FedEx, founded in 1973 by Frederick Wallace Smith, is a multinational delivery service based in Memphis, Tennessee. It is one of the first major shipping companies to provide overnight delivery as a stand-alone service.
In this case study, we are going to learn about FedEx Marketing Strategy, business strategy, & SWOT analysis marketing campaign and more.
Let’s begin by understanding about FedEx company
FedEx Corporation, formerly Federal Express Corporation, is an American multinational delivery services company. The company was established in Little Rock, Arkansas in 1971 as Federal Express Corporation by Frederick W. Smith.
FedEx has different key operating segments: FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services. It is in the process of opening 500 FedEx Office franchises inside US Walmart stores.
Every day, FedEx handles over 19 million packages. Also, FedEx owns 670 aeroplanes which makes FedEx’s cargo fleet the largest in the world. In terms of total revenue, FedEx ranked 50th among the Fortune 500 companies in the United States in 2018.
Now that we have basic knowledge about FedEx, let us look at the FedEx marketing mix in the coming section.
Marketing Mix of FedEx
The marketing mix is the multiple areas of focus through which a company promotes its brand or product in the market. FedEx uses 4Ps ( Product, Price, Promotion & Place) of the marketing mix to increase their marketing.
Let us see each one of them in the coming section.
FedEx Product Strategy:
FedEx offers a wide range of services, including shipping, tracking, managing shipments, packages, envelopes, etc.
For the convenience of the customers, home delivery is provided. It has trade networks that provide insurance and custom services and also provides third-party logistics. FedEx Express provides time-sensitive and air-ground express service.
FedEx Pricing Strategy:
In May 2014, FedEx announced the application of dimensional weight pricing. In this pricing strategy, the weight of the package was calculated by multiplying the length, breadth, and height of the package and then dividing the outcome by 166.
So, bulky packages were charged higher fees because they occupy a lot of space. In countries like China, it has kept a flexible pricing policy.
The company provides offers and schemes at different periods to attract customers. The profits of FedEx have increased during the past few years.
FedEx Place Strategy:
FedEx is a global brand. Its retailers are located in all regions of the world, regardless of how the customer’s package is shipped. Today FedEx is the leading courier brand with world-class infrastructure providing services in more than 220 countries. It also provides internet facilities for any bookings.
The only reason for its success is its distribution system. From the moment the courier or package leaves your house or business premises, one can track it until it reaches the destination.
FedEx additionally offers daily pickups and cancellations. Various customer care centres have been set up by the company to help the customers.
Compared to its competitors, it has a relatively low market share in the Kinkos (retail store) market.
FedEx Promotion Strategy:
FedEx has used a variety of channels to reach the audience. Also, it has used social media for its promotions. Outdoor hoardings are used frequently.
It has used various slogans to advertise the brand. Some popular FedEx phrases are “Our Most Important Package is Yours”, “Be Absolutely Sure”, “Relax, it’s FedEx”, and “When There is No Time”.
Its present slogan is “The World On Time
FedEx has also used sports as a promotional medium. The company has sponsored various basketball teams such as “FedEx Forum” and “The Heineken Cup” of Rugby. FedEx also signed a contract with the “Champ World Car Series”.
It has brought several reward programs for the customers. These strategies work to promote the brand. The rewards include discounts, brand name gift cards, Merchandise, etc.
Now that we have seen the 4P’s of the marketing mix that the company implies, let us now look at the business strategy of FedEx which is unique from its competitors.
Business Strategy of FedEx
FedEx has developed a unique business strategy to enable their companies to compete collectively, operate independently, and manage collaboratively.
Every FedEx company is committed to investing in the technologies and assets necessary to optimize its long-term earnings performance and cash flow.
The company competes collectively by standing up as a brand globally; they operate independently by focusing on their independent network to meet different customer needs; they work together to manage and maintain a loyal relationship with their employees, customers, and investors.
Their strategy of “collective competition, independent operation, and collaborative management” enables them to manage their business as an investment portfolio following the long-term best interests of the enterprise, rather than a specific operating company.
By focusing on the following five key areas, the company believes that it will maintain its unique position in the long term:
- E-Commerce: E-Commerce is growing day by day. Through their global transportation and technology network, they have contributed to and benefited from the development of e-commerce
- Business to business shipping: As the global economy recovers from the impact of the COVID-19 pandemic, they will continue to help their customers gain more visibility into their supply chain and near real-time information to manage the inventory. Also, they will improve their unique services so that they can meet the needs of high-tech and high-value-added industries.
- Operational Excellence: Operational excellence in today’s world must be achieved with first-class technology. They are using this technology in a variety of ways to improve the efficiency of the entire FedEx.
- International Profitability: Through the aircraft fleet modernization plan, the integration of TNT Express and the simplified regional organization structure of FedEx Express, the company is establishing a foundation for increasing international profitability.
- Quality of Revenue: The company is working on improving the revenue quality by focusing more on small and medium-sized businesses and strategically managing their large business-to-business customer portfolio.
