FedEx Express Marketing Strategy

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For all businesses, whether a small start-up or a multinational giant, an effective marketing strategy provides a critical blueprint for the entire organization. Through the development and establishment of a coherent marketing strategy, Isoraite (114) notes that a firm can promote its businesses, court the right sort of clients and aptly allot resources. All these can be achieved while the firm’s reputation is safeguarded. As such, an effective marketing program encompasses various facets that should be considered by all organizations. Importantly, the shareholders’ value, reputational risk as well as the impact of technology are the most significant considerations in the marketing of a company’s products and services. In this regard, it means that an effective and comprehensive marketing strategy ought to be employed by organizations irrespective of their sizes or industry off operation (Ferrell and Hartline, 179). Besides, consumer considerations must be considered while marketing the products and services to the target audience. No organization in the logistics and services company understands the importance of effective marketing better than FedEx. The FedEx brand is one of the most renowned and respected brands globally, thanks to its successful marketing over the years. Notably, the management of the brand as well as the discovery and retention of the firm’s valued customers has been the focus of the logistics firm in over three decades. This paper presents a comprehensive analysis of FedEx’s Express marketing strategies, identifies the firm’s strengths and weaknesses evaluates its marketing environment, and provides recommendations on how the company’s business marketing can be improved.

Company Overview

FedEx Corporation is a US-based firm that is a widely acclaimed corporate giant in the logistics and transportation sector. The corporation is the conglomerate of several subsidiary firms such as FedEx Ground, FedEx Express, FedEx Office, FedEx Freight, FedEx Trade Networks, FedEx Custom Critical and FedEx Services (Fedex.com). All these subsidiaries operate under the FedEx brand name across the world. This also means that FedEx Express among other subsidiaries is independently operated but managed collaboratively. By operating individually, each company can solely focus on the delivery of top-notch services for its specific market. The company was founded in the 1970s with its core competencies anchored on package routing, delivery as well as the employee relations. Its broad portfolio of products and services encompass the e-commerce, transportation and the business services. Notably, the company’s widely renowned as the world’s most trusted and admired employers. The company notes that it seeks to inspire it's more than 425,000 staff to continue to, “be absolutely and positively focused on safety, the highest ethical and professional standards, and the needs of their customers and communities” (Kotler, and Pfoertsch 211).

Fed Ex Express is the corporation’s main operating subsidiary that delivers to more than 220 countries and regions worldwide as of the end of 2016. This has been made possible to substantial investment in the transportation and delivery business. The firm uses more than 640 aircraft and 47,000 motorized vehicles and trailers (Stauble, 349). Mainly, the company provides the delivery of packages in the United States over the night. Nonetheless, the FedEx Express also offers same-day delivery services for urgent shipments which cost up to 150 pounds to any destination within the United States. Moreover, the company provides the consumers with a predictable flat rate delivery option where charges are computed based on the service selection, packaging type and the destination of the package.

Overall Marketing Strategy

According to Isoraite (114), a marketing strategy is one of the functional strategies that collectively make up a company’s business strategy. For companies to be successful in today’s market economy, it is vital to continuously analyze the internal and external environment, explore competitor’s actions and to investigate consumer needs and trends. Importantly, these aspects vary and dynamically change which means there must be a continuous scrutiny in order to anticipate threats for the firm to protect itself and opportunities to take advantage of. Besides, this will ensure that FedEx Express averts undesirable events inhibiting its success and attains its set objectives and goals.

FedEx Express SWOT Analysis

Strengths

One of the strengths of the logistics company lies in its vast network of transportation of goods globally in over 220 countries. The global presence provides the company with increased visibility through various consumer touch points. On the same note, the global presence has seen the company employ more than 290,000 staffs. The number of employees has seen the company recognized as the world’s most trusted and admired company (Birla, 39). This is a strength that incredibly enhances the reputation of the firm and helps to motivate the employees working for the company. Besides, the reputation has enabled FedEx Express to attract and retain professional and skilled workforces that have successfully executed the firm’s business activities over the years.

It is also important to note that the company has operated long enough to gain a better understanding of the logistics market. Having operated for more than 30 years means enough experience has been gained to maneuver around today’s highly turbulent challenges. Correspondingly, the many years of operations have enabled the firm to maintain a solid foothold in the market. As such, this has enabled the company to steadily generate billions of annual profits from its businesses. Furthermore, the adoption of the latest technology acts to the advantage of the company. The latest IT systems enable the tracking of packages during shipping, which helps to recover lost consignments in the event they get lost. The incorporation of the latest information systems network has also helped the company to execute its business activities effectively.

