A Project report

On

(BRAND MANAGEMENT)

Submitted by:

Kajal Saini

10BSPHH010306

Section- F

CHAPTER -1

ORIGIN AND GENESIS OF BRAND FEDEX

The concept for what became Federal Express came to Fred Smith while he was studying at Yale University. For a class there, he submitted a paper which argued that in modern technological society time meant money more than ever before and with the advent of miniaturized electronic circuitry, very small components had become extremely valuable. He argued that the consumer society was becoming increasingly hungry for mass-produced electronic items, but the decentralizing effect induced by these very devices gave manufacturers tremendous logistic problems in delivering the items. Smith felt that the necessary delivery speed could only be achieved by using air transport. But, he believed that the US air cargo system was so inflexible and bound by regulations at that time that it was completely incapable of making sufficiently fast deliveries. Plus, the US air cargo industry was highly unsuited to the role. Its system depended on cooperation between companies, as interlining was often necessary to get a consignment from point A to point B, and the industry relied heavily on cargo forwarders to fill hold space and perform doorstep deliveries.

In his paper, Smith proposed a new concept - have one carrier be responsible for a piece of cargo from local pick-up right through to ultimate delivery, operating its own aircraft, depots, posting stations and delivery vans. To ensure accurate sorting and dispatching of every item of freight, the carrier would fly it from all of its pickup stations to a central clearinghouse, from where the entire operation would be controlled. He submitted the paper to the professor teaching the course, who gave the paper the grade of "C". Despite the professor's opinion, Smith held on to the idea.[5]

He founded the Federal Express Corporation in 1971. It was originally founded in Little Rock, Arkansas in 1971, as Smith was operating Little Rock Airmotive there. After a lack of support from the Little Rock National Airport, Smith moved the company to Memphis, Tennessee and the Memphis International Airport in 1973.

The company started overnight operations on April 17, 1973 with fourteen Dassault Falcon 20s that connected twenty-five cities in the United States. That night, 18 packages were carried. Services included both overnight and two-day package and envelope delivery services, as well as Courier Pak. Federal Express began to market itself as "the freight service company with 550-mile-per-hour delivery trucks". However, the company began to experience financial difficulties losing up to a million USD a month. While waiting for a flight home to Memphis from Chicago after being turned down for capital by General Dynamics, Smith impulsively hopped a flight to Las Vegas, where he won $27,000 playing blackjack. The winnings enabled the cash-strapped company to meet payroll the following Monday. "The $27,000 wasn’t decisive, but it was an omen that things would get better," Smith says. In the end, he raised somewhere between $50 and $70 million, from twenty of the USA's leading risk venture speculators, including such companies as the First National City Bank of New York and the Bank of America in California. At the time, Federal Express was the most highly financed new company in US history, in terms of venture capital.

Federal Express installed its first drop box in 1975 which allowed customers to drop off packages without going to a company local branch. In 1976, the

company became profitable with an average volume of 19,000 parcels per day.

The 1977 Airline Deregulation Act (Public Law 95-163) removed restrictions on the routes operated by all-cargo airlines, and enabled Federal Express to purchase its first large aircraft: seven Boeing 727-100s. In 1978, the company went public and was listed on The New York Stock Exchange. The following year it became the first shipping company to use a computer to manage packages when it launched "COSMOS" (Customers, Operations and Services Master Online System), a centralized computer system to manage people, packages, vehicles and weather scenarios in real time. In 1980 the company implemented "DADS" (Digitally Assisted Dispatch System) to coordinate on-call pickups for customers; this system allows customers to schedule pickups for the same day.

In 1980, Federal Express began service to a further 90 cities in the United States. The following year the company introduced its overnight letter to compete with the US Postal Service's Express Mail, and allowed document shipping for the first time. Later in 1981 it started international operations with service to Canada, and officially opened its "SuperHub" at the Memphis International Airport.

Federal Express' sales topped $1 billion for the first time in 1983. In the same year the company introduced ZapMail, a fax service that guaranteed the delivery of up to five pages in less than two hours for $35. ZapMail would later become a huge failure for the company, costing it hundreds of millions of dollars.

In 1986, the company introduced the "SuperTracker", a hand-held bar code scanner which brought parcel tracking to the shipping industry for the first time. Federal Express continued its rapid expansion in the late 1980s, and opened its hub at Newark Liberty International Airport in 1986 and at Indianapolis International Airport and Oakland International Airport in 1988. In 1989, the company acquired Flying Tiger Line, an all-cargo airline with flying rights to 21 countries to expand its international service, and subsequently opened a hub at Ted Stevens Anchorage International Airport to accommodate this new, expanded service. As the volume of international shipments increased, Federal Express created Clear Electronic Customs Clearance System to expedite regulatory clearance while cargo is en route. For the first time, FedEx had governmental permission to carry documents, packages and freight to multiple Asian destinations on a regular schedule including: Hong Kong, Japan, Korea, Malaysia, Singapore, Taiwan and Thailand.

As economies across Asia Pacific began to grow and prosper, FedEx's shipment volumes and its presence in the marketplace began to expand as well. Recognizing a need for the company to be closer to Asian customers, FedEx moved its Pacific headquarters from Hawaii to Hong Kong in 1992.

In 1994, Federal Express adopted the "FedEx" name, formalizing the abbreviation that until then was unofficial. Also that year, FedEx launched Fedex.com as the first transportation web site to offer online package tracking, which allowed customers to conduct business via the internet. In

1995, the company acquired air routes from Evergreen International to start services to China, and opened an Asia and Pacific hub in Subic Bay International Airport in the Philippines. The company's success in meeting customers' needs resulted in the creation of an innovative unparalleled network called FedEx AsiaOne launched in September 1995. This launch included five trans-Pacific flights, the creation of an Asia Pacific hub in Subic Bay, Philippines, and the creation of an overnight intra-Asian delivery network connecting 11 major Asian centers. The network was expanded to 19 Asian destinations in 2001.

In September 1997, FedEx announced the world's first 'Round-the-World' cargo flight, which originated in Indianapolis, Indiana, and continued to Paris, Dubai, United Arab Emirates, Mumbai, India, Bangkok, Thailand, the Subic Bay Asia hub in the Philippines, and ended in Anchorage, Alaska, U.S.In the same year it opened its hub at Fort Worth Alliance Airport and in 1999 opened a European hub at Charles de Gaulle International Airport in France. In 2000, the company officially dropped the "Federal Express" name and became "FedEx Express" to distinguish its express shipping service from others offered by its parent company FedEx Corporation.

In 2001, FedEx Express signed a 7-year contract to transport Express Mail and Priority Mail for the United States Postal Service. This contract allowed FedEx to place drop boxes at every USPS post office. In 2007, the contract was extended until September 2013. USPS continues to be the largest customer of FedEx Express.

In December 2006, FedEx Express acquired the British courier company ANC Holdings Limited for £120 million. The acquisition added 35 sort facilities to the FedEx network and the company introduced Newark, Memphis, and Indianapolis routes directly to UK airports instead of stopping at FedEx's European hub at Charles de Gaulle Airport. In September 2007, ANC was rebranded as FedEx UK. FedEx Express also acquired Flying-Cargo Hungary Kft to expand service in Eastern Europe.

The late-2000s recession hit parent company FedEx Corporation and its express division hard. Many companies looking for ways to save money stopped shipping or moved to cheaper alternatives, such as surface shipping. FedEx Corporation announced large network capacity reductions at FedEx Express, including retiring some of its oldest and least efficient aircraft such as the McDonnell Douglas DC-10 and the Airbus A310. FedEx also announced layoffs and work hour reductions at some of its hubs.

In December 2008, FedEx postponed delivery of the new Boeing 777 Freighter, four were delivered in 2010 as previously agreed, but in 2011, FedEx only took delivery of four, rather than the 10 originally planned. The remaining aircraft will be delivered in 2012 and 2013.

FedEx Express closed a hub for the first time in its history, when operations at its Asian-Pacific hub at Subic Bay International Airport in the Philippines ceased on February 6, 2009. The operations were transferred toGuangzhou Baiyun International Airport in southern China. FedEx Express had planned to open the new Chinese hub in December 2008 but in November 2008, the company delayed the opening until early 2009 citing the need to fully test the new hub.

