian Corporates. The Card was a revolution in the then nascent Card market as American Express was the only Card issued in India that could be used overseas. The Card usage had certain restrictions as the Card issuance and usage was strictly under the Reserve Bank of India guidelines. In May 1993, the Indian Rupee Personal Card was introduced. The Card was provided to a set of exclusive customers and even the Advertising campaign that ran said- Quite frankly the American Express Card is not for everyone. The Company continued making new forays into the rewards and benefits that the Card members could enjoy. This Card and all subsequent Card products billed in Indian rupees were valid for use in India. Nepal and Bhutan, thus making the American Express Cards the only products to be valid in Bhutan.

In August 1996, American Express Corporate Card billed in Indian Rupees was launched for Corporates in India. This is a Charge Card Product and does not have a competition till date in the market. This product provides exclusive Travel and Entertainment benefits to the Corporate Traveler. In April 1998, the Indian Rupee Gold Card was launched. In November 1998, the Indian Rupee Global Revolving Credit Card the GRCC- was launched. The product proposition was termed the best Marketing Proposition for the year. In October 1999, Global Validity was introduced on all Indian Rupee billed Card products. In October 2000, the American Express Gold Credit card was launched. This product redefines Gold Standards in Credit Cards in India. By contrast, the rough and tumble freight forwarding businesses that launched the American Express story are long gone. Other activities that were once the mainstays of the Company are no longer its primary lines of business. Changing times and changing customer needs have guided American Express to reinvent itself continually, and that capacity for reinvention makes American Express unique. It has demonstrated a remarkable ability to survive and even thrive despite significant setbacks and changing external forces- mergers and takeovers; government interventions; industry turmoil and consolidations; scandals and even wars. Through this long journey there is, however, one characteristic of American Express that has remained constant its commitment to providing extraordinary service to its customers, no matter who or where those customers may be. It was just as true in 1914, when American Express was helping stranded tourists in Europe at the outbreak of World War 1, as it was in 1998, when employees were assisting customers during the national crisis in Indonesia.

The American Express Card has now been in existence for over 40 year. In India, the American Express Card presence has been since 1987. The Organizational structure of the Company vis--vis Card business has always been changing with respect to the changes in the Companys Strategic Objectives over the years.

THE AMERICAN EXPRESS CARD BUSINESS The Unique Operating Proposition 5 core elements distinguish how the American Express Card works to serve Card members.

1. 24 hours Customer Service We offer 24 hrs Customer Service in 5 cities (Delhi, Mumbai, Chennai, Calcutta and Bangalore). We employ superior technology (Call Re-routers) to service our Customers in these cities from Delhi. 2. Card member Recognition American Express Card is an exclusive Card Product. Most American Express Card members are the top-of-the-line customers in the market. Amex Card members are High Net worth Individuals. Research proves that Amex Card members spend approximately 2.5 times on their Card compared to VISA or Master Card holders. 3. No pre-set spending limit Amex Charge Cards do not have a pre-set spending limit (Charge Card). The charges on the Card are approved on the basis of the financials provided by the CM initially and the subsequent spending and the payment patterns.

4. The Charge Card difference The Amex Card worldwide is predominantly a Charge Card. The Credit Card (Optima/GRCC) have been launched well after 30 years of being in existence. Our mainline revenue is still the Charge Card. 5. Global Travel Service Office (TSO) Network American Express is the worlds largest Travel Service Network. We have over 1700 offices in more than 130 countries. Procedure for acquiring The American Express Card How to get one? To become an American Express Card member, the prospect must meet the following criteria The prospect must send in an Application Must be above 18 years of age Must meet the American Express Card Approval Criteria Various Amex Cards have different Approval Criteria The issuance and usage of the Card is governed by the local market governing bodies, regulations and guidelines. When approved, is provided with a Card and a Card membership number. Cards are valid for 3 years The Card member can use the Card at all American Express Service Establishments.

HOW DO AMEX GETS ITS CARD MEMBERS? AmEx sources its Card members through the following channels Marketing, Sales and Advertising External Sales Agencies Direct Mailers Call-ins Walk-ins Take ones Representative offices Rep Get Member Member Get Member Staff Get Member Conversions Cross Selling Opportunities

AMERICAN EXPRESS CARD

World-wide privileges ( Many of these privileges may or may not be available on the Indian Rupee

Card Products. There may be other privileges exclusively for the India market). American Express Cards worldwide provide a host of privileges to its Card members. Many of these privileges have over the time, have grown to be brand names in themselves-like the Moneygram. They not only provide immense value to our 44 million Card members, they have also in the past acted as life

savers for many American Express Card members- like Global Assist that provides Doctors-on-call to the card members. The various privileges that the Amex Card provides to its Card members are: 1. Assumed Hotel Reservations When a CM books his Hotel room with the Amex Card as the Payment Instrument, he is assured of the following. The room reservation is guaranteed and is held till 1200hs the next day. If upon the arrival of the CM, the hotel does not have a room for him, the hotel provides him with similar accommodation in a hotel which is within the same district of the city, pays for his transportation to the new hotel and pays for one Telephone Call anywhere in the world. The Assured Hotel Reservations is a privilege provided by select participating hotels under a specific American Express Marketing Program called the SHRPSelect Hotels Rate Program. All participating hotels are bound by the contract to provide these basic facilities to all Amex Card members. 2. Client Mail Amex CMs can use the Amex TSOs as their Post office. Literally. All CMs who do not have permanent addresses in the town they are in can use the Amex TSO as their address for contact. All mail for such CMs is kept at the TSO and the CMs can check with the card members Desk in person and collect their mail. In all such cases, where the mail is required to be forwarded to another Amex TSO address (and not any other address- esp. when the CM moves from one town to the other), Amex charges the Card members Account with 1 US dollar. All mail, which remains uncollected after a month of its arrival, is returned to sender. 3. Detailed billing statement (ICRS) Amex Card Statements are called the International Customer Relationship Statements (ICRS). The statements are detailed to the extent that all the