Now that we have understood the unique business strategy of the brand, let’s look at the marketing strategy of FedEx.
FedEx Marketing Strategy
The main motto of FedEx is to increase jointly profitable relationships with its employees, companions, and supplies.
This corporation takes some unique marketing strategies to have bigger audiences. It uses commercials, group SMS, sponsoring events, location-based marketing.
- Sponsorship – Marketing Strategy of FedEx
FedEx has sponsored Formula One also known as William F1, which is the most viewed annual athletic (car race) event on television. It continues to draw a large audience from all over the world. FedEx has sponsored them for the past nine years.
Both organizations have a perfect partnership with similar values and goals. Their key ingredients of success are speed, dependability, technology, and collaboration.
These are some of the important sponsorships used by FedEx to popularize their efficiency in their services.
With this marketing strategy followed by FedEx comes to an end, so let’s see what marketing campaigns FedEx follows.
FedEx Marketing Campaigns
Marketing campaigns are a part of marketing strategy. Marketing campaigns are useful when it comes to increasing its productivity and popularity to the customers. FedEx mostly used advertising campaigns to grasp its audience.
Let’s look at some successful campaigns.
– Fast Talker – Marketing Campaign of FedEx
This commercial shows that FedEx is fast in packaging and delivering. This campaign was started from 1981 to 1983.
Check Super fast-talking FedEx commercial to know more about this campaign.
– Take The Drama Out For Delivery – Marketing Campaign of FedEx
In this campaign, FedEx portrays a different kind of idea that no matter what the situation is? FedEx will deliver its products without any delay.
Check this out FedEx – Zombie Outbreak! TVC. to know more about this campaign.
These are some of the marketing campaigns by FedEx, so now let us look at the SWOT analysis of FedEx.
SWOT Analysis of Fedex
A SWOT analysis is a technique that helps to define the Strengths, Weaknesses, Opportunities, and Threats of an organization. Let’s take a close look at the SWOT analysis of FedEx.
1. Strengths of FedEx
- FedEx has a huge network. FedEx stands 9th in the world for the number of labour pools. FedEx operates in 220 countries across the world.
- It is well known for its reliability, speed, and high-quality service.
- According to Forbes, FedEx is ranked 83th as per its brand equity and it has a brand valuation of a whopping $7.5 billion.
- One of the advantages of FedEx is the time commitment. FedEx operations are managed so well that timely delivery becomes the essence of the brand.
2. Weaknesses of FedEx
- Bad customer service is one of the weaknesses of the company. There have been a lot of complaints against FedEx delivery driver’s behaviour. This harms the company’s reputation.
- Currently, FedEx is reliable in US markets for revenue. Depending on any one thing for the majority of the revenue is always risky.
- FedEx’s goal is to satisfy customers and for that, they come up with innovative services which result in high operating costs.
3. Opportunities of FedEx
- The scale of global retail e-commerce sales is expected to grow from US$3.5 trillion in 2019 to US$6.5 trillion in 2023. FedEx has the opportunity to take full advantage of the growing demand for delivery services in the retail e-commerce sector.
- Demand for the courier, logistics, and freight services is increasing rapidly in emerging markets in Asia, Africa, and Latin America. By expanding to these places FedEx can increase its competitive advantage.
4. Threats of FedEx
- Oil prices remain high which is the biggest threat to FedEx. Unstable fuel prices can be a threat to the company.
- There is stiff competition in the market. FedEx is losing its market share to old and new players. If the competition increases it will be a threat to the company.
- Trade tension between the US and China can have severe adverse effects on FedEx’s international transportation business.
This is the SWOT analysis of FedEx, so let’s see how FedEx overcomes its weakness and threats and grabs the opportunity which ultimately changes into its strengths through the presence of social media.
Social Media of FedEx
FedEx is quite active on Instagram, Facebook, Twitter. The company shares its ideas of launching a new variety of services and posts pictures of their transportation, delivery services, and so on.
- Facebook Account of FedEx
As FedEx gives importance to its delivery services, it also shows that they are very friendly in all services through their posts.
- Instagram of FedEx
FedEx is very active on its Instagram official account where they keep interconnectedness with their customers. Instagram posts have an important impact on customer relationships.
- Twitter Account of FedEx
FedEx shows the audience a way of their services even in this pandemic period. They even share about this on their Twitter handle.
These are some of the posts on social media by FedEx that shows their unique delivery services, which is quite amazing.
Here the case study on FedEx comes to an end. Let us finalize this case study
FedEx is one of the successful brands in the industry. Through its marketing strategies and marketing campaigns, the brand has gained trust from its customers.
The company is well-positioned for success in the future as well. We looked at the competitors who are giving tough competition to the brand but also maintained their position. Overall, FedEx is well-positioned to serve as an industry leader.
It is trying its best to meet the demands of its customers by providing quality and quick services to them.
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