FedEx Express - 4P's Marketing Mix Concept - Essay Example

?FedEx Express From Federal Export to FDX then FedEx and all its subsidiaries and acquisitions is been discussed. The shining star of FedExCorporation is FedEx Express. From its starts to struggle, during subprime crisis then European economic slowdown to the rise of South East Asian market and shift of the center of mass of the global economy from western world to eastern world FedEx Express was in business and continuing it prominently because of its strategic management and superior marketing team. Introduction: FedEx Corporation’s headquarter in Memphis, Tennessee and it’s an America base international courier services organization. Previously during 1973 to 2000 this company’s air service system used to call as Federal Express. And that later became FedEx. FedEx started its business long back in 1997 as a logistics services company which specialization was import/ export division with the name FDX. But it started its full operation in 1998 after the acquisition of Caliber System Inc. After that it started ground services with express shipping. Caliber handled the small package ground service and RPS; Viking Freight handled the less than truck loads throughout the western United States, Roberts Express handled the shipping services, airfreight services between Caribbean and United States handled by Caribbean Transportation Services. For technology solutions it got help from Caliber Logistics and Caliber Technology. Later in 2000 FedEx bought Tower Group International which was a logistics services company working internationally and WorldTariff which was a tax and customs duty organization. And then merged those two organizations, and form FedEx Trade Network. (FedEx Express, 2013) The main line of business of the FedEx Express: Later in 2004 FedEx Corp takes over Kinko’s Inc. and set up FedEx Kinko’s. After this merging FedEx not only became a logistics provider for organizations but it enhance its operation to the individual public. After that all the FedEx Kinko retail stores starts offering shipping exclusively but later in 2008 FedEx exclude Kinko’s name from its name and made it FedEx Office. During 2004, FedEx bought Parcel Direct and renamed it as FedEx SmartPost. FedEx Express is an airline service which only dealt with cargo. In terms of freight tons it is the largest airline of the world and in terms of size of the fleet the fourth largest airline of the world. Names of the countries in which the FedEx operates: FedEx Express served to 375 destinations every day to almost all the countries. As the largest express transportation company of the world it headquarters in Memphis International Airport except that in United States of America its national hub is in Indianapolis International Airport. Other regional hubs in United States of America are Ted Stevens Anchorage International Airport, Oakland International Airport, Newark Liberty International Airport, Fort Worth Alliance Airport and Miami International Airport. Outside of United States of America other regional headquarters are like Paris-Charles de Gaulle Airport, Guangzhou Baiyun International Airport, Toronto Person International Airport and Cologne Bonn Airport. Another airport which was about to open for FedEx Express was Piedmont Triad International Airport. 4P's marketing mix concept by the FedEx: Competition: Competitors for FedEx are ARAMEX, BAX Global, Choice Logistics, DHL Express, Purolator Courier, TNT N.V., United Parcel Service etc. Other freight competitors for FedEx Express in international market are like DHL, UPS (United Postal Service) from United States. And from foreign countries like Deutsche Post, TNT N.V. Except them others are like freight forwards, and other passengers and cargo airlines. Many competitors of FedEx are government controlled or subsidized organizations. Because of that those organizations have better resources; costs of services are low, low profit margin and favors regarding government policies and rules-regulations. Target market: FedEx made a seven year contract in 2001 with United States Postal Service (USPS). Because of that FedEx can use all its postal houses throughout the country. In 2007 USPS (United States Postal Service) extend its contract until 2013. And still USPS (United States Postal Service) is the most valuable customer in volume of services for FedEx Express. FedEx is targeting the developing market of the world and for developing market the first target should be South East Asian market. Countries like Singapore, Malaysia, Hong Kong, China, Taiwan, Indonesia, India, Vietnam and other BRIC countries like Brazil, Russia