information pertaining to all charges incurred by the CM and those that have been posted into the Amex Systems, reflect on the statements. 4. Direct Debit (DD) Amex CMs enjoy the privilege of their Bank Accounts directly debited for all the charges they incur on their Card within any Billing Cycle. The CM signs a tri-partite contract with Amex and the Bank where he holds his Account. Amex sends the monthly statements of account to the Bank directly, under advice to the CM. The Bank sends the payments to Amex. The CM is thus, saved the bother to follow up on his statements and payments. 5. Emergency Card Replacement (ECR) Irrespective of where they lose their Card, Amex promises the lost Card replacement within 2 business days to the CMs. This is a major value addition to the privileges that we offer as we do not charge for a replacement Card and also not for the courier charges if we are to replace the Card at a remote location. 6. Emergency Cheque Cashing (ECC) Travelling CMs can avail of Emergency Cheque Cashing on the card. They need to produce the Card and also write a Personal Cheque in order to withdraw cash. The amount on the cheque is the face value of the Cash that they withdraw plus a transaction fees amount. The absence of a Personal Cheque can be compensated by a Counter Cheque that the CM Desk would have with them. A few points that have to be remembered during the ECC transaction are: The ECC is available only at the Card members Desk at the Amex TSOs. The amount that a CM can withdraw on his Card is determined and regulated by his/her card issuing market.

The transaction fees is usually 2.5% of the transaction amount but may vary from market to market. The personal cheque can be of any bank in the world. It is presented to the Cms Bank immediately on the same/ next work day. All bounced personal Cheques on the ECC facility are given prominence for collections and receivables. An authorization has to be taken from the nearest authorizations center for every ECC transaction. 7. Express Cash Express cash is another mode of availing cash on the card. Here the CM does not need to carry any personal cheque but can withdraw the needed cash from an ATM. Amex has more than 80,000 ATMs worldwide and we are in the process of launching more ATMs in India in the near future. Both currency and travelers cheque can be withdrawn from the ATMs. Currency could be the local currency or in major international currencies. Travelers cheques are in 12 international currencies and attract a 1% transaction fees. Overall, the ATM transaction attracts 2.5% transaction fees. 8. Express check-in, check-out facility By the virtue of being an Amex CM, all participating hotels in the SHRP Program provide all Amex CMs with an express check in and checkout facility. The CM just needs to present his/her Amex Card at the reception upon arrival and inform them over the phone at the Time of Departure and the Hotel takes care of the rest. This saves the CM a lot of valuable time. 9. Extended Payment Plan (epp) In the US and certain other markets, CMs are provided with a facility to pay their Travel and Airline charges at regular fixed intervals of time (with an amount of interest). This is essentially under the assumption that the Travel and Airline charges are of non- frequent category and the EPP aims to provide a

flexibility to repay these charges at intervals. However, the rest of the charges on the CMs statement need to be paid upon receipt of the statement. 10. Global Assist Global Assist is an International agency with its office in the US, which provides Legal and Medical assistance upon request. When CMs require any such assistance, they need to call Amex at the local market 24 hrs number. The Global Assist number is then provided to the CMs who get in touch with GA. GA then leads them to the nearest Doctor or Lawyer in the market, as they would have databases of such utilities. 11. Insurance Services Amex provides a variety of Insurance Services on all its products. By the virtue of being a CM, an individual is insured against Personal Accident. When Amex CMs buy Airline tickets on the card, they get additional Personal Accident Insurance. Travelers cheque purchases gets more insurance. When CMs travel, we also assist them with Medical Insurance Services. In all such cases of Accident, the CMs deal directly with the Insurance Agencies and not with Amex. 12. Moneygram Moneygram is almost a Brand Name. It allows Amex CMs to wire money from one TSO to the other anywhere in the world. The wiring of money hardly takes any time as the money moves within Amex. The receiver can collect the money at the receiving TSO within seconds of the money Transfer. In order to protect any money laundering attempts. Amex restricts the CMs from sending amounts greater than USD 1000 per transaction. 13 Signature on File Amex CMs can avail of Travel Services from the TSOs without actually going across to one. All they need to do is to give Amex a call. The Airline tickets and other Travel Documents are prepared and sent across tot he CM within the City/

Town limits, by courier. A nominal fee is charged to the CMs account each time any such service is availed. 14. Supplementary Card Membership All Amex Basic CMs (the primary Card Account Holders) can provide cards to their spouses, friends and relative sand near and dear ones. The policy on the scope of the supplementary card membership varies from market to market. A basic CM can give as many as 99 supplementary cards on his/ her account. However, the basic CM is responsible for all payments on the card account. 15. Transfer Out (Conversions) CMs moving from one market to the other Amex market can easily convert the currency of their card. This facilitates a smooth transfer of Debit/ Credit balances if any on the previous card account which are then converted and billed in the local currency in which the CM has now acquired the card. However, all such transfers of card currencies would be dependent on the local market card issuance policies. 16. World wide travel assistance Irrespective of which market issues the card, all Amex CMs worldwide are entitled to World class travel service facilities at over 1700 owned and representative offices of American Express TRS in more than 120 countries in the world. 17. Membership Rewards (MR) One of the most rewarding benefits of the Amex Card membership, the membership rewards is a program of Amex rewarding the CMs for spending on the card. Each US dollar (converted into the local currency) spent on the card and paid back, earns the CM, one MR point. These points can then be redeemed against a host of retail and leisure purchases from a list of such options that the card marketing team keep0s modifying with time.

18. Limited liability In an event of the loss of the card, Amex provides the CM the benefit of limited his/ her liability on the card. Before the report of the loss of the card, the CM is liable to an amount of INR 1000 (or other amounts, which are product specific). In case the card is misread after the report of loss of the card, the CM is not liable to pay anything. The limits differ on cards issued in various markets. AMERICAN EXPRESS CARD PRODUCTS IN INDIA The various card products that American Express issues in India are: INR personal card INR gold card INR corporate card Corporate purchasing card INR GRCC (Green and Gold) US dollar corporate card Co-branded cards (MTNL) Affinity cards.