On June 2, 2009, FedEx opened the new hub building at Piedmont Triad International Airport in Greensboro, North Carolina. FedEx announced in December 2008, that it still intended to open the building on time, despite the bad economy. The hub's operations would be scaled back from 1,500 employees to only 160, the size of the previous operations at the much

smaller sorting facility. FedEx gave no time line as to when the hub will be operating at expected hub levels. The hub had been delayed many years since FedEx first picked the airport to be its Mid-Atlantic U.S. hub back in 1998. FedEx had to fight many complaints from nearby homeowners about the anticipated noise generated by its aircraft, because most of its flights take place at night. A third runway was built to accommodate the hub operation and the extra aircraft.

On October 27, 2010, FedEx opened its Central and Eastern European hub at Cologne Bonn Airport. The hub features a fully automated sorting system that can process up to 18,000 packages per hour. The roof of the hub features FedEx's largest solar power installation, producing 800,000 kilowatt hours per year.

CHAPTER -2

COMPANY THAT OWNS AND OPERATES THE BRAND

FedEx Express is part of transportation powerhouse FedEx Corporation. FedEx Corporation provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $39 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 290,000 team members to remain "absolutely, positively" focused on safety, the highest ethical and professional standards and the needs of their customers and communities.

FedEx Corporation (FedEx), incorporated on October 2, 1997, is a holding company. The Company provides a portfolio of transportation, e-commerce and business services under the FedEx brand. FedEx Corporation is a Delaware corporation, incorporated October 2, 1997. FDX Corporation was founded in January 1998 with the acquisition of Caliber System Inc. by Federal Express. With the purchase of Caliber, FedEx started offering other services besides express shipping. Caliber subsidiaries included RPS, a small-package ground service; Roberts Express, an expedited shipping provider; Viking Freight, a regional, less than truckload freight carrier serving

the Western United States; Caribbean Transportation Services, a provider of airfreight forwarding between the United States and the Caribbean; and Caliber Logistics and Caliber Technology, providers of logistics and technology solutions. FDX Corporation was founded to oversee all of the operations of those companies and its original air division, Federal Express. In the 1980's FedEx planned, but later abandoned, a joint service with British Airways to have BA fly a Concorde to Shannon, Ireland with FedEx packages onboard and then FedEx would have flown the packages subsonically to their delivery points in Europe. Ron Ponder, a vice president at the time, was in charge of this proposed venture. In January 2000, FDX Corporation changed its name to FedEx Corporation and re-branded all of its subsidiaries. Federal Express becameFedEx Express, RPS became FedEx Ground, Roberts Express became FedEx Custom Critical, and Caliber Logistics and Caliber Technology were combined to make up FedEx Global Logistics. A new subsidiary called FedEx Corporate Services was formed to centralize the sales, marketing, customer service for all of the subsidiaries. In February 2000, FedEx acquired Tower Group International, an international logistics company. FedEx also acquired WorldTariff, a customs duty and tax information company, TowerGroup and WorldTariff were re-branded to formFedEx Trade Networks.

FedEx Corp. acquired privately held Kinko's Inc. in February 2004 and rebranded it FedEx Kinko's. The acquisition was made to expand FedEx retail access to the general public. After the acquisition, all FedEx Kinko's locations exclusively offered only FedEx shipping. In June 2008, FedEx announced that they would be dropping the Kinko's name from their ship centers, with FedEx Kinko's changing to FedEx Office.

In September 2004, FedEx acquired Parcel Direct, a parcel consolidator, and re-branded it FedEx SmartPost.

In December 2007, the Internal Revenue Service of the United States 'tentatively decided' that FedEx Ground Division might be facing a tax

liability of $319 million for 2002, due to misclassification of its operatives as independent contractors. Reversing a 1994 decision which allowed FedEx to classify its operatives that own their own vehicles, the IRS is auditing the years 2003 to 2006, with a view to assessing whether similar misclassification of operatives has taken place. FedEx denies that any irregularities in classification have taken place, but is facing legal action from operatives claiming benefits that would have accrued had they been classified as employees.

On October 22, 2008, the Internal Revenue Service withdrew its tentative assessment of tax and penalties for the 2002 calendar year ($319 million plus interest) against FedEx Ground Package System, Inc. (“FedEx Ground”) relating to the classification of FedEx Ground’s owner-operators for federal employment tax purposes.

In June 2009, FedEx began a campaign against UPS and the Teamsters union, accusing its competitor of receiving a bailout in an advertising campaign called "brown bailout". FedEx claims that signing the Federal Aviation Administration re-authorization bill, which would let some of its workers unionize more easily (and, according to the Memphis-based company, "could expose [its] customers at any time to local work stoppages that interrupt the flow of their time-sensitive, high-value shipments”), is equivalent to giving UPS a 'bailout'. Independent observers have heavily criticized FedEx's wording, claiming that it was "an abuse of the term". FedEx Express employees are regulated under theRailway Labor Act.

Operating units and logos:

FedEx is organized into operating units, each of which has its own version of the wordmark, designed by Lindon Leader of Landor Associates, of San Francisco, in 1994. The Fed is always purple and the Ex is in a different color

for each division and grey for the overall corporation use. The original "FedEx" logo had the Ex in orange; it is now used as the FedEx Express wordmark. The FedEx wordmark is notable for containing a hidden right-pointing arrow in the negative space between the "E" and the "X", which was achieved by designing a proprietary font, based on Univers and Futura, to emphasize the arrow shape.

FEDEX OPERATING COMPANIES:

The Standard Carrier Alpha Code (SCAC) is a unique code used to identify transportation companies. It is typically two to four alphabetic letters long. It was developed by the National Motor Freight Traffic Association in the 1960s to help the transportation industry for computerizing data and records.

FDE – FedEx Express FDEG – FedEx Ground FXFE – FedEx Freight FDCC – FedEx Custom Critical

FedEx Express Airbus A310-200

FedEx Ground delivery truck

FedEx Freight Truck

FedEx Express (Orange "Ex"): The original overnight courier services, providing next day air service within the United States and time-definite international service. FedEx Express operates the second largest civil aircraft fleet in the world (after Delta Air Lines) and the largest fleet of wide bodied civil aircraft; it also carries more freight than any other airline. Caribbean Transport Services: Until 2008, a part of FedEx Freight.

Provides airfreight forwarding services between the US mainland, Puerto Rico, the Dominican Republic, and other Caribbean  islands.

FedEx Ground (Green "Ex"): Guaranteed day-definite delivery within Canada and the United States at a cost savings as compared to time-definite FedEx Express. Uses a large fleet of trucks which are owned by the independent owner/operators and drivers are independent

contractors who control individual delivery routes and territories. Formerly Roadway Package System (RPS). FedEx Home Delivery: A division of FedEx Ground, specializing in

residential delivery Tuesday through Saturday and offers delivery options to provide more flexibility for residential recipients. The logo includes a drawing of a dog carrying a package . FedEx Home Delivery only operates in the United States. To make up the difference, FedEx Ground in Canada performs the business deliveries and residential deliveries.

FedEx SmartPost (Grey "Ex"): Consolidates parcels from merchants such as e-commerce and catalog companies and uses the United States Postal Service for the final delivery. Formerly the independent company Parcel Direct until FedEx acquired them for $120M in 2004.

FedEx Freight (Red "Ex"): Less than truckload (LTL) and other freight services. The second largest LTL carrier in the United States, with $4.5 billion in revenue for 2008. FedEx Freight, Inc: Formerly American Freightways, Viking Freight,

and Watkins Motor Lines. FedEx Freight Canada: Formerly Watkins Canada Express. FedEx Custom Critical: Delivers urgent, valuable, or hazardous

items using trucks and chartered aircraft. Freight not accepted for transport includes perishable food, alcohol, livestock, household goods, hazardous waste and money. Drivers are independent contractors who own their vehicles. Service in Mexico uses interline carriers. FormerlyRoberts Cartage or Roberts Express.

FedEx Trade Networks (Yellow "Ex"): Provides services relating to customs, insurance, and transportation advice. Formerly C.J. Tower & Sons, then Tower Group International.

