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FEDEX Marketing Mix

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7 P’s in the Marketing Mix of FEDEX

#Introduction:

FedEx is an international brand of courier and shipping services. It is a global brand that consumers trust. Its services are available across 220 countries. The brand has managed a global presence with the help of a strong air and ground network. It has a strong fleet that includes 670 aircraft and more than 180,000 motor vehicles.  FedEx has shown strong financial performance during the past few years. This has happened because of regular investment in technology and other critical resources over the past several years. FedEx has found strong growth in recent years but still, its path is full of challenges. However, it has maintained some critical strengths, one of which is an extensive distribution network that has enabled efficient delivery. The focus of FEDEX has remained on winning consumers’ trust. It has built a strong brand image and is investing in fuel-efficient aircraft to bring down operational costs.  Read more about FedEx in this marketing mix. It provides you a detailed analysis of the seven P’s in the service marketing mix of FEDEX.

#Product/Service:

FedEx is a global firm that deals in courier and shipping services. It offers a diverse range of services that suits various categories of customers including individuals, small businesses, large businesses, and government firms. It has emerged as a supply chain partner for large firms dealing with logistics problems. It was also the reason for the foundation of the brand. The brand was founded by a Yale University undergraduate named Frederick W Smith. It began operations officially in 1973 with a small team of 389 people. The firm took some time to establish itself but had found a firm footing by the year 1980. In its history, the company has made several acquisitions. TNT Express, one of the world’s largest express delivery companies, is among the latest acquisitions by FEDEX. By the 2000s, it had grown into a truly global brand. It has brought a large and varied portfolio of services that cater to diverse customer segments. Some of the main categories of shipping include:-

  • US package shipping:- Same day, Next business day delivery, 3 business day delivery, Ground business & Residential delivery.
  • International package shipping:- Fastest possible delivery, 1,2 and 3 days business delivery, flat rate business shipping.
  • US freight shipping:- Urgent delivery, 1,2,3 Business days delivery, Less than Truckload (LTL) delivery, specialty shipments.
  • International freight shipping: – 1 to 5 business days delivery, reliable air cargo services, air and ocean freight forwarding & distribution services.

Apart from the above mentioned, FEDEX has also brought supply chain solutions matching the needs of businesses of various sizes. It provides a comprehensive range of warehousing, fulfillment and returns solutions for rapidly growing businesses.  FedEx has also brought 3PL solutions for businesses of all sizes.

#Place: 

FedEx is a truly global brand. It started as a small team of 389 people with few resources in 1973 but grew into a world-class global shipping solutions provider by 2000. Today, it is among the leading courier brand with world-class infrastructure. It provides services in more than 220 countries and territories. Now, FedEx Express has the world’s largest all-cargo air fleet, which includes Boeing 777s, 767s, 757s, and MD-11s and Airbus A-300s and A-310s. Its headquarters are at Memphis, Tennessee.  The United States is the main market of FEDEX Express which accounts for around two-thirds of the total revenue of the brand.  However, other advanced markets of the world are also important for FEDEX. It has an unreplicable global network which includes the world’s largest airline and connects the world’s GDP in 1-2 business days. This network has more than 5000 hubs and facilities and its more than 180,000 motor vehicles pick and drop off more than 14 million shipments per day. FedEx ground network has more than 130 automated facilities. FedEx has continued to grow its retail network for consumer’s convenience. Consumers can ship and have shipments held for pickup with higher convenience now. The U.S. based customers can pick up their packages at any of 11,000 convenient, secure locations, including more than 8,000 at well-known retailers such as Walgreens. Moreover, FedEx is placing 500 new FedEx Office locations within Walmart stores nationwide. The result is that, 80 percent of the U.S. population is within five miles of a FedEx hold location. So, FedEx has managed its global network with efficiency keeping customers’ convenience in mind.

#Price:

Following a difficult 2014, FEDEX was forced to make changes to its pricing strategy targeted at improving its revenue and profits. In May 214, it announced the application of dimensional weight pricing to all ground packages. The customers will not be charged just on the basis of weight but on the basis of dimensional weight. Dimensional weight of the package can be calculated by multiplying length, breadth, and height of a package and then dividing it by 166. So, the bulky packages that occupy a lot of space, will be charged higher fees. FedEx will be charging customers on the basis of the space their products occupy in the trucks. This will afford the company a fairer price for its services. The results are obvious. The revenue and profits of FEDEX have increased during the past few years. However, FedEx also uses variable rate plans like its flat rate shipping. In this case, the customers are not required to weigh or measure shipments under 50 lbs. Special rates are applicable in case of FedEx same day and FedEx International Next Flight. Chargeable weight in the case of most shipments is the higher of the actual and the dimensional weight. You need to pack your shipment well so that it occupies less space if you do not want to be charged much.