CHARGED CARD
Global Validity Launch Date American Express Card Yes 1988 Rs. 1500 Rs. 3100 Rs.1500 Free Rs.400 No No limit (max 99) Rs.200,000 3.5% or Rs.100 whichever is higher American Express Green Yes 1993 Rs.12000 Rs.2100 Rs.950 Free Rs.400 No No limit (max 99) Rs. 100,000 3.5% or Rs. 100 whichever is higher

Fees IHR
Joining Basic Annual Basic Supplementary Annual MRNFTO MRFTO Annual Fee Waiver Maximum No. of supps Min. individual income Reqd. Delinquency charges

Direct debit/standing instant Lost card liability Dropbox locations in India 24 Hour customer service Commission free travel cheque Duplicate SOA YESOC Monthly CM Mag Newsletter Mail option hater Travel services No. of travel offices ATM network access Insurance Accidental death/disability Permanent disablement Home protection Purchase protection Baggage loss insurance Credit life insurance Emergency medical & Legal Asst. Replacement/Lost card facility Guaranteed Hotel reservations Express check in /out Hotel/travel discounts Airport/Business lounges Affinity or joint card Bed cheques Rewards programme Fee refund on product change

Yes Before reporting loss Rs.1000, after reporting loss-nil 228 across 8 cities Yes Yes Yes, free of charge Yes Yes Yes Yes Yes, through 28 owned TSOs and Rep offices in 24 cities Yes Air-4, MM, Non-air-300k Rs.100k Rs.100K Upto Rs.150 K for 90 days Upto Rs. 25000 Yes upto Rs.5000 Yes Yes,48 Hours Yes Yes Yes Yes No Rs. 150 Yes On a prorate basis

Yes Before reporting loss Rs.1000, after reporting loss-nil 228 across 8 cities Yes Yes Yes, free of charge Yes Yes Yes Yes Yes, through 28 owned TSOs and Rep offices in 24 cities Yes Air-4, MM, Non-air-300k Rs.100k Rs.100K Upto Rs.150 K for 90 days Upto Rs. 25000 Yes upto Rs.5000 Yes Yes,48 Hours Yes Yes Yes Yes No Rs. 150 Yes On a prorate basis

CREDIT PRODUCTS COMPARISON

Product VICES/REQUIREME NTS Cards NCH Date Annual (BASIC) Annual (Supplementary) Gold 200 2000 1000 Gold 1993 2000 1000 Gold 1992 1500 500 Green 1998 Classic 1991 750 350 Classic 1992 500 200 Gold GRCC Citibank Gold SCB Gold HSBC Gold Green GRCC Citibank classic HSBC classic

Product

G o ld GR C C

C itib an k G o ld

S CB G o ld

HS B C G o ld Max. o f 2 No

G r een GR C C

C itibank classi c Max o f 2

HS BC clas sic Max o f 2

Min imu m n o . of su p ps

Min imu m i n d i vi du al in c om e re q u i re d per ann u m

No l i m it avai l ab le to sp o us e an d de p en d e nt fam i l y m e mb e rs S al ari e d : Rs . 15 0 ,0 0 0 Se l f e m p lo ye d : Rs . 10 0 ,0 0 0

Maxi m u m o f 2

S al ari e d : Rs . 1 5 6 ,0 00 S e l f em p l o ye d : R s . 1 56 ,0 0 0

Rs 1 7 5 ,0 0

lim it availab le to sp o us e an d de p en d e nt fam ily m e mb e rs S alarie d : Larg e / MN C (<3 0 )72 K 30 - 35 - 96 K Ot h e rs 96 K+ Se lf e m p lo ye d : Pro f (<3 0 ) 7 2 K B iz S ve s 9 6 K

S alarie d : 72 ,0 0 0 S e lf em p lo yed : 96 ,0 0 0

Rs . 7 2 ,0 0 0

Mon t h l y i nt e res t rate

Ti e r1 Ti e r2 -2 9 0 In t ro B T- 1 .7 9 21 d ays Rs . 1 0 0 o r 3 .5 % wh i ch e ve r i s mo re

295 295 20 d ays 2 .95 5 o r R s . 1 00 in mo nt h o ne , 2 .9 5 % o r Rs . 1 5 0 i n mo nt h t wo

250 290 20 d ays

In te re st rate p aym en t IOD A ve rag e s

Ot h e rs 96 K Tie r1 2 7 9 Tie r2 2 9 0 In t ro B T 2 .79 21 d ays Rs . 1 0 0 o r 3 .5 % wh ich e ve r is m o re

295 295 20 d ays

27 5 27 5 2 0 d ays R s . 1 00

Monthly newsletter Travel service

Yes Yes

No. of offices

travel

Advances (INR)

Yes-thru owned 28 TSOs & Rep offices in 24 cities* 20% of LOC

Yes Yes-thru alliance with travel house in 10 cities Travel House locations 10 cities Rs. 10,000 in year one and 60% of LOC after year one 31 in 7 cities (for MasterCard it is 150 across 12 cities) Upto 2.5 times monthly salary Air : MM

Yes

Yes Yes

No

No

Sita travels in 22 cities and Thomas cook in 7 cities Upto 60% of LOC

Yes-thru owned 28 TSOs & Rep offices in 24 cities 10% of LOC

Travel House locations in 10 cities

Sita Travels locations in 22 cities

Network Access

35in 7 citires

31 in 7 cities

35 in 7 cities

Credit facility

Upto 2.5 times monthly salary

Upto 2.5 times monthly salary

Upto 2.5 times monthly salary Air : 0.6

Accidental liability

death/

Air: MM

Air : 1.0 MM

Air : 1.0 MM

Air : 0.5 MM

Non Air : 300K Permanent Disablement : 100K Purchase protection (INR) SERVICES/REQUIRE MENTS Credit life insurance (INR) (Waiver of o/s upon CM demise) Emergency legal and Medical assistance Replacement/Lost Card Facility Guaranteed Reservations Hotel No Upto Rs. For 90 days