FedEx Supply Chain Services (Grey "Ex"): Provides logistics services including Critical Inventory Logistics, Transportation Management

Services, Fulfillment Services, etc. Formerly Roadway Logistics System, then Caliber Logistics.

FedEx Corporate Services (Grey "Ex"): Provides global marketing, planning and information technology (IT) services for the other FedEx operating companies.

FedEx TechConnect: Offering a customer service toll-free telephone line for customer questions. It is operated by an automated operator then will prompt the user to a live agent for uses of tracking, claims, scheduling pick-ups (Express, Ground, Same Day, Custom Critical, Freight Express, and Freight LTL), compliments and complaints, locations (both staffed counter locations and drop-boxes), ordering supplies, setting up FedEx accounts, billing etc. Formerly FCIS or FedEx Customer Information Services.

FedEx Kinko's

FedEx Office (formerly FedEx Kinko's) (Blue "Ex"): The retail arm of the corporation, offers copying and digital printing, professional finishing, document creation, Internet access, computer rentals, signs and graphics, direct mail, Web-based printing, and FedEx shipping. Formerly an independent company, known as Kinko's until it was acquired by FedEx in 2004 and rebranded to FedEx Kinko's. In June 2008 the company was finally rebranded as FedEx Office. FedEx Office and Print Centers: Provides services such as copying,

printing, Internet access and FedEx shipping.

FedEx Ship Centers: Provides a central location for FedEx customers to deposit their packages for shipping, also offering a self service photocopy and fax machine, office products for packing and shipping, boxes and packaging services. Formerly, these locations were called FedEx World Service Centers.

Both FedEx Office and Print Centers and Ship Centers now offer Hold at Locations for FedEx Ground & FedEx Expressshipments for easy pick up. Transfer to Office/Ship centers takes 1 to 2 business days (example: calling the customer service line one day prior to pick up. This ensures package is put with proper route of courier that services that area).

CHAPTER -3

COUNTRY HEADQUARTERS AND COUNTRIES FROM WHERE THEY OPERATE

FedEx Express is a cargo airline based in Memphis, Tennessee, United States. It is the world's largest airline in terms of freight tons flown and the world's fourth largest in terms of fleet size. It is a subsidiary of FedEx Corporation, delivering packages and freight to more than 375 destinations in nearly every country each day.

Its headquarters are in Memphis with its global "SuperHub" located at Memphis International Airport. In the United States, FedEx Express has a national hub at Indianapolis International Airport. Regional hubs are located at Ted Stevens Anchorage International Airport, Oakland International Airport, Newark Liberty International Airport, Fort Worth Alliance Airport and Miami International Airport. International regional hubs are located at Paris-Charles de Gaulle Airport, Guangzhou Baiyun International Airport, Toronto Pearson International Airport and Cologne Bonn Airport.

FedEx Express has approximately 57,000 drop-off locations (including FedEx Office centers), 688 aircraft and approximately 50,000 vehicles and trailers in its integrated global network. FedEx Express offers a range of shipping services for delivery of packages and freight. Overnight and deferred package services are backed by money-back guarantees and extend to nearly the entire United States population. FedEx Express offers three United

States package delivery services: FedEx First Overnight, FedEx Priority Overnight and FedEx Standard Overnight. FedEx SameDay service is available for urgent shipments up to 70 pounds to virtually any Unites States destination. FedEx Express also offers United States express overnight and deferred freight services backed by money-back guarantees to handle the needs of the time-definite freight market. International express and deferred package delivery with a money-back guarantee is available to more than 220 countries and territories, with a variety of time-definite services to meet distinct customer needs. FedEx Express also offers domestic pickup-and-delivery services within certain non United States countries, including the United Kingdom, Canada, China, India and Mexico. FedEx Express also offers comprehensive international express and deferred freight services, backed by a money-back guarantee, real-time tracking and advanced customs clearance.

Asia Pacific region

Headquarters: Hong Kong, China

Stations: Located in all major cities of Asia

Main Hubs: China, Philippines, Subic bay.

Countries and territories served: More than 30

Airports served directly: More than 20.

With more than 14,000 employees, FedEx currently serves more than 30 countries and territories in the Asia Pacific market through its innovative FedEx Asia One network, which now operates close to 400 flights per week through its main hub in Guangzhou, China. launched in 1995. This launch included trans-Pacific flights and the creation of an Asia Pacific hub in Subic Bay, which provided overnight intra-Asian delivery among major Asian business centers.

Europe, Middle East, Indian Subcontinent and Africa:

Headquarters: Brussels, Belgium

Main hubs: Paris, France; Stanstead; United Kingdom; Cologne, Germany; Dubai, United Arab Emirates; Mumbai and Delhi; India

Airports served daily: 45

Serving Europe for more than 25 years, the European FedEx network offers next-day service to hundreds of cities in Europe with late collections and early deliveries, linking hundreds of European cities, and covering approximately 75,000 post codes.  Over the last five years, FedEx has made a number of significant strategic investments to its network and provides customers a competitive advantage via unmatched access and connections to next-day service to the U.S. and Asia Pacific. FedEx has introduced an International Economy Service from 27 of the EMEA countries to more than 215 countries and territories worldwide, an East Coast Special Service allowing later drop off times in Europe with next day delivery to the US East Coast and a direct roundtrip flight between Paris and Hong Kong allowing customers in many European markets to benefit from next day service from Asia.

The FedEx Express hub at Roissy-Charles De Gaulle airport in Paris, France, is the largest FedEx hub outside the US and the primary European gateway for packages sent by FedEx customers throughout the world. The airport boasts a multi-modal logistics center with good highway linkages. To minimize its impact on the environment, more than 230 Liquefied Petroleum Gas-powered and electric-powered ground support vehicles are housed at the Roissy-CDG hub – accounting for almost 60% of its ground fleet.

In 2010 FedEx Express in Germany relocated its Central & Eastern European

hub from Frankfurt to Cologne. The new hub is a vital link in the FedEx worldwide network, acting as a central gateway for packages arriving by ground or air from Central and Eastern Europe and providing fast connectivity within Europe, to the U.S. and Asia. The state-of-the-art, environmentally-friendly facility features a 1.4 megawatt solar power system with the capacity to produce approximately 800,000 kilowatt hours of electricity per year – equal to the power required for roughly 230 three-person households for an entire year.

Latin America :

Headquarters: Miami, FloridaMain Hub: Miami, FloridaCountries and Territories Served: 50Airports Served Directly: More than 20

With more than 3,400 employees serving more than 50 countries and territories across nine million square miles, FedEx has become one of the largest express transportation companies in Latin America and the Caribbean since it started operations there in 1989. In 2004, we launched FedEx Transborder Distribution, which provided the high-volume Mexican export community an alternative, cost-effective shipping solution for deferred transportation to the United States. 

In August 2008, FedEx launched FedEx Express Nacional, a domestic next-business-day service that provides high-quality, reliable and convenient express shipping solutions across Mexico. The service features delivery to any address in Mexico, online tracking and tracing, and is backed by the FedEx money-back guarantee. 

FedEx Express LAC has acted as a pillar of growth for the region and continues its commitment through the FedEx PyMEx program, the first initiative to join with small and medium exporters by offering innovative ways to access the global marketplace.

Through a network of more than 100 flights per week originating in Latin America, 50 flights per day throughout the Caribbean and a fleet of more than 1,000 delivery vehicles, FedEx connects Latin America to the world.

North America FedEx Express President, Chief Executive Officer: David J. Bronczek FedEx Express President, Canada Region:  Lisa LissonFedEx Ground President, Chief Executive Officer: David F. RebholzFedEx Office President, Chief Executive Officer: Brian PhilipsFedEx Freight President, Chief Executive Officer: William J. LogueHeadquarters: Memphis, Tennessee; Pittsburgh, Pennsylvania; Dallas, TexasTeam Members: More than 285,000Main Hubs: Memphis, Tennessee; Oakland, California; Newark, New Jersey; Fort Worth, Texas; Indianapolis, Indiana; Anchorage, Alaska 

FedEx was founded in 1973 in Memphis, Tennessee, birthing a new industry by delivering urgent packages overnight. From our humble beginnings with 14 small aircraft serving 25 cities, FedEx has grown to become the world's largest express transportation company, providing fast and reliable delivery to nearly every address in North America and connecting any two major North American cities within 24 hours.