Weaknesses

Whereas FedEx Express considers itself as a multinational company, it heavily relies on its US market. This is a major weakness especially for a company that has a global presence in more than 220 countries. The top management’s focus on the US market constraints the company’s successful generation of profits from other regions. Based on the recent performance of the company, FedEx Express appears to be suffocating from the lack of novel ideas, knowledge, and information. Generally, there seems to be a deficiency of new information which leads to the loss of customers. Lastly, the extensive market of the firm will possibly lead to a decline in the company’s market shares.

Opportunities

There are various opportunities that can be beneficial to FedEx Express if considered and appropriately implemented. The logistics firm needs to partner with other companies by considering merging and acquisition of other businesses. The cooperative strategy will ensure the business activities of the company by reaching out to a wider client base. FedEx Express should also focus on the emerging economies. The developing markets provide ideal working positions. As such, the company can grab a significant market share from one region to another and successfully challenge its competitors. It is worth noting that the network system of its competitors is not only weak but vulnerable. As such, the company should take advantage and provide the latest technology that provides its customers with the best delivery services. Furthermore, FedEx Express should concentrate on its strategic growth and employ cost-cutting initiatives to attract customers and improve its business.

Threats

There is no company that operates devoid of feasible threats from the external environment. Since the company’s core business involves the transportation of packages, the increase in fuel prices can be an impediment to the pace of the courier business. The company largely delves with the delivery of products at the customers’ desired destination. Thus, increased fuel prices will consequently affect the cost of doing business and eventually the delivery charges. The other threat involves the vulnerability of the company’s supply networks. A weak logistics network is likely to pave way for the entry of market competitors into the industry. The competitors can introduce novel products and services thereby creating problems for FedEx Express. The regulations of the national labor relations also possess a significant threat to the company. While it can affect the pace of the business, it is likely to hinder the successful implementation of the company’s strategic plans.

Market Segmentation, Target Audience, and Product Differentiation

Market Segmentation

Market segmentation provides the division of the market into homogenous groups that respond varyingly to communications, promotions and other marketing variables. According to Weinstein (4), segmentation marketing means “knowing your customers, giving them exactly what they want or may want, building strong relationships with channel affiliates and co-marketing partners, and communicating via highly targeted promotional media.” A good market segmentation enables the company to provide customers with the products that best fit their needs and simplifies the search process. FedEx Express provides an outstanding customer experience and understanding of each customer segment.

FedEx provides four major divisions of its services which includes freight, package, expedited and office service. Within the different services, individual and business users are identified. Even so, the segments further divide the customers into sub-categories and treat them based on their value and needs. Moreover, for each service category, the customer selects from an assortment of service segments. FedEx also provides for segmentation through self-selection. The customer segmentation is facilitated by the company website where customers fall into various categories by the selection of the different products and services offered.

Market Target

While FedEx Express mainly works in the corporate and business sector, the company also delves into the domestic customers. These are individual customers who sent their packages and parcels within and outside the country. Besides, the other target audience for FedEx Express includes government institutions, embassies, small businesses, and professionals (Lamb, Hair, and McDaniel 52). It is very important for FedEx Express to understand the requirements of its target audience and meet the demand effectively. It should be noted that the corporate sector is more active and vibrant. As such, the company should continue to satisfy the needs of its audience and find novel ways to expand its market target.

Product Differentiation and Positioning

FedEx Express has introduced an assortment of products in the market. Importantly, the company has a good market position owing to the company’s reputation as a reliable courier worldwide. The different products provide the customers with a variety to choose from depending on their needs and preferences. As such, clients can use the services at their own convenience in sending their packages to their intended destinations. Besides, the company provides urgent shipment of packages within the 24 hours meaning that all the needs or requirements of the customers are well considered. Overall, FedEx Express is the world’s leading logistics and package delivery firm in comparison to other players in the industry.

Marketing Mix

A marketing program entails a thoughtfully designed and coordinated set of activities that enable the company to realize its marketing objectives. These aims are strategic sales targets that fit the strengths of the company and provides a basic way of stretching the business in its present situation (Baker 16). The Marketing mix of FedEx Express examines the brand in entirety by covering the 4-Ps which are a product, price, place, and promotion. While the marketing mix helps to explain the FedEx’s marketing strategy, it exposes the company’s shortcomings with regard to its pricing, advertising, and distribution strategies. As such, it will form the basis upon which the recommendations shall be based.