Non Air: 200K Permanent Disablement: NIL

Non Air : 300K Permanent Disablement : NIL

Non Air : 200K Permanent Disablement : NIL

Non Air : 100K Permanent Disablement : NIL Upto Rs. 15,000 for 90 days

MM Non Air : 200K

Rs. 40,000 for 90 days

Upto Rs. 50, 00 for 180 days

Upto Rs. 50,000 for 90 days

Premium charged Rs. 250 for upto Rs. 50,000 No

Free upto Rs. 40000

No

Premium charged-Rs. 250 for upto Rs. 50,000 No

Free upto Rs. 20000 No

NA

Through VESP/Master Assist 48- 72 hours Rs. 100 Yes

NA

48 hours (2biz days) Yes (WHRP/SH RP) Yes (WHRP/SH RP) Yes (WHRP/SH RP)

48-72hours

48 hours (2 biz days) Yes (WHRP/SHRP) Yes (WHRP/SHRP) Yes (WHROP/SHRP)

48-72 hours

Yes through IBTC domestic Yes

Yes through IBTC domestic Yes

Yes

Express check in/out

Yes

No

Hotel/Travel Disc.

Yes through IBTC domestic

Yes through IBTC domestic

Airport lounges/business lounges SERVICES/REQUIRE MENTS Affinity cards or joint

7 in India

7 in India

12

7 in India

NA

NA

NA

NA

NA

Indian Oil Master Card, Philips Visa/Mastercard, Indian Airforce/Army, Womens Card (Visa) Rs.100/NFTO: Free FTO: NFTO Free FTO : Free 5% or Rs. 100/whichever is more

Shoppers Stop (Mastercard, Indian Airforce/Army , Womens Card (Visa)

Bad cheques (INR) Rewards Programme

Rs. 150/NA

Rs. 100/NFTO-Free FTO Free

Rs.150/Available only for fee redemption 5% or Rs. 100/whichever is more Before report loss: Unlimited After reporting loss : Nil

Available only for Free redemption 5% or Rs. 100/whichever is more Before report of loss: Unlimited

Min. repayment AMT

5% or Rs. 100/whichever is more Before report of loss: 1000 After reporting loss : Nil

5% or Rs. 100/whichever is more

5% or Rs. 100/whichever is more

Card liability

Before report of loss: Unlimited After reporting loss : 1000

Before report of loss: Unlimited After reporting loss : 1000

Before report of loss: Unlimited After reporting loss : 1000

American express in India and the Global market

American Express strategy for the Indian market was to build on the success of the charge card business and to offer a wider range of financial products and services developed by American Express and its alliances with leading players. AmEx had carefully shielded itself from the battle by nurturing a small niche at the top end of the market - the brand perception of their card was - a status symbol for a select few. But today, when the consumerist wave is hitting the country, and credit card usage is expanding in the burgeoning middle class, AmEx is quietly junking most of the essential of this niche strategy. Its distinctly upscale positioning is gradually being made more mass market. But to prevent the AmEx brand from being completely robbed of its exclusive status, it is slowing down the pace of change. More specifically the advertising today has shifted emphasis - AmEx is talking more about the tangible benefits that the card offers rather than the premium segment that it belongs to. Instead of the traditional policy of inviting select members to join up, it has appointed sales agents. In addition, it has launched its member-get-member scheme. American Express launched the American Express Credit Card in India in 1998, the first card product to be marketed by American Express here. With a monthly interest rate of 1.99 percent on revolving balances the lowest in India. The card also offers a balance transfer service with an interest rate of 1.45 percent. An innovative scheme offered by American Express, called Balance Transfer Service, helps the cardholder to pay off outstandings on other credit cards. Amex

will pay the card issuer and transfer the amount due to the Amex card. And for the first six months the Amex cardholder gets the benefit of a lower interest rate of 1.99% per month. For frequent users, Amex has a scheme for waiving the annual fees if the cardholder spends more than Rs. 45,000 in the preceding 12 months. Research has revealed that consumers today are more discerning than ever before about what they want from their credit cards. They are looking for real value and genuine savings. The American Express Credit Card not only offers great value, but also provides a wide range of privileges, services and rewards. At 1.45 percent for the first six months and 1.99 percent thereafter, the new cards interest rate was significantly lower than the 2.95 percent charged by most other credit card issuers. And the balance transfer feature was the first of its kind in India. Other card benefits included access to the award-winning Membership Rewards program, free travel insurance and related travel service benefits, Purchase Protection, limited loss liability, cash advances at ATMs, card acceptance at gas stations and, as always, 24-hour customer service. Its Indian operations have staged a turnaround during the year ended March 31, 2000, posting a net profit of Rs 27.7 crore, a three-fold rise over the previous years net profit of Rs 8.2 crore. The banks operating profit during the year stood at Rs 74.7 crore, a 25 per cent increase over the previous years corresponding figure of Rs 59.5 crore. Amexs total income during the year however dropped four per cent to Rs 445.1 crore from Rs 461 crore in 1998-99, largely on account of a 14 per cent drop in interest income to Rs 302.9 crore (Rs 345.3 crore). Non-interest income during this period rose 23 per cent to Rs 142.2 crore from Rs 115.8 crore the previous year. Interest expenses during the year fell by 30 per cent to Rs 196.4
51

crore from Rs 254.4 crore the previous year. The sharp fall in the banks interest expenses was mainly on account of the drop in its deposit base during the year. Operating expenses during the year were higher by 18 per cent at Rs 174 crore (Rs 147.1 crore) which included Rs 11.4 crore relating to the banks voluntary retirement and severance scheme announced in 1999. During the year ended March 31, 2000, Amex total deposits fell 22 per cent to Rs 1,418.3 crore from Rs 1,733.2 crore the previous year. Advances also fell eight per cent to Rs 8,919.4 crore from Rs 9,614.5 crore in 1998-99. American Express Banks net non-performing assets during the year increased to 4.32 per cent from 2.32 per cent the previous year. It is widely perceived that Citibank is the most established player in the credit card business in the country; so when a travel-related services company like American Express, which is only into charge cards in India till date, claims it is the largest card issuer in India today, it merits a second look. AmEx bases its claim on the fact that cardmember spending is a more realistic measure of the volume of business than the number of cards -- plastics -- issued. In other words, plastics cost money whereas increased spending by cardmembers gets you money. And that's also the basis of AmEx's claim of being the world's largest card issuer with billings of over USD 208 billion. Since AmEx introduced the rupee-billed Green Card in 1993 and the rupee- billed corporate card in 1996, its business in terms of billings has grown by 75 per cent against an industry average of over 40 per cent. What the company doesn't say so explicitly is that a) since AmEx cards are charge cards positioned as a lifestyle product and have a membership profile of frequent travelers and high spenders on
52