With its ever-expanding range of services, FedEx gave North American businesses previously unheard of access to each other and the world at large. From FedEx Express, which provides global connectivity from the

United States and Canada to more than 220 countries and territories worldwide, to FedEx Ground's specialty of cost-effective, small package shipping, FedEx has the shipping solution in North America for just about any business or consumer. Through FedEx Office, a leading provider of document solutions and business services, the company offers access to copying and digital printing, professional finishing, document creation, direct mail, signs and graphics, computer rental, free Wi-Fi access and a full range of FedEx day-definite ground shipping and time-definite global express shipping services. In addition, the company offers award-winning FedEx Office® Print Online and FedEx Office® Print & Go online and mobile printing solutions for business and personal printing, at home, at the office or on the go. Products, services and hours vary by location.

FedEx has also offered longstanding service to Canada. In 1981, FedEx Express inaugurated its international delivery service with flights from the United States to Canada, becoming the first Canadian courier to use dedicated airlift. FedEx Ground service was launched in Canada in 2000 to provide customers with reliable day-definite service, both within Canada and to the United States. Today, FedEx's Canadian customers can access goods, services and information anywhere in the world.

In 2008, FedEx Express Canada joined forces with the Canada Post Corporation in the development of Priority™ Worldwide, a new international express service that will be sold in Canada through Canada Post’s retail and commercial networks and delivered worldwide through the extensive FedEx international delivery network.

CHAPTER -4

MAJOR COMPETITORS

Other than FedEx Express, other courier companies have also provided international airfreight services. These include UPS Airlines, TNT Airlines, Aramex and DHL Aviation. According to freight Philippines companies, FedEx Express' main competitor in the airfreight market is DHL. DHL Aviation is a division of DHL Express (owned by Deutsche Post World Net) responsible for providing air transport capacity. It is not a (single) airline but refers to several airlines owned, co-owned or chartered by DHL Express. The combined fleet consists of over 350 aircraft. One market that FedEx Express and DHL competed is the overnight delivery service.

Although DHL Express was one of the only truly international delivery companies, and the only one offering overnight service, FedEx Express took these over. DHL turned their attention to the overnight market in the US, following the success of FedEx, and opened a major distribution hub in Cincinnati in 1983. However, DHL was never able to overcome FedEx's head start, capturing only 6% of the domestic market.

UPS is also considered as one of the largest known international courier company in the world, having known to deliver more than 15 million packages a day to 6.1 million customers in more than 200 countries and territories around the world. With these, UPS is a direct competitor along with other international and domestic courier companies. Major domestic (United States) competitors include United States Postal Service (USPS).Competing market In addition to domestic competition such as USPS , FedEx competes with a variety of international operators, including Canada Post, TNT N.V., Deutsche Post (owner of DHL), Royal Mail, Japan Post, India Post and many other regional carriers, national postal services and air cargo handlers.

Aramex:

Aramex was founded by Fadi Ghandour in 1982, where its name was acronym of "ARab AMerican EXpress" before its brand name Aramex.

In 1982 Mr. Ghandour began operations as an express wholesaler to North American express delivery companies such as FedEx, Purolator, Burlington Northern,Emery, and Airborne Express with DHL as its main competitor in the region. In 1990, Aramex co-founded the Overseas Express Carriers (OEC) network, along with Airborne Express, an alliance of independent global express companies that functioned as a worldwide delivery network for its members to compete with larger companies.

In 1997, Aramex was listed on the NASDAQ and was the first international company in the region to do so. In 2002, as Aramex was celebrating its 20th anniversary, it was approached by Abraaj Capital and consequently Aramex decided to delist from the NASDAQ. The Company moved to private ownershipafter being acquired in a leveraged management buyout by Aramex CEO and Co-Founder Fadi Ghandour.

In 2003, DHL acquired Airborne Express, Aramex’s main United States partner. This resulted in Airborne Express exiting the Airborne Alliance. In the same year, Aramex took over the alliance and co-founded the Global Distribution Alliance (GDA), a global alliance of 40 express companies with combined revenues of $7.5 billion. Aramex is chairing the alliance which uses a shipment management system developed by the company.

After deciding to list on the Dubai stock market, the company's initial public offering made available a total of about 550 million shares to the public at a price of Dh1 per share.

As part of its expansion plans, Aramex concluded a series of acquisitions, including Priority Airfreight, InfoFort, Freight Professionals and TwoWay-Vanguard.

DHL:

DHL Express is a division of the German logistics company Deutsche Post providing international express mail services. DHL is a world market leader in sea and air mail.

Originally founded in 1969 to deliver documents between San Francisco and Honolulu, the company expanded its service throughout the world by the late 1970s. The company was primarily interested in offshore and inter-continental deliveries, but the success of FedEx prompted their own intra-US expansion starting in 1983. DHL aggressively expanded to countries that could not be served by any other delivery service, including the Eastern Bloc, Vietnam and China.

In 1998, Deutsche Post began to acquire shares in DHL. It finally reached majority ownership in 2001, and completed the purchase in 2002. Deutsche Post then effectively absorbed DHL into its Express division, while expanding the use of the DHL brand to other Deutsche Post divisions, business units and subsidiaries. Today, DHL Express shares its well-known DHL brand with other Deutsche Post business units, such as DHL Global Forwarding and DHL Supply Chain.

UPS:

United Parcel Services (UPS) is headquartered in Sandy Springs, Georgia, United States. UPS delivers more than 15 million packages a day to

6.1 million customers in more than 220 countries and territories around the world.

UPS is well known for its brown trucks, internally known as package cars (hence the company nickname "The Big Brown Machine"). UPS also operates its own airline

UPS's primary business is the time-definite delivery of packages and documents worldwide. In recent years, UPS has extended their service portfolio to include less than truckload transportation (primarily in the U.S.) and supply chain services. UPS reports their operations in three segments: U.S. Domestic Package operations, International Package operations, and Supply Chain & Freight operations.

TNT:

TNT N.V., more commonly known as TNT, is an international express and mail delivery services company with headquarters in Hoofddorp, Netherlands. In the Netherlands, TNT operates the national postal service under the name TNT Post. The group also offers postal services in eight other European countries, including the UK, Germany, Italy and Belgium. TNT's mail division recorded sales of about €4.2 billion in 2009.

The company's express delivery services unit, known as TNT Express, has fully owned operations in 65 countries and delivers documents, parcels and

pieces of freight to over 200 countries. TNT's express division recorded sales of about €6.0 billion in 2009.

TNT sold its logistics unit in 2006 to focus on network activities, mail and express delivery services. TNT's networks are concentrated in Europe and Asia, but the group is expanding its operations worldwide, including in the Middle East and South America. In the recent years, it acquired several road freightcompanies in China, India and Brazil.

TNT employs 155,000 people. Over 2009, TNT reported €10.4 billion in revenues and an operating income of €648 million.

Operating units:

TNT Express - operates the largest express network by air and road in Europe, as well as TNT Airways, an international cargo airline. TNT Express employs more than 78,000 people, flies 48 aircraft, runs about 26,000 road vehicles, and has a worldwide network of more than 2,400 depots and hubs.

TNT Post - A postal operator all over in Europe Koninklijke TNT Post BV - collects, sorts and distributes mail in the

Netherlands European Mail Networks - collects, sorts and distributes mail in 8

European countries

Cendris - Value Added Mailservices like customer information, printing, callcenter services

Spring (Company) - Joint-venture with Royal Mail and Singapore Post in cross-border mail.

TNT Business Solutions - offers a range of Business Process Outsourcing services that includes information management, records management, facilities management and supplier management.

CHAPTER -5

MARKET ENVIRONMENT OF THE BRAND

Express courier services differ from ordinary mail delivery services , provided by the postal system , as it offers various value added services.It comprises of documents, correspondence, business communication, bills, tenders, brochures. Non documents like books, CD’s, electronic items, gifts, spare parts etc. Value added services offered are door to door delivery, track and trace facility, proof of delivery, 24*7 helpline, guaranteed time bound delivery.