Product. FedEx Express offers a variety of services worldwide. All the company’s services offered by the Express segment forms the product strategy in the marketing mix. The services encompass transporting, tracking and handling of consignments such as Envelope, Package, Freight shipments, Extra Care Handling and Ocean/Air Freight Forwarding. In every service category, the company provides various offerings to the customers. Notably, the company has a significant market share and a good growth rate. The diversity of the products and services helps the customers to use the courier services at their own convenience.

Price. Previously, FedEx Express charged for its services by simply measuring the weight of the package. However, while some consignments were light in terms of weight, they occupied a lot of space during transportation. Consequently, additional costs were incurred while the margin for such products was very low. In this regard, FedEx Express revised its strategy to dimensional weight pricing of every ground consignment. This means charges are based on length, breadth, and depth of the consignment as an alternative of the measure of weight. This has helped the company to substantially increase its revenues and margins and also recover its operating costs.

Place. The company has outlets that are spread across every part of the world. This enables customers to present their parcels to be shipped in person. Furthermore, FedEx Express has an online platform where customers can create their accounts and use it to track and schedule a pickup. The company’s staff can then reach out to the designated place at the slated time for a pick-up of the package. Notably, the logistics and delivery firm also offers daily pick-ups as well as cancellations. The best things that amuse consumers is that they are able to track and manage their shipments online. As such, they are informed where and when their shipment has reached.

Promotion. FedEx Express has adopted a fair promotion policy concerning the advertisement of its products and services. As such, the firm provides its customers with a variety of incentives to not only attract but also retain them. The use of creative advertising campaigns by the company such as the John Moschitta ad. Moreover, the company also indulges in the sponsorships of sports events which are devoted to the attainment of distinction. Previously, FedEx has been the endorsed transporter of the ATP World Tours and the UEFA Europa League. The firm also considers a philanthropic policy in its promotional activities. on the other hand, the company has platforms such as the YouTube channel and social media presence where it advertises for its products and services. Overall, various digital marketing promotions are applied by the company.

Marketing Environment Analysis

In designing a marketing program, it is important to consider the company’s marketing environment. This concerns the scanning of the influences or the variables both internally and externally (Pride and Ferrell 38). It is worth noting that an assortment of the environmental forces affects FedEx Express’s marketing strategies in entirety. While some of these forces are unmanageable, others are governable. Therefore, it is the responsibility of the management to modify the company’s policies to commensurate with the changing environment. The PESTEL analysis is used as a strategic instrument to analyze the macro environment of the company. The consideration comes with the understanding that macro-environmental factors can have a profound impact not only on FedEx Express as a company but also the entire conglomerate as a multinational firm. Besides, these factors can positively impact on Porter’s Five Forces in shaping the company’s marketing strategy and the competitive landscape.

Political factors. The political factors can have a profound impact on the company’s long-term profitability. Majorly, FedEx Express transports consignment both through the air and by sea. As such, various political rules, as well as regulations, must be followed. To accomplish success in the dynamic air delivery and freight services industry, the company should diversify the systematic risks of the political environment. Therefore, FedEx Express should consider political dynamics such as political stability, the risk of military invasion, intellectual property protection and trade regulations before investing in a particular market.

Economic factors. The company greatly contributes to an economy’s growth. This is because its success leads to high taxes which subsequently increases the GDP of the economy. However, the change of the price of the dollar affects the company and the ripples spill over to the economy at large. Further, aspects such as the interest rate, inflation rate and the economic cycle define the summative demand and speculation in the economy. Therefore, FedEx Express should consider investigating the type of the economic system in a region before committing its investments. Besides, dynamics such as the exchange rates and currency stability, financial markets efficiency and the economic growth rate should be considered before venturing into a new market.

Social factors. The social aspect of the company encompasses ensuring the delivery of the consignment is time-specific and the packages reach their destination devoid of any damage. The society’s culture plays a critical part in the performance of the organization. As such, marketers at the firm should recognize the consumers of a particular market and design apt marketing messages for the air delivery and freight services industry consumers.

Technological factors. Broadly, technology is known to be disruptive across the board in many industries. FedEx’s has recently integrated a technological concept that helps to track the couriers and appropriately updates the system. The increasing trend of online shopping has improved home deliveries thereby improving the economy. Advancement of technology has simplified the way customers keep track of their packages and their interaction with the company. FedEx Express should take not of the technological impact on the product offering, as well the innovations adopted by the company’s competitors.