entertainment, the return from each card would be that much higher and b) since other cards available in the market are largely credit cards with a revolving credit facility targeted more at the middle class user, the returns would accrue on a longer term. Further, the fixed income from a card in terms of annual subscription fee is more than double for an AmEx personal card compared to that of a normal credit card. Its offerings already positioned as lifestyle products, AmEx has just introduced the Gold Card, clearly for the high-income spenders. There are other Gold cards in the market. Though AmEx pioneered the Gold Card concept globally, most other leading players in the card business in India already have their gold cards. But the difference is that brand AmEx in India already has a high-end premium image on account of its exclusive card operations instead of routing them through Visa or MasterCard, like other card issuers do. So penetration for a product that consolidates its premium image could be easier. Like other cards from AmEx, the Gold Card is again a charge card, with no pre-set spending limit and with world class services. One AmEx card that could possibly shed the premium image is the corporate card, which a client or company issues to its employees who travel extensively on business. The employees - from a sales executive to a senior manager - have to necessarily use the card because the company's travel and entertainment expenses are monitored through the spending on the card. Since its introduction in 1996, over 600 small and large business houses in India have gone in for the AmEx Corporate Card.

53

Tapping such potential like Am Ex does, means offering competitive, if not the best services. The marketing efforts of the company are two-pronged: ``First is to acquire the right customer and the second is to ensure customer loyalty.'' And this has to be practiced in a scenario where the market is getting increasingly segmented on price, usage purpose and the convenience platforms.

54

AMERICAN EXPRESS BANK Liabilities and assets (Amount in Rs. lakh) Figures in bracket indicate percent share in total Year 1. 2. Capital Reserves and Surplus 2.1. 2.2. 2.3. 2.4. 2.5. Deposits 3.1. Statutory Reserves Capital Reserves Share Premium Revenue and other Reserves Balance of Profit 1998 (5) 1568 (0.5) 42887 (13.3) 9221 797 741 32129 198111 (61.5) 30392 3206 27186 9874 157846 1653 156193 198111 60025 (18.6) 60025 4200 40000 15825 19644 (6.1) 1800 1417 8456 7971 322236 (100.0) 653 (0.2) 23522 (7.3) 460 1999 (6) 1568 (0.5) 23155 (7.1) 9384 1538 12233 173320 (52.9) 39387 4021 35366 11797 122135 507 121629 173320 107326 (32.8) 105612 20780 40568 44264 1714 22193 (6.8) 2094 1573 9646 8880 327562 (100.0) 847 (0.3) 15321 (4.7) 1967

3.

3.2. 3.3

3.A. 3.B 4. Borrowings 4.1.

Demand deposits (i) From banks (ii) From others Savings bank deposits Term deposits (i) From banks (ii) From others Deposits of branches in India Deposits of branches outside India

5.

Borrowings in India (i) From Reserve Bank of India (ii) From other banks (iii) From other institutions and agencies 4.2. Borrowings outside India Other liabilities 5.1. Bills payable 5.2. Inter-office adjustments 5.3. Interest accrued 5.4. Others (including provisions) Total Liabilities

1. 2. 3.

Cash in hand Balances with RBI Balances with banks in India

55

4. 5. 6.

Money at call and short notice Balances with banks outside India Investments 6.A. Investments in India (i) Government securities (ii)Other approved securities (iii) Shares (iv) Debentures and bonds (v) Subsidiaries and joint ventures (vi) Others Investments outside India (i) Government securities (ii) Subsidiaries and joint ventures (iii) Others

6.B.

7.

Advances

7.1. Bills purchased and discounted 7.2. Cash credits, overdrafts & loans 7.3. Term loans Priority sector advances included in 7. 8. Fixed Assets 8.1. 8.2. 8.3. Other Assets 9.1. 9.2. 9.3. 9.4. 9.5. Total Assets Premises Fixed assets under construction Other fixed assets

9.

Inter - office adjustments (net) Interest accrued Tax paid Stationery and stamps Others

(0.1) 57140 (17.7) 6431 (2.0) 98434 (30.5) 98434 67255 213 29013 1954 103041 (32.0) 8285 72216 22540 29184 6701 (2.1) 2582 4119 25855 (8.0) 3183 7905 14767 322236 (100.0)

(0.6) 48544 (14.8) 1459 (0.4) 130222 (39.8) 130222 72625 213 40157 17227 96145 (29.4) 14106 67154 14885 28681 7681 (2.3) 2545 5136 25376 (7.7) 2680 7806 14890 327562 (100.0)

Earnings and Expenses Year I. Interest Earned a) Interest/discount on advances/bills

1998 32660 14933

1999 34527 13636

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b) c) d) II.

Income on investments Interest on balances with RBI and other inter-bank funds Others

13357 3551 820 12586 6673 2001 (75) 3639 348 45246 22063 18115 3650 298 11923 4033 1094 261 766 837 2 21 54 1524 446 119 2767 4446 33986 6815 45246

15220 4309 1363 11578 7375 786 (72) 3460 29 46105 25440 17263 4709 3469 14799 5656 1243 378 1150 995 1 22 19 1795 556 140 2843 5049 40239 817 46105

Other income a) Commission, exchange and brokerage b) Net profit on sale of investments c) Net profit on revaluation of investments d) Net profit on sale of land, building & other assets e) Net profit on exchange transaction f) Miscellaneous income Total(I+II) Expenditure & Provisions III. Interest expended a) Interest on deposits b) Interest on RBI/inter-bank borrowings c) Others IV. Operating expenses a) Payments to and provisions for employees b) Rent, taxes and lighting c) Printing and stationery d) Advertisement and publicity e) Depreciation on bank's property f) Directors' fees, allowances and expenses g) Auditors' fees and expenses h) Law charges i) Postage, telegrams, telephones, etc. j) Repairs and maintenance k) Insurance l) Other expenditure Provisions and contingencies Total expenses@ Profit Total (III+IV+V+VI)

V.

