FedEx 8b

7/29/2019 FedEx 8b

1/20

Snehal Zarekar

Deep BanerjeeUmang Gupta

Indirasoni Macherla
http://www.benedict.com/images/wiz-fedex.gif

7/29/2019 FedEx 8b

2/20

Founded by Frederick W. Smith

1971 first incorporation

Main products are delivering packages to widespreadlocations within a short time.

Most profitable services- Priority One, Standard AirService, and Courier Pak

7/29/2019 FedEx 8b

3/20

April 17, 1973First day of Operations 186 packages

25 cities

Today 210 countries

Global network Asia-Pacific

Canada

Europe, Middle East, Africa Latin America-Caribbean

7/29/2019 FedEx 8b

4/20

:

over night service for packages Deliver on before12 noon on the next business day

Spcl. handling charges $2.5, for hazardous materials

$5 surcharges for signature security

Transportation of item upto 2 pounds in weight

Use of waterproof, tear proof envelopes,12 by 15.5 each

7/29/2019 FedEx 8b

5/20

Cost-$12.5 each for shipments &purchased inadvanced in quantities of 5 or more at a time.

Guaranteed delivery on the second business day afterpick up.

Less expensive

Even lower priority service

Third day delivery

Discontinued in Jan 1975

7/29/2019 FedEx 8b

6/20

Advertizing limited to local newspapers and to direct mails

Blitz teams of 4-5 sales person canvassed different cities,prior to startup

Contacted customers through- sales representatives,couriers, customer service agents

7/29/2019 FedEx 8b

7/20

Selected New York firm of Carl Ally, Inc. (Bombthrower) as the companies adv. agencies

Conducted tests on relative delivery speeds & costand used it as the basis for TV & print advertizing

campaign

7/29/2019 FedEx 8b

8/20

PRIORITY1STANDARD

AIR

SERVICE

ECONOMYCOURIER PAK

7/29/2019 FedEx 8b

9/20

:1976 spring survey:

24% used both courier pak and priority oneservices

Less than 1% used only courier pak

Capacity of air craft was 6200 pounds andavg wt. of package for P-1 and SAS was 14

pounds Avg wt of package for P-1 is one pound

FedEx also included delivery routes intosmall cities that other companies didnt

7/29/2019 FedEx 8b

10/20

Potential For Courier PakRoutine Air package market was 122.3m compared to emergency and

rush package which were 18m combined

Courier pak is in the routine air market and as tremendous growthpotential

From Exhibit 4- There was a continuous growth in both avg dailypackage vol. and avg daily revenue from 1974 to 1976

In sept 1974 courier pack prices inc. from $5 to $8.50 and after theeconomy air discontinued, prices further shot up to $12.5(2 times theoriginal price in 1974)

7/29/2019 FedEx 8b

11/20

FedEx would like to increase Courier Pakvolume from 1300 to at least 6000 perday

7/29/2019 FedEx 8b

12/20

Strategies

Identify Market Segment

Focus on people seeking the delivery servicefor emergency, rush and special handling ofdocuments and other small valuable items.

Exhibition 4 shows us that, in 1975 and 1976a majority of FEC's shipments were for nextday delivery.

7/29/2019 FedEx 8b

13/20

The review for delivery of documents or other smallitems are up to 870,000 pieces per day.

This implies that there are opportunities for shippersusing Courier Pak whenever their documentsweighted less than 2 pounds.

FedEx has to go through the process of opportunityidentification in adopting the needs of the customers.

Then opportunity organization matching determineswhether the identified market opportunity is

consistent with the company mission statement, i.e.FedEx aims at providing excellent service includingCourier Pak to its clients by delivering packagespromptly at the right time, at the right venue andreceived by the right person.

7/29/2019 FedEx 8b

14/20

It was the first company noticed that the needs ofpackages were different from the passengers, andemphasized in it to develop a unique system andtreat as their core business; while their competitorstreat it as a sideline business.

FedEx built up good image against its competitors

Finally comes to the opportunity evaluation, whichis to evaluate whether the attractiveness of FedExCourier Pak can match with the needs of potential

customers using the products.

From the case study, we forecast that there aregreat rooms for Courier Pak to growth.

7/29/2019 FedEx 8b

15/20

Change the habit of existing express servicescustomers

A comprehensive national advertising campaignshould be planned and broadcasted throughdifferent media, ranging from magazine, tradeperiodicals, television, radio, etc, notify thepotential customers the benefit in using CourierPak for delivery.

The use of advertisement can arouse customerswho delivered documents or other small items toconsume Courier Pak, especially to capture theattention of those industries that have the mostpackage delivery needs.

Assign a slogan for Courier Pak An effective slogan can best reflect the reliability

of a company products, since a slogan mentionsthe benefits of using Courier Pak.

7/29/2019 FedEx 8b

16/20

The selling point for the Courier Pak should befocused on its special feature-the waterproof

and tear proof envelopes.

In the advertisement, FedEx can point out thatthe customers need to spend only a specific

price for the package weights up to 2 pounds,the packages can be delivered to anywherewithin FedEx operational territory by overnightCourier Pak service.

Emphasized on the speed, reliability andsecurity Courier Pak provided compared withtheir competitors.

7/29/2019 FedEx 8b

17/20

Base on the product market fit, Courier Pakcompletely fit the company, from theenvironmental, company, cost andcompetitive standpoint.

So we think that FedEx should devote specialemphasize to Courier Pak.

7/29/2019 FedEx 8b

18/20

Expanding the target market to :

-Corporate Market and negotiating for long termhigh volume contracts

-Emergency part shipments

-Medical shipments Offsetting the market leaders lingering strengths

by Product differentiation : Utilization of its ownairplanes and the Memphis hub

Focusing on a single value proposition of overnightdelivery

7/29/2019 FedEx 8b

19/20

Concentration on more efficient logisticalsystem

Frequent update of technologies and upgradation of software

Can be associated with sport stars in termsof reliability, teamwork, precision & flawlessexecution

7/29/2019 FedEx 8b

20/20

THANKYOU.

Documents

FedEx 8b