and other American developing countries like Mexico, Argentina. Product strategy: FedEx express is a service provider. It delivers mail and logistics to more than three hundreds and Seventy five locations. Earlier in 1980 a plan to make FDX was came up with the collaboration of British Airways but it scrapped later to give services in Britain, Ireland and other European countries. In 2000 FDX changed its name to FedEx and rebranded it. As a result Federal Express renamed FedEx Express, RPS renamed as FedEx Ground, Roberts Express renamed as FedEx Custom Critical, Caliber Logistics merged with Caliber Technology and became FedEx Global Logistics. And to keep synchronization with all the branches like customer relationship, marketing, sales and all other subsidiaries a new branch was formed named as FedEx Corporate Services. (Amsler, Cullen , Erdmenger 2010) Distribution strategy: FedEx express has the world largest fleet of cargo airplanes. Total carrier of over 600 including aircrafts like Airbus A300, Airbus A310, ATR 42, Cessna 208, McDonnell Douglas DC-10/MD-11 and also McDonnell Douglas MD-11. Except that FedEx has Boeing 727 of 1984 to latest A300/A310 of 2007. For emergency and quick response services FedEx has some extra aircraft in service. Communication strategy: FedEx do its services in several locations in North America like United States, Canada (English & French), Mexico. For South American locations where FedEx serves are Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, French Guiana and Guyana. And for Europe and Middle East locations it serves countries like Bahrain, Belgium, France, Germany, Italy, Kuwait, Spain, Switzerland, The Netherlands, United Arabian Emirates (UAE) and United Kingdom (UK). FedEx gives its services in African locations like Egypt, Morocco, Nigeria and South Africa. For Asia and Indian Subcontinent locations like China, Hong Kong, India, Japan, Singapore, South Korea, Thailand and Taiwan. For Oceanic and Pacific locations like American Samoa, Australia, Fiji, Guam, New Zealand, Saipan, Vanuatu, Wallis and Futuna (FedEx, 2013). Pricing strategy:  During the stressed condition of global slowdown FedEx Express increased as a rate of 4.4%. That was possible because of FedEx’s strategic pricing methods and discounts given to the customers. In last pricing policies FedEx increased its prices in following segments like- Average increase in first overnight of FedEx is 5.76%. Average increase of overnights by priority is 5.99%. Average increase of standard overnight is 6.56%. Average increase of FedEx 2 Day services is 6.65%. Average increase of 3 day express saver by FedEx is 7.74%. Average increase in priority export of international services is 6.47%. Average increase in international economy export is 6.69%. Average increase in priority import of international services is 5.85%. Average increase in international economy import is 5.48%. FedEx is charging for address correction purpose for United States and international market is from $ 1.00 to $12.00. Which is 9.1% increase. Surcharge for increases for residential is from $0.20 to $3.20. This is an increase of 6.7%. Declaration value increases per $100.00 from $0.05 to $0.85. This is an increase of 6.3%. And minimum charge is up from $0.15 to $2.55. That is a 6.3%. Surcharge up for commercial delivery is from $0.15 to $2.15. That is an increase of 7.5%. Surcharge up for residential delivery area is from $0.25 to $3.25. That is an increase of 8.3%. Delivery area if extended then applied surcharge increase from $0.25 to $2.25. That is an increase of 7.7%. Signature requirement which is indirect charge is up from $0.25 to $2.25. That is an increase of 12.5%. For incorrect account number or missing account number charges increase from $1.00 to $11.00. That is an increase of 10%. (Xinhua News Agency February 23, 2009) Conclusion: So it is clear that though during global economic slowdown FedEx Express services faced struggle but still it’s growing. FedEx Express’s pricing policies and innovative and straight forward strategies helped it to tackle economic crisis very effectively. Reference: FedEx, (2013). Shipping Locations. Retrieved from < http://www.fedex.com/> Amsler, Cullen , Erdmenger (2010). Strategic Repot for FedEx Corporation. Retrieved from < http://economics-files.pomona.edu/jlikens/SeniorSeminars/vector2010/pdf/fdx.pdf> Xinhua News Agency, (2009). FedEx's low-price strategy causes panic among domestic players. Retrieved From < http://www.china.org.cn/business/news/2009-02/23/content_17319474.htm> FedEx Express, (2013). FedEx Global Trade Manager. Retrieved from < https://www.fedex.com/GTM?cntry_code=in> Read More