VI.

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RESULTS OF THE SURVEY

Questionnaire

QUESTION 1:

WHICH AMERICAN EXPRESS CARD DO YOU OWN?

On being asked which American Express card the respondents owned, the reply was as follows:

58

INR personal card INR gold card INR corporate card Corporate purchasing card INR GRCC (Green & Gold) US Dollar Corporate card Affinity cards Co-branded cards (MTNL)

5 respondents 5 10 5 5 3 5 4

QUESTION 2: DO YOU OWN SOME OTHER BRAND CARDS ALSO? On being asked whether they owned any other brand cards apart from that of AmEx, the reply was:

59

YES NO

22 18

QUESTION 3: WHICH OTHER CARDS DO YOU OWN? Overall, these 100 respondents own 220 cards of other brands apart from those offered by American Express. Citibank HSBC Bank of Baroda Bank Of India Standard Chartered ANZ Grindlays Times card ICICI SBI EXPRESS CARD? 00 5 4 6 4 43 5 respondents 6 9

QUESTION 4: OVERALL, HOW SATISFIED ARE YOU WITH YOUR AMERICAN

Very satisfied

10respondents

60

Somewhat satisfied Neutral Somewhat dissatisfied Very dissatisfied

6 7 7 10

QUESTION 5:

OVERALL, HOW SATISFIED ARE YOU WITH AMERICAN

EXPRESS CUSTOMER SERVICE?

Very satisfied Somewhat satisfied Neutral Somewhat dissatisfied Very dissatisfied

20 respondents 5 7 8 00

QUESTION 6: HOW LIKELY WOULD YOU BE TO RECOMMEND AMERICAN EXPRESS CARDS TO OTHERS?

Very likely

15 respondents

61

Somewhat likely Not sure Somewhat unlikely Very unlikely

7 3 10 5

QUESTION 7: TO WHAT EXTENT DOES AMERICAN EXPRESS' CUSTOMER SERVICE EXCEED YOUR EXPECTATIONS? Very great extent Great extent Some extent Little extent Very little extent 00 RESPONDENTS 20 7 9 4

QUESTION 8: WHICH OF THE FOLLOWING STATEMENTS, ACCORDING TO YOU MOST REPRESENTATIVE OF AMERICAN EXPRESS.

A total of 145 statements were selected by the 100 respondents

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They are Helpful and Friendly. They are polite, cheerful and are knowledgeable operators In tune with the needs of its clients Prompt in dealing with customer complaints Unwilling to go the extra mile for its customers Poor customer phone support You are often put on hold for a long time

21 RESPONDENTS 5 3 2 5 1 3

QUESTION 9: HOW SATISFIED ARE YOU WITH THE EFFICIENCY OF CALL HANDLING WHEN PLACING CALLS TO AMERICAN EXPRESS?

Very satisfied Somewhat satisfied

15 RESPONDENTS 7

63

Neutral Somewhat dissatisfied Very dissatisfied 6

QUESTION 10: AMERICAN EXPRESS UNDERSTANDS MY SERVICE NEEDS. Strongly agree Agree Neutral/Not sure Disagree Strongly disagree. 00 00 RESPONDENTS 10 14 16

QUESTION 11: WHAT ARE THE ADDED BENEFITS YOU WISH TO ACQUIRE FROM THE CARD.

Acceptability Longer credit period

18 RESPONDENTS 2

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Higher credit limit Lesser charges Better offers

5 5 10

QUESTION 12: PLEASE RANK THE SERVICES OF THE FOLLOWING CARD ISSUERS IN ORDER OF YOUR PREFERENCE. (b) The respondents ranked the following brands as the most preferred: AmEx Citibank SBI HSBC 10 respondents 6 5 5

65

Standard Chartered ICICI

4 10

(b) The following respondents ranked these brands as second most preferred. AmEx Citibank HSBC SBI Standard Chartered 10 respondents 3 7 15 5

10. Observation and Findings

66

QUESTION 1: WHICH AMERICAN EXPRESS CARD DO YOU OWN?

AmEx Customers
16% 10% 15% 4% 16%

INR personal card INR gold card INR corporate card Corporate purchasing card INR GRCC (Green & Gold) US Dollar Corporate card Affinity cards

24% 5% 10%

As is visible, the sample includes American Express customers of all types. This research has not stressed on only one particular type of card like the credit card but even on charge cards. Through this research, customer feedback has been generated from all different types of AmEx cardmembers

QUESTION 2: DO YOU OWN SOME OTHER BRAND CARDS ALSO?

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CUSTOMERS WHO OWN OTHER BRANDS TOO

16% YES NO 84%

Of the 100 AmEx customers/respondents, 84% of them use other branded cards also. Only 16% of them use just AmEx cards. This trend keeps on increasing as newer entrants come into the market. This pie chart shows that only 16% of the respondents are hard core American Express loyalists. Rest of them opt for other brands also. This may be because of dissatisfaction with the service offerings or because of better service offerings by competitors.

QUESTION 3: WHICH OTHER CARDS DO YOU OWN

68

OTHER BRANDS OWNED

Citibank HSBC Bank of Baroda

20% 32% 5% 1% 7% 15% 14% 0% 6%

Bank Of India Standard Chartered ANZ Grindlays. Times card ICICI SBI

According to this survey, 32 % of the AmEx customers own Citibank cards also. 20% of them own SBI cards, 15% own Stanchart and !4 % own HSBC Cards. Other brand cards hold 21% share of this chunk. This gives a brief overview of the threat posed by other card issuers to AmEx cardmembers.

QUESTION 4: OVERALL, HOW SATISFIED ARE YOU WITH YOUR AMERICAN EXPRESS CARD?

