Abstract
FedEx in an international firm that deals in overnight delivery services within the US, Canada, and to more than 210 countries around the world. This paper provides a brief analysis of the firm’s marketing mix by using the 4P’s model. Overall, the firm provides standardized products at same prices worldwide. Additionally, FedEx has a global promotion strategy aimed at helping the firm develop a recognized global brand.
Introduction
FedEx main line of business is overnight delivery. However, the company provides e-commerce, transportation, and business services through subsidiary companies operating within the US and internally. The company’s FedEx Express unit is the global leading provider of express transportation, delivering more than 3.4 million parcels daily to more than 210 countries (Yahoo Finance, 2012). This unit operates a fleet of more than 50,000 vehicles and trailers, and about 700 aircrafts. In order to compliment these services, FedEx Ground specializes in ground delivery of small packages. Conversely, FedEx Freight unit offers freight delivery services throughout Mexico and Canada. This brief study details the implementation of the four Ps marketing concept by FedEx Inc, and describe any observable difference in implementation of this concept from one country to another.
4 Ps of marketing mix
Price
The company has a cost advantage, which makes it able to price their services aggressively. The price charged by FedEx depends on the cost gas, market research, and promotions. The company charges prices that are slightly lower than that of major competitors such as DHL and UPS. As the company’s mission is to provide superior financial returns to its shareholders, FedEx uses cutthroat business technique, in which they charge high prices with the hopes that consumers will accept it based on company’s brand image (Bowman and Gatignon, 2010). However, in China, FedEx domestic express service reduced prices by more than 70 percent to increase its market share. FedEx offers discount programs on the company’s ground services within the US and Canada. Additionally, FedEx ground provides pick up services upon request at an additional cost of $6 per week. Generally, the company offers same prices worldwide.
Product
The company has a wide product portfolio that includes:
- FedEx Express, which is the second largest express service around the world, provides services across Puerto Rico, US mainland, the Dominican Republic, and other countries within Caribbean island.
- FedEx provides smart post and home deliveries.
- FedEx Ground provides delivery services within North America and Canada.
- Additionally, FedEx Trade provides insurance and logistics services to customers.
- Other products provided by the company include FedEx Corporate Services, FedEx Supply Chain Services, FedEx Office and Print Centers, and FedEx Ship Centers.
FedEx has a global network in more than 210 countries, broken down into four Express segments. The company does not need to customize their services because they provide standardized products. The ISO 9001 certification reinforced the standardization of FedEx’s services globally.
Promotion
FedEx has invested in traditional print and broadcasting advertisements that run throughout the year. The company spends large amounts on commercial advertisements, resulting into formulation of high quality ads that remains in the mind for years such as John Moschitta advert. Additionally, FedEx has sponsored several sports activities including motor sports, football among others. Currently, FedEx is the official sponsor of the National Football League (NFL). Such activities have the potential of enhancing the company’s brand image. One major reason for the company’s success is lobbying. FedEx spent $50.81 million on lobbying from 2008 to 2010, compared with spending of $37 million on federal tax bill (Sanders, 2012). The company makes political contributions to defend its business from legislations and regulations that would cause harm to its business. FedEx has a universal global advertising campaign, put simply as “Relax It’s FedEx”. FedEx also gives cash back to customers for pushing its products.
Place
The company has a global network spanning in more than 210 countries. However, FedEx business is concentrated within the US and Canada but also extends to other regions in the world through its air fleet. As part its global expansion, 60 percent of sales from FedEx Express continues to go outside the US, particularly in India, China, Europe, and Latin America. In 2012, FedEx acquired some companies in Poland, Mexico, Brazil, and France to enhance its regional presence and capabilities in these key markets (Yahoo Finance, 2012). The company has an international e-business website from where it conducts its business operations.
Conclusion
FedEx has offers standardized products across the globe. However, the firm should adopt multi-domestic strategy, which involves price reduction and tailoring of products and services to the local market. The company should focus more on its ability to ensure independent networks work to meet the distinctive needs of customers. This will also require the company to apply different prices according to region. The company should charge low prices in developing economies to makes the consider FedEx an option for delivery services. FedEx should also increase its acquisition plans to expand its global market coverage. This will enhance the company’s market position despite the increasing competition from UPS and DHL. Additionally, adapting services and prices to different locations would help the company get high local responsive.
Little difference exists on how the company implements the 4Ps marketing concept. The company offers same prices, standardized services, and promotion across all locations. However, there are disparities for example, in India where FedEx had to reduce its prices drastically to attract a larger local market share.
References:
Bowman, D. and Gatignon, H. (2010). Market response and marketing mix models. Norwell, MA: Now Publishers Inc.
Sanders, B. (2012, April 19). Why FedEx spent so much money on lobbying. The Examiner. Available from
Yahoo Finance. (2012). FedEx Corporation: company profile. Available from