This market also constitutes of large number of unorganized players. Inter-city deliveries comprises of bulk of domestic players. This market is highly unregulated with low entry barriers. Domestic players are constantly striving to match the standards of international carriers.

The drivers for growth of this industry are as follows:

a) Strong economic growthb) Online shoppingc) Development in infrastructured) Inclination towards services provided by private players.

The industry is divided into large networked couriers capable of nationwide and international delivery, and smaller local services that transport packages within a metropolitan area. The courier segment of the industry is highly concentrated and accounts for most of the industry's revenue; United Parcel Service (UPS) and Federal Express (FedEx) alone generate more than 80 percent of the revenue. The local segment, which is much smaller, ishighly fragmented.

The global express delivery industry generates annual revenue of approximately $180 billion. DHL (Germany) and TNT (The Netherlands) are the largest express delivery companies based outside the US.

COMPETITIVE LANDSCAPE

Demand is driven by business transactions and online consumer spending. The profitability of individual companies depends on price, reliability, quality, and services. Large companies compete by offering a wide range of services. Small companies compete through specialized customer service. The industry is labor intensive: average revenue per employee is about $130,000.

Barriers to entry into the industry vary. National and international delivery services require heavy capital investments in vehicles, material handling equipment, and other technology. Conversely, barriers are low for local market service providers, which rely primarily on labor. On one extreme, anyone with a vehicle and communication equipment such as a mobile

phone can operate a business. Participants such as these do exist and service niches in the market. However, they suffer from a lack of bargaining power and are usually price takers. At the other end of the scale, large nationwide and international operations require significant sums of capital to setup. The requirement of large amount of capital is seen a barrier to entry in this segment.

Courier services in India:

Indian courier industry had its start some 15-20 years ago. The courier industry was initially limited to the four metros – New Delhi, Mumbai, Kolkata, Chennai and to some extent to Bangalore. The reason was the airport connection these metros were. But, the changing economy and technical advancement seen on a daily basis, the industry has grown and extended faster to several cities and even rural areas. And it is still growing.

A courier company anywhere in the world has its primary virtue is its efficiency to render services. The better the quality of service, the more the satisfied customers, better the chances of survival. The industry is booming and market is cut-throat competitive. The advancement of technology and internet has things slight easier and more competitive as well.Courier services in India can be segregated in few categories. Basically, it begins with intra-city services which are about speedy delivery of mails and goods within the city. Broadening the services, inter-city services are covered. Normally this is termed as surface cargo services where short distance and bulk loads are handled. Surface mode service is performed through two ways: firstly, on road (by bus or vehicle) and secondly on track (by train) services. The products are normally delivered through door to door.

Courier companies work in tandem with the foremost airlines and in sync with their well tuned, well associated set of connections the timely deliverance and protected service is guaranteed. Few other variant of services could be express services, ocean freight, industry solutions, logistic solutions, shipping tools. These particular services are individual of a company's area of specialization and diversification.

The major players are:

1. UPS2. DHL3. TNT 4. Aramex

Some other players in India include Blue dart, DTDC, First flight courier services.

CHAPTER -6

BRAND PORTFOLIO AND STRATEGIES.

The FedEx marketing plan is one of the most comprehensive and effective strategies in the express parcel delivery industry. "Central to FedEx's global marketing strategy is a rigid adherence to the brand identity: Speed, reliability and connectivity are at the heart of the brand's identity and the same message is religiously conveyed everywhere." In an ever-changing global marketplace, FedEx brand marketing tactics kept the company on the competitive edge with dynamic and innovative solutions. Even with the economic turmoil, FedEx is profitable.

FedEx product lines.FedEx has seven product lines (FedEx Express, FedEx Ground, FedEx Freight, FedEx Custom Critical, FedEx Trade Networks, FedEx Services® Kinko's) and operates under a single management umbrella. 

1. FedEx ExpressThis division is the world's largest transportation company, operating in 214 countries. Federal Express Corporation owns its own fleet of 661 aircraft.

2. FedEx GroundThis division is second to the United States Postal Service (USPS) in overnight small package shipment.

3. FedEx Custom CriticalThis division is the world's largest door-to-door urgent shipment company

operating in the United States, Canada, and Europe.

4. FedEx Trade NetworksThis division is a freight forwarding and customs brokerage house aimed to facilitate international trade.

5. FedEx FreightThis division is the largest US regional less-than-truck load (LTL) freightliners.

6. FedEx ServicesThis division is a supply chain management and technology company.

7. Kinko'sThis subsidiary is a business service center with more than 1200 retail stores that provides copy, fax, publishing, and back-office support. Federal Express purchased Kinko's in 2004 for 2.4 billion dollars. FedEx spent more than 700,000 hours in cross training Kinko's employees on how to handle FedEx packages.

FedEx Express (Orange "Ex"): The original overnight courier services, providing next day air service within the United States and time-definite international service. FedEx Express operates the second largest civil aircraft fleet in the world (after Delta Air Lines) and the largest fleet of wide bodied civil aircraft; it also carries more freight than any other airline. Caribbean Transport Services: Until 2008, a part of FedEx Freight.

Provides airfreight forwarding services between the US mainland, Puerto Rico, the Dominican Republic, and other Caribbean  islands.

FedEx Ground (Green "Ex"): Guaranteed day-definite delivery within Canada and the United States at a cost savings as compared to time-

definite FedEx Express. Uses a large fleet of trucks which are owned by the independent owner/operators and drivers are independent contractors who control individual delivery routes and territories. Formerly Roadway Package System (RPS). FedEx Home Delivery: A division of FedEx Ground, specializing in

residential delivery Tuesday through Saturday and offers delivery options to provide more flexibility for residential recipients. The logo includes a drawing of a dog carrying a package . FedEx Home Delivery only operates in the United States. To make up the difference, FedEx Ground in Canada performs the business deliveries and residential deliveries.

FedEx SmartPost (Grey "Ex"): Consolidates parcels from merchants such as e-commerce and catalog companies and uses the United States Postal Service for the final delivery. Formerly the independent company Parcel Direct until FedEx acquired them for $120M in 2004.

FedEx Freight (Red "Ex"): Less than truckload (LTL) and other freight services. The second largest LTL carrier in the United States, with $4.5 billion in revenue for 2008. FedEx Freight, Inc: Formerly American Freightways, Viking Freight,

and Watkins Motor Lines. FedEx Freight Canada: Formerly Watkins Canada Express. FedEx Custom Critical: Delivers urgent, valuable, or hazardous

items using trucks and chartered aircraft. Freight not accepted for transport includes perishable food, alcohol, livestock, household goods, hazardous waste and money. Drivers are independent contractors who own their vehicles. Service in Mexico uses interline carriers. FormerlyRoberts Cartage or Roberts Express.

FedEx Trade Networks (Yellow "Ex"): Provides services relating to customs, insurance, and transportation advice. Formerly C.J. Tower & Sons, then Tower Group International.

FedEx Supply Chain Services (Grey "Ex"): Provides logistics services including Critical Inventory Logistics, Transportation Management Services, Fulfillment Services, etc. Formerly Roadway Logistics System, then Caliber Logistics.

FedEx Corporate Services (Grey "Ex"): Provides global marketing, planning and information technology (IT) services for the other FedEx operating companies.

FedEx TechConnect: Offering a customer service toll-free telephone line for customer questions. It is operated by an automated operator then will prompt the user to a live agent for uses of tracking, claims, scheduling pick-ups (Express, Ground, Same Day, Custom Critical, Freight Express, and Freight LTL), compliments and complaints, locations (both staffed counter locations and drop-boxes), ordering supplies, setting up FedEx accounts, billing etc. Formerly FCIS or FedEx Customer Information Services.

FedEx Office (formerly FedEx Kinko's) (Blue "Ex"): The retail arm of the corporation, offers copying and digital printing, professional finishing, document creation, Internet access, computer rentals, signs and graphics, direct mail, Web-based printing, and FedEx shipping. Formerly an independent company, known as Kinko's until it was acquired by FedEx in 2004 and rebranded to FedEx Kinko's. In June 2008 the company was finally rebranded as FedEx Office. FedEx Office and Print Centers: Provides services such as copying,

printing, Internet access and FedEx shipping. FedEx Ship Centers: Provides a central location for FedEx customers

to deposit their packages for shipping, also offering a self service photocopy and fax machine, office products for packing and shipping, boxes and packaging services. Formerly, these locations were called FedEx World Service Centers.

