Marketing Plan on "Fedex Marketing Plan"

Marketing Plan 12 pages (3816 words) Sources: 10

[EXCERPT] . . . .

marketing strategy of FedEx, examining services offered, place held in the market and its competitive advantages and disadvantages in the shipping industry. Beginning with the issues analysis, competitive strategies, product positioning, pricing, promotions, and overall marketing efforts will be suggested. Though the market leader in the overnight (express) delivery segment FedEx should not rest on its laurels and should continue to target businesses who are currently using them to ship urgent freight, thus increasing its market share in that segment. Additionally, in order to create more convenience for the general consumer FedEx should consider creating a relationship with another corporation in order to set up drop centers or shipping services in their stores and implement an appropriate media plan to target customers.

Overall strategy

With the founding of Federal Express in 1971 the modern air/ground express shipping industry was born. In time the company became known as FDX Corporation and in January 2000 renamed FedEx Corporation. "Today, FedEx Corporation and its companies function under the motto of "operate independently, compete collectively and manage collaboratively." By operating independently, each company can focus exclusively on delivering the best service for its specific market. Competing collectively under the trusted FedEx banner ensures that all of the companies benefit from one of the world's most recognized brands" (FedEx, 2010).

Conventional wisdom suggests that marketing is an essential component to any successful business. Marketing is the present act of displaying an organization's identity and delivering its added value. Aside from producing a quality product that is useful to consumers, marketing's influence on consumer perception is perhaps the single most powerful tool defining a new entrant's success within an established market. Who are FedEx's consumers? What subcultures do they belong to? What do they value? What do they expect from a shipping company? What essential functions of the service make everyday life easier? It is a marketer's job to understand not only the basic demographic characteristics of their prospects, but to understand why they choose to use a shipping service in the first place. This type of far-reaching knowledge is a critical component that sets apart a marketing campaign's overwhelming success with its catastrophic failure. Marketers want to see the big picture. More importantly, they like to begin with end in mind. The phases completed in this project are vital to any good marketing plan because many times, with a complete vision of every facet of a market, steps can be taken to save time, money, and make a greater impact on target consumers.

Michael Porter has proposed three generic marketing strategies that may guide FedEx in meeting their goal; (1) overall cost leadership, (2) differentiation, and (3) focus. Overall leadership is defined as a firm working hard to achieve the lowest production and distribution costs so they can price lower than their competitors and win a large market share (Porter, 2008). Differentiation concentrates on uniquely achieving superior performance with a customer benefit area valued by a large part of the market (Porter, 2008). Using a focus type strategy would focus on one or more narrow market segments intimately and pursues either cost leadership or differentiation.

According to Porter, a company can identify its own strengths and weaknesses in relation to its industry by analyzing the forces that affect competition in the industry and their underlying causes (a to Z, 2005 p.272). Pretorius (2008) states a firm can get stuck in the middle and must make a fundamental strategic decision. Either it must take the steps necessary to achieve cost leadership or at least cost parity, which usually involves aggressive investments to modernize and maybe the necessity to buy market share, or it must orient itself to a particular target (focus) or achieve some uniqueness (p.26). The last two strategies may involve decreasing market share or sales. Porter goes on to point out that a cost leader cannot afford to ignore the principles of differentiation. If buyers do not regard the product comparable or acceptable, the cost leader will be forced to discount prices to undercut his competitors, thereby losing his cost advantage. To achieve cost leadership, a company must keep its cost lower than its competitors' (a to Z, 2005 p.272). To achieve differentiation, it must be able to offer something that is perceived as unique of its kind. By focus, Porter means that a company concentrates its efforts on a specific group or a specific geographical market. Low-cost production involves much more than just moving down the experience curve. A low-cost producer must find and exploit every opportunity to gain a cost advantage.

A company that goes in for differentiation must seek ways to achieve cost-effectiveness, because otherwise it risks losing its competitive edge through a disadvantageous cost position. The difference between cost leadership and differentiation is that the former can only be achieved in one way and that is through an advantageous cost structure, whereas differentiation can be achieved in many other ways (p.275).

Focusing consists of choosing a segment within an industry and adapting strategy to serve a segment more efficiently than its competitors. By optimizing the strategy for selected target groups, the focuser tries to achieve a competitive edge in respect of the selected group (p.273). There are two kinds of focus strategy. With the cost focus approach, a company tries to gain a cost advantage in its chosen segment. On the other hand, the differentiation tries to set itself apart from other companies in its industry.

The differentiation strategy along with focus would provide them with the guidance they would need to compete aggressively. Differentiation would involve FedEx offering products or services different from and more attractive than those of their competitors. This would involve the features of the service and value while supporting the brand name that customer's value. This would include quality research, development and product innovation.

Company Overview

FedEx holds first place in the express package transportation segment, making deliveries of more than 3 million packages per day. FedEx has several divisions handling different package sizes and types, with FedEx Ground taking care of small packages in North America, FedEx Freight handling smaller than truckload units, and FedEx Kinko's servicing retail office stationery and document services. When FedEx acquired Kinko's in 2004 it gave the company over 1,000 additional retail outlets.

FedEx Express, perhaps the key operating subsidiary, delivers to over 210 countries and territories around the world, using 640 aircraft and some 47,000 motorized vehicles and trailers. FedEx has a solid foundation in Europe as well, operating main hubs in Paris and London (2010, Company Profiles).

Environmental Analysis

Ground shipping, consisting of non-express packages, is a $20 billion market in the United States. Primary customers consist of business-to-business (B2B) customers, shipping packages that must be delivered but are not considered urgent. Of those customers the majority are manufacturers shipping directly to retailers. Next in line are business-to-consumer companies who indeed sell their products directly to consumers.

FedEx Corporation is a global network of companies that provide customers and businesses the broadest array of supply-chain, transportation, business, and related information services. With annual revenues that exceed $39 billion, the corporation has more than 290,000 employees and contractors operating in more than 220 countries and territories worldwide. FedEx Ground is the corporation's $6 billion small-package ground shipping subsidiary, specializing in dependable business-to-business delivery and convenient residential service through FedEx Home Delivery and FedEx SmartPost. FedEx Ground's workforce of more than 70,000 employees and independent contractors handles more than 3.5 million packages each day in the United States, Canada, and Puerto Rico (D'Alesandro & Crandell, 2009).

As society and the pace of life increased a need developed to increase the timetable of package delivery and Federal Express was born. Although the industry leader FedEx still must adapt and change when environmental factors demand so, such as a changing workforce, technology advancements, and increased globalization. In response, in 2006 FedEx Ground embarked on a multiyear initiative that has reshaped a series of succession planning activities into a disciplined, comprehensive, and integrated process tightly linked to its business strategy (D'Alesandro & Crandell, 2009).

The Marketing Environment

The marketing plan cannot be evaluated in isolation, but rather as a means to support your overall business strategy. Many of the decisions you make and the evaluation process itself will be determined by the type of business, stage of maturity and what you want to accomplish (Firth, 2010).

Competitive Forces

In an effort to remain competitive with United Parcel Service (UPS) FedEx began making aggressive moves to cut rising fuel costs. Having previously made the more obvious moves of cutting new hires and rolling out more fuel-efficient hybrid trucks, UPS and FedEx have decided it is time to get unconventional. FedEx developed new software to streamline the takeoff and landing schedules of its larger airplanes and reduce idling time. Newly equipped forklifts can weigh freight instead of hauling goods to scales (Boyle, 2008).

Economic Forces

FedEx plans to close 100 facilities, effectively laying-off 1,700 full-time employees by Jan 2011 with the combining… READ MORE

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