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SATISFACTION WITH AMEX CARDS

Very satisfied 8% 0% 22% Somewhat satisfied Neutral Somewhat dissatisfied Very dissatisfied

17%

53%

This research shows that at least 75% of the AmEx cardmembers are satisfied with their cards. Only 8% of the respondents feel somewhat dissatisfied with their AmEx card, and 17% are neutral about their feelings. Although the customers are satisfied with the cards, what is important is the satisfaction with the customer service of AmEx as a whole.

QUESTION 5: OVERALL, HOW SATISFIED ARE YOU WITH AMERICAN EXPRESS CUSTOMER SERVICE?

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SATISFACTION WITH AMEX SERVICES

6% 0% 16% 30%

Very satisfied Somewhat satisfied Neutral Somewhat dissatisfied Very dissatisfied

48%

The data shows that 78% of the customers are satisfied with American Express service offerings. Out of these, 30 % are very satisfied and 48% are somewhat satisfied and only 6% are somewhat dissatisfied with the service offerings of AmEx. This shows high customer satisfaction levels as regards the

QUESTION 6: HOW LIKELY WOULD YOU BE TO RECOMMEND AMERICAN EXPRESS CARDS TO OTHERS?

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RECOMMENDATION
12% 3% 0% 28% Very likely Somewhat likely Not sure Somewhat unlikely Very unlikely

57%

On being asked whether they would recommend American Express cards to others, 57% of them said that they were somewhat likely to recommend to others. 28% said that they were very likely to recommend to others. While only 12% said that they were somewhat unlikely to recommend AmEx cards to others. This shows that at least 85% of the respondents were willing to recommend AmEx cards to others.

QUESTION 7: TO WHAT EXTENT DOES AMERICAN EXPRESS' CUSTOMER SERVICE EXCEED YOUR EXPECTATIONS?

72

EXPECTATIONS SURPASSED
0% 20% 0% 37% Very great extent Great extent Some extent Little extent Very little extent

43%

The data shows that 37% of the respondents felt that AmEx services surpassed their expectations to a great extent. 43% felt that the services surpassed expectations to some extent. And 20% felt that AmEx services surpassed their expectations to a little extent. This analysis shows that however AmEx service offerings surpassed the respondents expectations, yet it was on an average not to a very great extent. AmEx needs to improve its service offerings in such a way that it surpasses the customers expectations to a great extent.

QUESTION 8: WHICH OF THE FOLLOWING STATEMENTS, ACCORDING TO YOU MOST REPRESENTATIVE OF AMERICAN EXPRESS.

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REPRESENTATIVE STATEMENTS
7% 0% 13% 19% 19% 25% 17% Helpful Polite In tune Prompt Unwilling Poor support Put on hold

When asked to tick the statements that were most representative of AmEx, 175 felt that people at AmEx are Helpful and Friendly. 25% felt that people at AmEx are polite, cheerful and are knowledgeable operators. 19% felt that AmEx is in tune with the needs of its clients. Another 19% felt that AmEx is prompt in dealing with customer complaints. 19% felt that people at AmEx are unwilling to go the extra mile for its customers. Another 10% felt that they were often put on hold for a long time. AmEx needs to modify its service offerings in such a manner that the customers retain no negative feelings about their service offerings.

QUESTION 9: HOW SATISFIED ARE YOU WITH THE EFFICIENCY OF CALL HANDLING WHEN PLACING CALLS TO AMERICAN EXPRESS?

74

CALL HANDLING
Very satisfied 3%0% 27% 29% Somewhat satisfied Neutral Somewhat dissatisfied Very dissatisfied

41%

Overall, the satisfaction levels regarding the call handling services of American Express are high. 70% of the respondents were satisfied with the call handling services of AmEx. Out of these, 41% were somewhat satisfied, 29% were very satisfied, 27% were neutral and 3% were somewhat dissatisfied with the call handling services of AmEx. AmEx needs to convert the opinions of these 30% who were either neutral or dissatisfied, by improving their call handling services.

QUESTION 10: AMERICAN EXPRESS UNDERSTANDS MY SERVICE NEEDS.

75

SERVICE NEEDS UNDERSTOOD

5% 18%

0%

0%

Strongly agree Agree Neutral/Not sure Disagree

77%

Strongly disagree.

When asked whether AmEx understood their service needs, 77% of the respondents agreed, 18% disagreed and 5% disagreed with the statement. Even though more than 3/4 th of the respondents agree to the fact that AmEx has understood their service needs, yet there remain a good 23% of them who dont agree to the statement. AmEx will have to work harder towards getting all their respondents to agree to the fact that their service needs were understood.

QUESTION 11: WHAT ARE THE ADDED BENEFITS YOU WISH TO ACQUIRE FROM THE CARD.

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EXTRA BENEFITS

Acceptability 12% 13% 24% 44% Lesser charges Better offers Longer credit period Higher credit limit

7%

This question pertains generally to the AmEx credit card. 44% of the respondents want AmEx to provide them with a higher credit limit. 24% want a longer credit period. 13%want acceptability. 12% want AmEx to provide better offers and 7% want lesser charges to be applied to their cards.

QUESTION 12: PLEASE RANK THE SERVICES OF THE FOLLOWING CARD ISSUERS IN ORDER OF YOUR PREFERENCE.

77

FIRST RANK
30 25 PERCENT 15 AGE 10 5 StanChart Citibank AmEx HSBC ICICI SBI 0 20

This question aims at finding out the perception of AmEx cardmembers regarding their most preferred card. It is evident from this data that 30% of the respondents have ranked AmEx itself as their most preferred card. Close on the heels of AmEx are Citibank and SBI. AmEx needs to improve its service offerings in such a way that the majority of its customers perceive it as the best card issuer in the market.