Both FedEx Office and Print Centers and Ship Centers now offer Hold at Locations for FedEx Ground & FedEx Expressshipments for easy pick up. Transfer to Office/Ship centers takes 1 to 2 business days (example: calling the customer service line one day prior to pick up. This ensures package is put with proper route of courier that services that area).

FedEx Marketing StrategyEach product line exposes the company to a variety of risks and opens the door to a number of opportunities. The FedEx product lines are diverse; therefore, only the corporate marketing plan and strategy are analyzed. The FedEx marketing department is in charge of coordinating marketing and brand recognition among Federal Express subsidiaries and product lines. The marketing efforts include networking, technology support, and data management.

Product. FedEx products are cross branded and interconnected for delivering single-point easy access shipping for customers. Users of one product can cross-over to another product line and use the same account information from point of creation to final delivery. Essentially, FedEx policy is to acquire businesses and develop product lines that can increase the company's revenues and keeping FedEx fleet full and moving at all times.

Place.FedEx serves 214 countries and every major city in the United States, Canada, and the European Union. In line with the company's policies, in 2003, FedEx purchased Kinko's Copy Center. Acquisition of Kinko's brought unparallel abilities that previous merger acquisitions did not offer for FedEx.

1200 store retail chain was popular among the corporate world and consumers who needed to overnight business plans, résumés, reports, and any valuable document. Federal Express Corporation uses Kinko's stores as a shipping outlet kiosk.

Promotion. Federal Express has a clear promotional vision: increase shipping. Federal Express Corporation has set a number of partnerships in place with distribution centers, supply chain management firms, government agencies, and other parcel delivery companies. Federal Express and the United States Postal Service signed two contracts, each for a term of seven years, known as Global Express Guaranteed (GXG); under the terms of the contract FedEx will deliver all express packages for the USPS. Additionally, in the past 10 years, Federal Express created partnership agreements with a number of giant merchandizing companies like Google, eBay, Amazon, Overstock.com, and Home Shopping Network to reduce the cost of shipping and increase the volume of parcel deliveries.

Price. Pricing structure is complicated because it is affected by number of factors: (1) cost of fuel and energy; (2) tariffs, duties, and taxes; (3) rentals, leases, and utilities; (4) fluctuating labor costs; (5) foreign subsidies; and (6) competition pricing. The U.S. government does not offer any subsidies for the transportation sector except for the USPS; however, the European Union subsidizes the entire transit and transport industry for local companies. FedEx does not receive any government subsidies like its competitors: USPS, DHL, and TNT.

CHAPTER -7

STRATEGY ANALYSIS

Industry Life Cycle

FedEx offers a wide range of transportation services and they accommodate to the widest range of shipments. FedEx is in the express delivery services industry, which is an oligopolistic industry with few established competitors.

This industry can be classified as being in the mature stage of the industry life cycle. The few competitors in this industry, such as UPS, DHL and USPS, in addition to FedEx, each have their own brand loyal customers and low cost operations that create significant barriers to entry into this industry.

As for the intensity of competition, in mature industries "companies tend to recognize their interdependence and try to avoid price wars." (Hill Jones, p.57) For mature industries a stable demand reduces the threat of intense rivalry between the established companies. However, unpredictable economic activity can cause a "trickle down" effect, such as a slump in an economy causing a decrease through-out industry demand, and as companies fight to make money a price war begins among companies in an industry, therefore, price leadership can be broken down by unpredictable future events.

Porter’s Five Forces

Applying Porter’s five forces model to the industry is not an easy task provided that FedEx Corporation provides various shipping services. For simplicity, we examined and applied the Porter’s five forces model to the ground and air-shipping sector. In FedEx, these two sectors are represented by FedEx Express and FedEx Ground. FedEx Express is the world's largest express transportation company. FedEx Ground, on the other hand, is North America's second largest provider of small-package ground delivery service, following the lead of UPS. Other segments of shipping service industry are for example e-commerce and supply chain management services, which are not included in the Porter’s five forces analysis.

1. Risk of new entry by potential competitorsThe barriers to entry are very high. One of the reasons that there is a high entry barrier is the high fixed cost associated with establishing the international transportation network. This includes hubs, ground transportation vehicles, air fleet, etc. Additionally, existing companies can take advantage of the absolute cost advantage achieved by large volume of shipments and economies of scale.

2. Extent of rivalry between established firmsEstablished players in industry complete rigorously for a market share, as demonstrated by the constant battle between FedEx and UPS, the company who responses first to the constantly changing environment wins. Established companies have to strive for continuous improvement in quality, lowering price, and innovation. There is very low switching cost for consumers in this industry making rivalry even more intense. In addition, intense rivalry is also due to the fact that maintaining the infrastructure of an express delivery company presents an exit barrier due to high fixed costs.

3. Bargaining power of buyersThe bargaining power of large buyers in shipping service industry is high. Cost associated with switching from one shipping service to another is very low. Therefore, buyers can turn to a shipping provider that offer faster service, lower price, or service innovation with ease. This is especially true for large corporations, like IBM, which ships in large volumes and can bargain quantity discounts.

4. Bargaining power of suppliersThe supplier power within this industry is fairly low. Large shipping service provider can affect prices of supplies, like packaging materials. This is

Supplier’s Power

LOW

Potential Competitors

LOW to MODERATE

Substitute Products

LOW- Shipping - commodity

Buyers’ PowerHIGH

large buyerslow switching cost

Existing Rivals

HIGH- FedEx, UPS, DHL

because they buy in large quantities and can turn to different suppliers easily.

5. Threat of substitute productsThere are not many substitutes to shipping. In this day and age where many businesses have strong online presence and a small physical presence, it would be difficult to find a substitute in delivering their product. Shipping services are very much similar to a commodity, in that it is not easily replaced with another service or even a similar service.

Mackenzie’s 7 S model

1. STRATEGY The unique FedEx operating strategy works seamlessly - and simultaneously - on three levels. 

Compete collectively:-by standing as one brand worldwide and speaking with one voice. Operate independently:-by focusing on our independent networks to meet distinctcustomer needs.

 Manage collaboratively:-by working together to sustain loyal relationships with our workforce, customers and investors.

2. SHARED VALUES 

a) People: We value our people and promote diversity in our workplace and in our thinking.

b) Service:Our absolutely, positively spirit puts our customers at the heart of everything we do.

c) Innovation:We invent and inspire the services and technologies that improve the way we work and live.

d) Integrity:We manage our operations, finances and services with honesty, efficiency andreliability.

e) Responsibility:We champion safe and healthy environments for the communities in which welive and work.

f) Loyalty:We earn the respect and confidence of our FedEx people, customers and investorsevery day, in everything we do

3. STAFFFedEx provides a safe, diverse and rewarding environment where their people have opportunitiesto grow and succeed. 280,000 employees worldwide serve more than 220 countries and territories across the globe.FedEx commitment to the staff: Culture of services Recognition programs 

Everyday heroes Culture of safety

4. STRUCTURE FedEx Express, a wholly owned company of FedEx, is divided into five global regions: Asia Pacific CanadaEurope, Middle East, Indian Subcontinent and Africa Latin American and carribeanUnited States

5. STYLELeader: Frederick W. Smith, Chairman, President and Chief Executive Officer According to FedEx, its best leaders share nine personal attributes - which the company defines with remarkable specificity.

Charisma-Instills faith, respect, and trust. Has a special gift of seeing what others need to consider. Conveys a strong sense of mission.

Individual consideration-Coaches, advises, and teaches people who need it.Actively listens and gives indications of listening. Gives newcomers a lot of help.

Intellectual stimulation-Gets others to use reasoning and evidence, rather than unsupportedopinion. Enables others to think about old problems in new ways.Communicates in

a way thatforces others to rethink ideas that they had never questioned before.