#Promotion:

The shipping industry has grown highly competitive and therefore brands have to spend a lot on marketing and promotions. For the pasts three years, the advertising expenses of the brand have remained higher than 400 million dollars. In 2018, its advertising and promotions expenses reached  442 million dollars. FedEx has used a large variety of channels to reach its audience and to grow its market and customer base. From TV to other digital sources and channels the brand has used many channels. Apart from them, it has used its own website and social media for promotions and advertising.  Reward programs are also a very important promotional strategy followed by FEDEX. It has brought several types of reward programs for its customers. These strategies work to promote the brand and its services as well as engage the customers. These rewards range from merchandise, brand-name gift cards like GAP, Lowe’s, and Amazon.com to digital downloads including songs and e-magazines. Reward programs also include attractive discounts.

Apart from that, the brand has managed an attractive social media presence. It has a large base of fans and followers on social media platforms including Facebook, Twitter, YouTube, and Instagram. Apart from 2.5 million on Facebook and 98 K on Instagram the brand has 274 K followers on Twitter and around 72 K on YouTube. Videos and images are an important part of its promotional strategy. The brand has uploaded 435 videos to its YouTube account and some 300 photos and videos to Instagram. However, Instagram has overall more than 350 K posts related to FEDEX. It has used its own website for promotions in an efficient manner. Apart from tools that offer customers to acquire its services conveniently, brochures and other documents also work to promote the brand and its services. An excellent brand image already works favorably for FEDEX by helping it attract and retain customers.

#People:

FedEx had started as a simple team of 389 people. Now, this team has grown to more than 425,000. It has managed its human resources very well by hiring and retaining only the best. It is constantly looking for talented people with qualities like enthusiasm, honesty, creativity, and respect. To retain the best talent, it has applied several attractive programs and rewards. Some of the main programs that FEDEX uses to motivate its employees are attractive salaries, regular pay increases, paid holidays, health care programs, pension plans, and discounted travel programs. Apart from that, it has used several attractive rewards like the Five-Star award which is the highest award given at FEDEX, purple promise quality award, Bravo Zulu award, and humanitarian award. The brand works to keep its employees motivated and engaged. Human resources can be a major source of competitive advantage for any brand in the twenty-first century. FedEx has managed a large team in an excellent manner that supports the efficient delivery of its services throughout the globe. Pilots are a very important part of its workforce. The brand launched a special program in 2018 called ‘Purple Runway’.  It is an industry-leading pilot development program that is aimed at fulfilling the anticipated shortage of pilots in the coming years.

#Process:

The main focus of FEDEX is to provide its customers with the highest convenience and win and retain their trust. It is why the brand has continued to simplify its processes so as to provide its customers with the highest degree of convenience. The processes of pick up and drop off have been made simple. FedEx website provides some useful and unique tools that the customers may use to conveniently ship their packages. It has managed a large distribution network that connects several parts of the globe and provides many convenient options for shipping packages.  FedEx ground network has more than 130 automated facilities. This allows the brand to handle the extra high volume during the holiday season. FedEx can reroute and sort packages at any hub to better serve customers in weather contingencies and other unexpected situations.  Apart from large self-driving tugs that move large weights around inside the hubs the brand is also testing other automated technologies for higher efficiency.

#Physical Evidence:

FedEx is a global brand with its headquarters in Memphis, Tennesee and that touches 220 countries and territories. Its global network is managed through 670 aircraft, 5,000 hubs and facilities, and 180,000 motorized vehicles. Its website is also an important touchpoint that the brand uses to serve its customers.  The brand is served by several thousand motor vehicles all of which carry the Purple and orange logo on them. The logo is found on the brand’s packaging too. It works as an excellent branding strategy and makes the brand easily recognizable among the crowd of brands. Thousands of facilities worldwide act as links in the chain forming a strong ground network. FedEx is led by CEO and Frederick W Smith.

Sources:

  • FedEx ANNUAL REPORT 2018
  • FEDEX SWOT ANALYSIS

  • https://www.forbes.com/sites/greatspeculations/2015/01/07/three-key-strategies-driving-fedex-in-2015/#162283953695
  • https://www.fedex.com/content/dam/fedex/us-united-states/services/Service_Guide_2018.pdf
  • https://www.fedex.com/cn_english/careers/compensation.html
https://supplychain.fedex.com/enterprise-solutions/supply-chain/
CITE THIS.
APAPratap, A. (2018, November 25). FEDEX Marketing Mix. Retrieved February 11, 2020, from https://cheshnotes.com/fedex-marketing-mix/
MLAPratap, Abhijeet. “FEDEX Marketing Mix.” Aim-Blog, 25 Nov. 2018, cheshnotes.com/fedex-marketing-mix/.