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SECOND RANK
50 45 40 35 30 25 20 15 10 5 0
Am Ex C ha rt ba nk SB St an C H SB I

PERCENTAGE

Series1

Majority of the respondents i.e. more than 40% of them perceived American Express as the second most preferred card issuer. Another 29% of them perceived Citibank as the second most preferred card issuer in India. Considering both the charts, at least 70 % of the respondents perceived AmEx to be amongst the top two most preferred Card-issuers. This figure may sound good but the fact here is that all the respondents are AmEx users. And still for 70% of them it is not the most preferred card. This perception amongst the customers could prove to be dangerous for AmEx. AmEx will have to take some strong measures to reinforce its superiority in the minds of its customers.

i ti

79

DEMOGRAPHICS

AGE
ABOVE 50

40-50

30-40

20-30 0 10 20 30
20-30 30-40 40-50 50

40

50

39% of the respondents were between the age of 36% of them were between the age of 21% of them were between the age of Only 4% of them were above the age of

80

INCOME
Above 60,000

40,000-60,000

25,000-40,000

15,000-25,000 0 10 20 30 40 50 60

14% of the respondents had income between 21% of the respondents had income between 17% of the respondents had income between 04% of the respondents had income between

Rs.15,000-25,000 Rs. 25,000-40,000 Rs. 40,000-60,000 Above Rs.60,000

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CONCLUSION & RECOMMENDATIONS

Improve customer, client, or employee loyalty. React quickly to changes in the market. Identify and capitalize on opportunities. Beat the competition. Retain or gain market share. Increase revenue. Reduce costs. It takes a lot less money to increase your retention of current customers than to find new ones-but I know I don't give it as much effort as I should because it does take a lot of energy and effort! Customers like to interact with people who do more than process and handle transactions. They often require access to technical information and expect good interpersonal and communication skills. To accomplish these

82

objectives, companies need to share missions, visions and goals. They need to monitor changing customer expectations and modify the delivery of service and product quality to match these expectations on an ongoing basis.

STEPS NEEDED TO BE TAKEN BY AMERICAN EXPRESS IN ORDER TO STRENGTHEN ITS CUSTOMER SATISFACTION:

1. OFFER HELPFUL SUGGESTIONS. AmEx call handlers should offer helpful suggestions to their callers since it makes customers feel better informed. 2. COMMUNICATE REGULARLY. Staying in touch with customers lets them know you are thinking about them, not taking them for granted. AmEx should send helpful information and not just advertising material. Customers like to know what you are thinking, not just what you are selling. This will help in bringing the customers closer to their business. 3. GENERATE ENTHUSIASM IN THE EMPLOYEES. American Express should train its employees in the call centers in such a way that their interaction with the customers remains enthusiastic and the perception of unwillingness to help be removed. 4. RESPOND PROMPTLY. AmEx should try and reduce the time the customer is put on hold. A prompt response means someone cares and a delayed one tells the opposite story. 5. CREATE FUN AND EXCITEMENT. Dull drives customers away. The way to do more business is to make it fun. 6. MAKE INVOICES SIMPLE, CLEAR AND EASY TO READ. The invoice is a company's most important piece of paper--and the most neglected. Experts in communication should design invoices. When customers receive invoices, they should feel they received

83

more than their money's worth. Hint: The description of what is purchased should seem bigger than the price charged. Invoices should be customized to pass the communications test. 7. PERSONALIZE ALL COMMUNICATIONS. Everything received by a customer should be fully personalized. No "Dear Customer" letters. 8. AMEX EMPLOYEES SHOULD BE TRAINED TO BE PROACTIVE RATHER THAN REACTIVE. Don't wait for the customer to ask how to cut costs; take the initiative. Be perceived as pro-active by showing customers ways to save money. They'll be less likely to bolt to a competitor for a lower price because they'll know that you are looking out for them.

ANNEXURES

Dear Respondent, the objective of this study is to know your satisfaction level as regards the services of American Express services. Kindly fill the following questionnaire, as your results will help us serve you better.

84

1. Which American Express card do you own? INR personal card INR gold card INR corporate card Corporate purchasing card INR GRCC (Green & Gold) US Dollar Corporate card Affinity cards Co-branded cards (MTNL) 2. Do you own some other brand cards also? YES NO

3. Which other cards do you own? Citibank HSBC Bank of Baroda Bank Of India Standard Chartered ANZ Grindlays. Times card ICICI SBI 4. Overall, how satisfied are you with your American Express card? Very satisfied Somewhat satisfied Neutral Somewhat dissatisfied Very dissatisfied

85

5. Overall, how satisfied are you with American Express customer service? Very satisfied Somewhat satisfied Neutral Somewhat dissatisfied Very dissatisfied

6. How likely would you be to recommend American Express cards to others? Very likely Somewhat likely Not sure Somewhat unlikely Very unlikely

7. To what extent does American Express' customer service exceed your expectations? Very great extent Great extent Some extent Little extent Very little extent

8. Which of the following statements, according to you most representative of American Express. They are Helpful and Friendly. They are polite, cheerful and are knowledgeable operators In tune with the needs of its clients

86

Prompt in dealing with customer complaints Unwilling to go the extra mile for its customers Poor customer phone support You are often put on hold for a long time

9. How satisfied are you with the efficiency of call handling when placing calls to American Express? Very satisfied Somewhat satisfied Neutral Somewhat dissatisfied Very dissatisfied

10. American Express understands my service needs. Strongly agree Agree Neutral/Not sure Disagree Strongly disagree. 11. What are the added benefits you wish to acquire from the card. Acceptability Longer credit period Higher credit limit Lesser charges Better offers 12. Please rank the services of the following card issuers in order of your preference.

87

AmEx Citibank HSBC Bank of Baroda Bank Of India Standard Chartered ANZ Grindlays Times card ICICI SBI

Personal details: Age: Income: 15,000-25,000 40,000-60,000 25,000-40,000 Above 60,000

Thank you for taking the time to complete this survey

88

BIBLIOGRAPHY
1. Khurana R. & Ravichandran A.N. Strategic Marketing Management: Concepts and class (1995), Global Business Press, New Delhi. 2. Wearne. Neil Business Marketing,2001, Global Books D Subscription Services New Delhi. 3. Kotler, Browers and Makens, Marketing For Credit Card Banking, 1996, Prentice-Hall International, USA. 4. Kotler, Philip, Marketing, The millennium Editio, (10th edition) 1999, Prentice hall of India, New Delhi. 5. Bhasker, Vijay. Credit Holders in India, Economic Times, 20 August 2000.

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