Courage-Willing to stand up for ideas even if they are unpopular. Does not give in to pressureor to others' opinions in order to avoid confrontation. Will do what's right for the company andfor employees even if it causes personal hardship.

Dependability-Follows through and keeps commitments. Takes responsibility for actions andaccepts responsibility for mistakes. Works well independently of the boss.

Flexibility-Functions effectively in changing environments. When a lot of issues hit at once,handles more than one problem at a time. Changes course when the situation warrants it.

Integrity-Does what is morally and ethically right.Does not abuse management privileges.Is aconsistent role model.

Judgment-Reaches sound and objective evaluations of alternative courses of action throughlogic, analysis, and comparison. Puts facts together rationally and realistically.Uses pastexperience and information to bring perspective to present decisions.

Respect for others-Honors and does not belittle the opinions or work of other people,regardless of their status or position.

 6. SYSTEMS

FedEx use various management information and operational systems.ZeroCode- system to track maintenance records and performance statistics for fleets of FedEX.

Website fedex.com-Shipments are processed online, using an Internet connection.SuperTracker-handheld scanning device& On-finger ring bar-code scanners- Provides package information.

DADS- digitally assisted dispatch system that allows the dispatchers to send text messages back and forthto the couriers.

DCI System- Improves FedEx's invoicing process by reducing keystrokes, eliminating paper handling,and increasing workers' productivity.

FedEx Billing Online- Provides billing solutions

7. SKILLSFedEx’s existing competencies include:Brand equity - The FedEx brand name is synonymous with express package delivery. Strong infrastructure –A worldwide network of hubs, airplanes and trucks. Afierce commitment to innovation and technology. Customer responsiveness

CHAPTER-8

COSTING AND PRICING

Costing and pricing

Fed Ex offers flexible options to obtain rates on shipments, depending on the needs.

FedEx’s dominant product technology adheres to all businesses in the transportation industry in which FedEx operates.

Information system :Internet and the required instruments(Fixed Cost)

Materials management [Infrastructure i.e. Transportation vehicles (Planes , trucks) , buildings] (Fixed Cost)

Human resources

CHAPTER-9

Consumer perception

Some of the words that come to customers mind when asked about Fed ex are:

1. Convenient2. Reliable3. Trustworthy4. Safety5. Customer friendly6. Quick delivery7. Wide area coverage

The FedEx brand name is synonymous with express package delivery. When a company or individual needs to send a package in a quick and timely manner, they say “FedEx it.” FedEx has positioned itself in the minds of its customers that they (FedEx) are the company you turn too when you need it there fast. A quote from allaboutbranding.com says it all, “FedEx is a great brand”.

Over the years the image of FedEx of being the most trusted brand in express delivery companies has only strengthened.

In 2010 FedEx was ranked no. 1 in customer satisfaction in express delivery companies for 13th consecutive year. It was also named trusted brand in Asia for six consecutive years. Customer experience is the superior way to compete

FedEx has created an innovative culture and has been recognized for this with national and international awards. But more important than the accolades is the value delivered to customers. When FedEx asked its customers what they wanted, they said they want FedEx to help them grow, to collaborate with them, and to expand their markets. FedEx innovations help customers grow their businesses. This is true customer-driven innovation. When your customers grow, you grow. That’s the bottom line and FedEx knows this to be true. FedEx realizes that customer touch points abound and is committed to making every FedEx experience outstanding. This is the mantra of every FedEx employee. Seeing customers as active co-innovators, FedEx captures qualitative customer insights at the start of every new service development effort. By involving the customer early, it is able to unearth customer needs early and devise strategies to address them.

Targeting Customer Needs

FedEx understands that different customers have different needs. Therefore FedEx has divided itself into six different segments; FedEx Express, FedEx Ground, FedEx Freight, FedEx Custom Critical, FedEx Trade Networks, and FedEx Supply Chain Services. Each service is targeted toward a specific segment of the market, according to the specific needs of different customers. By specifically targeting customers by their needs, FedEx hopes to serve the immediate and psychological need for those who need a guarantee on time and delivery. Customers may require different services at

different times, falling into more than one category. A company may need a document express delivered overnight a few states away, and then need freight something the next day. FedEx understands that there are a variety of needs their customers could have, and have segmented the market accordingly. That way, no matter what the customer may need to do, FedEx will be able to serve them.

Differentiation of Quality

FedEx is able to meet the needs of all these segments. They have spent an extraordinary amount of capitol developing their infrastructure, just so they can make the best promises to their customers. FedEx transports more than 3 million items to over 200 countries each day. Within each business unit are specific functional units that perform particular functions. The main functional units are logistics and operations for its transportation system. These units assure the coordination and smooth flow of FedEx’s deliveries. The end result is a high level of quality service. Their service includes customer responsiveness and innovations such as; its aircraft fleet, its hubs and package handling systems, package tracking, customer support functions, and logistics support. Not only does this help FedEx follow through with their promises, but in some ways that are superior to that of the competition.

During one of his two combat tours in Vietnam, Federal Express CEO Frederick Smith got a quick lesson in survival from a crusty Marine sergeant. “Lieutenant,” the sergeant told Smith, “there’s only three things you gotta remember: shoot, move, and communicate.”(Fortune, Nov. 1997)

Some thirty plus years later, and at the helm of one the shipping industry’s largest competitors, Smith has utilized that same tactical advice in the business world. His maneuvering of FedEx has incorporated an aggressive shooting strategy as the company has emerged into numerous shipping regions around the world such as Asia, and furthermore, FedEx continuously has been pursuing and developing a solid foundation and infrastructure for the company and its future. One example is the addition of a new hub in the Philippines, at Subic Bay. His movement has guided the company to innovate its products and develop with the needs of its customers. Finally, the use of communication has emerged as one of the company’s greatest competencies, not only with customers, but internally as well. “FedEx has always been a technology trailblazer, and the success of fedex.com is testament to that.” The company was one of the first to harness the power of the Internet, launching its Web site in 1994 with a bold new package tracking application one of the first true corporate Web services. Soon after, FedEx became the first transportation company with Web site features that allowed customers to generate their own unique bar-coded shipping labels and request couriers to pick up shipments. FedEx Ground is taking advantage of the wireless LAN technology by expediting the movement of shipping information from delivery workers' terminals to a central database.

It is with these tactics along with FedEx strong competencies and worldwide infrastructure, which will be discussed in further detail hereafter, that will foster the companies success and eventual competitive advantage in years to come.

FedEx provides many benefits to its customers. The shipping industry, however, is one of extreme competition. Not only are customers confronted with the choice of carrier, they are also confronted with a choice of means of shipment. It is further complex, as the pricing strategy of the sector has companies, for instance, who lead cost in one form of shipment such as ground and follow in another form of shipment such as international delivery.

FedEx foresaw the importance of differentiation early on, as did most of the sector players. FedEx realized that it was in the information business. Customers are not only concerned with the product getting from point A to B, but further, are interested in the knowledge of where the cargo originated from, its present whereabouts, destination, estimated time of arrival, price and cost of shipment. All these elements are just as important to some businesses and consumers as receiving a safe delivery. To support this need, and differentiate itself from competitors, FedEx created state-of-the-art technology for customers to track and validate shipments. Shipments are virtually traceable from their origin to their destination all with the convenience of the personal computer. Additionally, FedEx has forecasted the important strategic trend of a continuously global shipping market. The differentiation of products is a continuous process in this competitive industry as innovations are often quickly imitated. FedEx strives to develop innovations and listens to customers wants and needs.

Further meeting the needs of customers worldwide, the company has invested extensively in global infrastructure. Fedex connects some of the most important areas of the world that make up 90% of the world’s gross domestic product, some of the new hubs were built in the Philippines at Subic bay and in Europe at Charles de Gaulle, in Paris. Particular emphasis has been placed on gaining a strong presence in the spawning Asian market. Countries such as China, which had been predominantly exporting countries, are now large importers of goods from all parts of the World. Since 1984 they have expanded service to over 300 cities within China.(Business Source Premier).