Environmental factors. Different environments have diverse norms as well as environmental standards which can immensely affect the profitability of an entity. For FedEx Express, the major environmental impact emanates from the climatic change which affects air transportation causing shipment delays. However, the company has developed various approaches to sustain the environment and provide solutions to decrease the impact on the firm’s operations. As such, FedEx Express should consider factors such as the climate change and regulations concerning environmental pollution.

Legal factors. In many countries where FedEx Express operates, there are various legal frameworks as well as institutions that regulate the transportation industry. The company has strictly abided by such laws and regulations. The fact that the organization avails information regarding security online and is answerable in case of lawsuits confirms the company’s commitment towards the course. Nonetheless, the company still needs to consider factors such as the employment law, data protection, consumer protection and e-commerce regulations in all the countries where it has operations.

Recommendations

The global shipment and transportation industry has in a long time been considered as a leading indicator of where the global economy is headed. Based on the analysis of the company, it can be concluded that FedEx has thus far done a commendable job in seeking to strategically position the company in the market globally. Besides, the company should be commended for taking a full advantage of the recovery of favorable environmental factors to enhance its growth in foreign markets. However, there are several areas where the company can benefit by implementing strategic changes. The recommendations are based on the key observations which are the industry performance in the courier and delivery market and the implementation of the marketing techniques.

First, FedEx should understand that its focus on the global market should not overshadow its local presence. As such, the company should embrace market-specific plans as well as initiatives that are complementary. It should be noted that the global market typically sets the framework and parameters upon which the local market operates. The company should empower its in-market teams to freely control the success levers at the local level. Some of the marketing areas that lend themselves to the global level encompass the brand guidelines, branding, and strategic marketing planning. Even so, the areas that can be best managed locally entails the local social media channels, tactical campaigns, local partnerships and PR initiatives. Implementing these approaches will ensure that FedEx Express has a greater access to the local channels which will ultimately contribute to the overall success of the company.

Considering the marketing strategy employed by FedEx Express, the company should significantly expand its public relations strategy. The public relations is one of the cornerstones of the overall marketing strategy. In this regard, a well-thought-out public relations campaign will be more effective for the company compared to its usual advertising. Besides, a good public relation effectively reaches the target audience through the use of a credible message. The PR strategy should include the development of a comprehensive website pressroom, regular press contact and relationships and the development of a hard copy press kit.

Similarly, the company should consider developing and distributing branded collateral items. These include visitor’s guides, rack cards, brochures, and posters. The move will reinforce the company’s brand and provide the consumers with accurate package shipment information. Notably, the branded materials should serve as a complement to the information provided by the company online. Moreover, it is advisable for the company to develop and sustain a tracking and evaluation system for its marketing undertakings. it is vital to measure every marketing activity to facilitate the making of informed decisions for the future marketing strategies.

Conclusion

FedEx Express is one of the largest business segment of FedEx Corporation. As discussed above, one of its main functions encompasses the driving of sales through providing international time guaranteed delivery. However, while the company has several strengths and weaknesses within the company there are opportunities and threats emanating from the external environment. Even so, every business has a business environment with which it operates. FedEx is part of a logistics industry which means that the implementation of an effective marketing strategy requires a deep analysis of the different dynamics. It is through the evaluation of the market environment that appropriate actions have been developed to address the noted shortcomings.

Works Cited

Baker, Michael J. Marketing strategy and management. Palgrave Macmillan, 2014.

Birla, Madan. FedEx Delivers: How the World's Leading Shipping Company Keeps Innovating and Outperforming the Competition. John Wiley & Sons, 2012.

"FedEx - FedEx - Overview Of Services". Investors.Fedex.Com, 2018, http://investors.fedex.com/company-overview/overview-of-services/default.aspx. Accessed 13 May 2018.

Ferrell, Odies C., and Michael Hartline. Marketing strategy, text, and cases. Nelson Education, 2012.

Isoraite, M. "Theoretical aspects of marketing strategy." Ekonomika ir vadyba: aktualijos ir perspektyvos 1.14 (2009): 114-125.

Kerin, Roger A. et al. Marketing. 12th ed., 2014.

Kotler, Philip, and Waldemar Pfoertsch. B2B brand management. Springer Science & Business Media, 2006.

Lamb, Charles W., Joe F. Hair, and Carl McDaniel. Essentials of marketing. Cengage Learning, 2011.

Pride, William, and Odies Collins Ferrell. Marketing. Cengage Learning, 2004.

Stauble, Vernon R. Marketing strategy: a global perspective. Holt Rinehart & Winston, 2000.

Weinstein, Art. Handbook of market segmentation: Strategic targeting for business and technology firms. Routledge, 2013.

September 11, 2023
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