Magazine article American Banker

Visa Says Data Show That Brand Promotion Efforts Are Paying Off

Magazine article American Banker

Visa Says Data Show That Brand Promotion Efforts Are Paying Off

Article excerpt

Visa U.S.A. is trumpeting market research that links its investments in brand promotion to growth in market share.

By showing the research to board members and news organizations, Visa is trying to refute comments made after the resignations from its board of two top Citigroup Inc. executives.

Citigroup co-chairman John Reed reportedly objected to Visa's hefty marketing budget, saying it was of marginal benefit to his company.

After Mr. Reed and consumer banking co-chief Robert Lipp quit the Visa board, Citigroup said it intended to issue more MasterCards. Robert B. Willumstad, head of global consumer lending, has joined the board of MasterCard International.

Apparently in accordance with Citigroup's desires, MasterCard is streamlining its organization and has put an executive in charge of managing the relationship with Citibank.

Michael A. Beindorff, executive vice president of marketing and product management at Visa U.S.A., said the developments have led Visa to perceive "two diverging business models emerging in the card market: the efficient processor versus the strong brand model."

He said Visa exemplifies the second category. "We think that model is stronger than it has ever been," Mr. Beindorff said in an interview.

He said Mr. Reed and MasterCard prefer an "efficient network transaction processing model." Mr. Beindorff said Visa, as a "brand builder," does not view that as the better approach.

Visa executives have been putting out a message that their strategy enjoys strong support from other large member banks. …

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