It is with this keen sense of “the big picture” that FedEx finds itself without a current sustained competitive advantage within the shipping industry. The Fedex return-on-equity percentage of 10% falls far below the industry average of nearly 20%. The company has invested heavily in

aircraft and development of strategic worldwide airline hubs. In 1997, FedEx foresaw the opportunity of Internet commerce and its implications on the shipping industry. It is this same intuition that we at the San Jose Consulting Firm believe FedEx is positioning themselves as the future leader, with sustained competitive advantage, in the international market of the shipping industry.

The extensive infrastructure and resources FedEx has compiled are quite impressive. The company has added several optimum hubs, the Euro One Hub in Paris, the Asia One Hub at Subic Bay, and the new Iraq hub to increase the reach and accessibility in blossoming new economies and manufacturing locations. This infrastructure, coupled with FedEx’s continuous innovations and fulfillment of customers needs, is what will create continued success, and eventual sector competitive advantage in the years to come.

CHAPTER -10

BRAND IMPROVISATIONS

Brand Improvisation is when a company and its employees are asked to think quickly on their feet and react to a customer’s need, a complex complaint or even to a newly introduced product. As an employee, it is our responsibility to act in the company’s best interest by upholding the values and morals set forth by the company culture and by the senior leadership team.

Targeting Customer Needs :FedEx understands that different customers have different needs. Therefore FedEx has divided itself into six different segments; FedEx Express, FedEx Ground, FedEx Freight, FedEx Custom Critical, FedEx Trade Networks, and FedEx Supply Chain Services.

They are very innovative in coming up with new ways to add value to their customers experience with FedEx. They have always been wiling to embrace new technologies as well as create some of their own as shown in the example of FedEx using wireless technology to better track packages as well as launching its website with lets customers track their packages till it reaches its destination. They are responsive to their customers needs, as is evident in FedEx extending their drop-off times to better suite the needs of their customers.

They have also recently partnered with the USPS to include in post offices a FedEx drop off box

FedEx was the first in its industry to embrace wireless technology which enabled FedEx employees to access information from the companys information systems network 24 hours a day as well as using wireless collection data via a barcode and a magic wand that employees use to scan packages

FedEx established the first tracking applications website and provided each customer with a unique bar code to individualize each shipment.

In the early 1970s Fred Smith set out on a mission to found a transportation company called Federal Express. Today, FedEx Corporation is nationally and internationally recognized to have formulated the right mix of art and science as a successful service innovator. Finding new applications for innovations is something FedEx does particularly well. In fact, FedEx has been recognized by Information Week as one of the Top 100 Most Innovative Users of Technology. For example, FedEx didn’t invent the Internet, barcode scanning, or Wi-Fi. But, FedEx was among the very first to imagine how the Internet could become a tool for tracking and conveying shipment information. This is a big deal because tracking has made supply chain management fast and reliable on a global basis. And that’s changed the way the world does business.

In early 2002, when FedEx decided to kick its innovation and new product development practices into high gear, it partnered with Pittiglio, Rabin, Todd & McGrath (PRTM), a consulting firm that helps companies innovate for market leadership and greater shareholder value. For FedEx, this was the right decision because leveraging the extensive experience of PRTM in the development and implementation of culturally appropriate best-in-class new product development processes allowed the company to make significant strides very quickly. In a few short years, the company has moved from its starting position of project excellence toward its goal of portfolio excellence.

They started creating excellent awareness of the brand by advertising on their vehicles, massive ad campaigns. They have been one of the main sponsors for different sports like golf, tennis, racing, football.They have

designed various campaigns in the form of humorous TV ads, sketches etc. Some of them are:

According to the Center for Responsive Politics, FedEx Corp is the 21st largest campaign contributor in the United States. The company has donated over $21 million since 1990, 45% of which went to Democrats and 55% to Republicans. Strong ties to the White House and members of Congress allow access to international trade and tax cut rebates as well as the rules of the business practices of the United States Postal Service. In 2001, FedEx sealed a $9 billion deal with the USPS to transport all of the post office's overnight and express deliveries.[18]

In 2005, FedEx was among 53 entities that contributed the maximum of $250,000 to sponsor the second inauguration of President George W. Bush.

During the first three months of 2010, FedEx spent nearly $4.9 million lobbying the federal government (UPS, FedEx's main competitor, spent $1.6 million on lobbying over the same period), a 4% increase from the $4.7 million spent during the last quarter of 2009, but more than twice what it spent on lobbying during the first quarter of 2009.

Moving from better to best ad campaigns

“When it Absolutely, Positively has to be there overnight” – 1978–1983 “It’s not Just a Package, It’s Your Business” – 1987–1988 “Our Most Important Package is Yours” – 1991–1994 “Absolutely, Positively Anytime” – 1995 “The Way the World Works,” 1996–1998 “Be Absolutely Sure,” 1998–2000 “This is a Job for FedEx,” 2001–2002 “Don’t worry, there’s a FedEx for that,” 2002–2003 “Relax, it’s FedEx,” 2004–2008 "We Understand," 2009–present "WeLiveToDeliver" 2009–present "Brown Bailout" 2009–present "The World On Time" 2009–present

It changed its name from FDX corporation to FedEx corporation in 2001.

Logo transformation

CHAPTER-11

Future of the brand

Various Avenues which Fed Ex can explore in the future are:

FedEx has a competency in technology and innovation. They have a global mindset and are presently seeking to grab a global market share. This wouldn’t be possible without a constant push to improve upon and develop new technologies to improve their service.

FedEx may also want to consider appealing to customers through a variety of creative and recyclable packaging. Using themed packages for birthdays, themes, or holidays may sway some customers with a more personable product. Also, using and encouraging recycled materials may save on material costs and show the public a concern for the environment.

FedEx has 638 aircrafts, considering these resources; FedEx could re-deploy the use of its hubs and extensive terminals for offering storage solutions and logistics to businesses and public. Entering this new industry could offer FedEx a “white spaces” opportunity. (White spaces opportunities for FedEx would reorganize or recombining its current competencies creates new services)

In “Premier plus 10” category FedEx should consider the idea of building a shipping line of their own. Currently FedEx does not have any sort of a fleet. Since FedEx is already in the cargo delivery sector of the transportation industry a shipping fleet could possibly give FedEx chances to not only transport their own cargo but the cargo of other companies as well. This could be a good way to lower their own costs as well as bringing in additional revenue. Another premier plus 10 idea is to look into the production and sale of hybrid trucks that are environmentally friendly.

The scope of industries for Fed Ex to enter more has to do with moving goods or storing goods. With this in mind on industry that they could possibly enter as a mega-opportunity is the luggage industry. FedEx already has the existing competency of having boxes to ship goods in, whether it is large or small, FedEx will have a box to fit the need. They

could apply this competency to building suitcases or bags for the individual traveler.

Talking about the brand Fed Ex as such, it is one of the leading names in the industry and the brand stands for convenience and reliability. They have portrayed the same messages through a creative use of print ads and have triggered responses from customers across the globe. But if we take a look at its closest customers, DHL, it has focused more on video ads rather than print ads. Though no statistics are available on that front, but I personally feel a motion ad leaves a bigger impact rather than print ads. Another thing that has to be highlighted here is the brand associations of Fed Ex. It partnered with the Tom Hanks blockbuster ‘Cast Away’. In that movie Tom Hanks plays the role of an employee of Fed Ex and is left stranded on an island along with some of the things that he was supposed to deliver to customers when his plane crashed. The movie was an instant hit and also propelled the sales of Fed Ex as it was so prominently shown in the movie and gave a huge impetus to the company. But if we observe this industry none of the players have roped in a celebrity to market their product. All the players have gone as far going in for guerilla marketing, but not having celebrities endorsing their products.Take the example of a diverse country like India. Here the customers crave for an assurance from their celebrities to assist their purchases. One suggestion for them could be using athletes like Usain Bolt or Michael Phelps as they stand for speed and reliability. These would provide the best fit for their product.

Again carrying the example of India, they have managed to associate themselves in Hollywood movies, but the consumers here are more inclined towards Bollywood movies. Imagine a Shahrukh Khan or Amitabh Bachan using the services of Fed Ex.

Brands such as Fed Ex need to be constantly at their toes from competition from the unorganized sector like Trackon, Dot, etc. The same situation arises in every country for them.