Case Study 1: Fed Ex – FedEx Packages Marketing for Overnight SuccessoFacts Frederick W. Smith founded Federal Express Corporation in 1973. Only U.S. Postal Service and United Parcel Service (UPS) were the only other means of delivery.It was started based on an idea Smith thought of when he was studying in Yale in 1965. He believed that people would pay more to get packages delivered overnight. FedEx started shipping packages overnight from Memphis, Tennessee on April 17, 1973. Only six packages were handled that first night. Today, FedEx handles more than 3 million overnight packages & documents as well as 6 million shipments in a day; controlling more than 50% of the overnight delivery market. They own 42,000 drop boxes or 715 world service centers apart from their courier serviceto facilitate delivery. Thus raking in $31 billion in total revenue. FedEx owns 70,000 vehicles, 677 aircraft with 500,000 daily mileages, operating its own weather forecast service and using high-tech software to manage the logistics of planes. 2004, FedEx merged with Kinko so as to reach new customers in 11 other countries and expand into Asia and Europe. Due to emergency situations in 2004 and 2005, FedEx has now stationed 8 planes loaded with supplies and 5 cargoless planes roam the sky for unexpected situations. FedEx has been named one of the “100 Best Companies to Work For” for 8 consecutive years. oProblems FedEx met with competitors and disruptions to agreements with the U.S. Postal Service, thus unable to acquire exclusive right to drop boxes in postal offices.
Fedex marketing Case Essay
1347 WordsOct 23rd, 20146 Pages
Case 1: “Federal Express”
Company analysis – Does Courier Pak (CP) make sense for Fed Ex
FedEx’s new product Courier Pak makes sense because of its’ high profit margin and potential to generate new volume. Out of the 3 services that Fed Ex provides, CP yields the highest profit margin at 66% while Priority-One is at 55% and SAS is only at 27%. In addition to this, the company believes that it will be able to boost up sale of CP from 1300 to 6000 packages per day. This shows that CP is the most profitable and huge potential for growth.
Customer analysis – Who needs CP? How large is the market? Is CP an economically viable product? Can FedEx do 6000 CPs a day?
If you look at the current market for Special-Handled Packages there is…show more content…
Due to the fact that carrying capacity of the Falcons usually reached its maximum volume before it reached the maximum load allowance, CP is definitely the solution to balance this volume to weight ratio. With the estimation that 10-lb cargo took up about one cubic foot of space, CP’s volume is about 0.1 cubic foot while SAS and P1 is around 1.4cubic foot. The average daily package volume for the week ended 5/7 for both SAS and P1 is 19,422 while CP is 1,304. This yielded a total of 27321.2 cubic feet which accounts for 85% of volume capacity. At 100% volume capacity will be approximately 32,142 cubic feet which allows additional 4820.8 cubic feet to be filled with 48208 CP. This shows that it is definitely viable for Fed Ex to hit the goal of 6,000 CP a day without going over its maximum volume capacity.
Competition – What is the competition for CP?
There is intense competition for the Fed Ex Courier Pack in the package delivery market. Airlines by providing same day package service delivery are strongly represented in this market. The strongest competition for CP would be the in the overnight delivery sector which are mainly the air freight forwarders particularly, Emery who is a huge player in this segment of the market.
How should Fed Ex market CP? Which industries should Fed Ex focus on?
In order to find a right marketing strategy for this product, the firm