Rajesh Subramaniam

Rajesh Subramaniam

Rajesh Subramaniam, FedEx’s chief marketing and communications officer indicated in January 2019 that they intend to improve their marketing plan and promotional strategies to cater for a problem that they have been facing, including lack of customer support. Rajesh was addressing a conference the Association of National Advertisers’ (ANA) 2018 Masters of Marketing Week. In addressing the decision for FedEx to invest in promotional strategies and improving marketing, Rajesh stated that “We are living in challenging times. On the one hand, forces like the internet – and FedEx, for that matter – have brought the world closer together, connecting businesses to customers around the world.” In April 2019, Forbes indicated that FedEx was running a marketing campaign which looks beyond pallets and packages to tell stories about communities and sending messages globally across the channel.

The FedEx over the years have been trying out different smart computer system and subsequently expanded their frontier and added more activities to meet the international standards. The corporation expanded and came up with more brands such as FedEx Express, FedEx Ground, FedEx customer critical, FedEx Freight, and FedEx global logistics with successful stores that have now transformed the world.

Currently, the corporation has been making huge efforts that benefit from diverse trends and implementing the porter’s five forces. The corporation is the largest express transportation company and continues to expand its services. The corporation keeps maintaining its position by constantly positioning itself as the best independent and effective industry in the services they offer and keeps focusing more on the delivery of services through segmentation.

However, FedEx has faced some challenges with a claim of misconduct in the delivery of its services. In June 2019, CNN reported that China was investigating FedEx after it diverted its packages to the United States.

Chinese government authorities issued a strong statement indicating that FedEx’s action has “seriously harmed the legitimate rights and interests of its client, and violated Chinese laws and regulations on the express delivery sector.” Again in June 2016, INDEPENDENT newspaper reported that US prosecutors accused FedEx of trafficking illegal prescription drugs on their online stores.

In response to claims of misconduct, FedEx chief marketing, and communications, Rajesh Subramaniam, in August 2019, indicated that the corporation has diversified to specifically deal appropriately with services and ensure constant commitment and ultimately keeps maintaining the customer satisfaction. The six units are specifically created to be able to focus on a particular segment and handle specific needs for different clients. FedEx has set out itself in the transportation corporation in terms of service delivery and pricing. It aims at conquering a frontier in all services and has now posed challenges in leading companies such as UPS, DHL, TNT, and others.

Background Information

FedEx is a courier company founded in 1973 by Frederick W. Smith. During college, he realized that America is becoming a service economy and needs a reliable night delivery service company. As an undergraduate at Yale University in 1965, Smith wrote a semester paper on the passenger route system used by most air cargo owners, and that he considered economically unsuitable. He said the shipper needed a system dedicated to air transport that could accommodate time-sensitive products such as pharmaceuticals, computer parts, and electronic equipment. Over the past 36 years, FedEx has expanded horizontally five subsidiaries, including FedEx (former FedEx), FedEx (formerly Road Parsel System), FedEx Customs (formerly Roberts Express), and FedEx.

FedEx is a transportation company headquartered in the United States; it has branches all over the world. The firm offers delivery and transportation services to a myriad of clients. FedEx Express mostly focuses on the door to door delivery through a money-back guarantee. It does this through its integrated network of vehicles and a technologically-based tracking system. FedEx Ground deals with the small package market in Canada and the United States.

This encompasses all the home deliveries that are less than 150 pounds. FedEx Freight covers the distributional or business market. Here, the company transports commodities that are time-bound, bulky, and essential to the supply chain. This market is also eligible for money-back guarantees. FedEx Services handles back-office activities such as IT, customer service, sales, and marketing. It also encapsulates FedEx mobile, which is a service that runs on mobiles and other Apple-based products. This facilitates the process of tracking one’s package to know where it is located. The firm’s main competitors include organizations such as DHL, TNT, UPS, and ABF Freight System. In this industry, FedEx is still recognized as a market leader because of initiating a number of services. FedEx was the first organization to introduce overnight letter delivery. It was also the first to bring in Saturday deliveries or deliveries that arrive at 10.30 am on the next day.

The firm handles customs brokerage and is also in charge of delivering packages across the border. Sometimes these clearances can be done electronically. The organization is ISO certified and also won a Baldridge Award for Quality. It transports approximately 2.9 million packages every night through air transport and meets the needs of Canadian consumers through a group of 3, 500 workers in the country. In the customer care category, the firm has about 250 employees who respond to calls all day and night from Canadian clients. The organization has a huge network of pilots and crew members to transport its packages. It is also highly innovative by investing in research and development. The firm has pioneered a number of services in the package delivery industry. Additionally, it has a global presence and invests heavily in technology.

Problem/Issue

The case study revolves around a customer service malfunction. The concerned client is an Office Manager at a Canadian-based firm, Desktop Innovation. FedEx lost her package temporarily and thus failed to deliver it on time. Furthermore, employees within the organization did not offer sufficient support to her during the delivery of this package. As a result, DI lost a very crucial business opportunity and cost its clients unnecessary expenditures in dealing with the challenge. The macro issue is poor customer service at FedEx. The micro issues include poor tracking and follow up of the lost package, inadequate feedback to the client on the status of the package, and uncoordinated responses to alterations in customer delivery requirements. The customer was also dissatisfied with the kind of compensation the firm was offering her, and she received no personal acknowledgment of the wrongs committed by FedEx.

Analyses show that approximately 85% of employee effectiveness emanates from organizational systems, while the rest of the percentage comes from the person’s skills. Therefore, all the customer service personnel in FedEx who dealt with the aggrieved client are limited by the procedures, processes, and policies put in place.

This company has a series of money-back requirements that must be fulfilled to qualify for a refund. Employees can only do so much for disgruntled customers if they require a refund but have not followed the right procedures. Therefore, these systems are a constraint in the process. On top of that, the company is a profit-making institution, which implies that all the decisions being made, must be in the best interest of the company shareholders. Sometimes this may involve reducing refunds because they may hurt their bottom line. Therefore, this case study examines the marketing plans and promotional strategies that Fedex has taken to improve its image and service delivery.

Another problem for FedEx is the substitution of their services. Their core competence is the overnight delivery of small packages, mainly documentation. However, with the development of electronic documents and email communication, mailing documents is becoming obsolete in the modern world. Therefore, in order to remain competitive in the market, FedEx should emphasize other services in its portfolio. Thus, the delivery of small packages, mainly for online retailers, is currently dominated by UPS in the market. However, this segment is one of the most promising, considering the rapid development of online shopping. FedEx is therefore considering to enhance its marketing plan and promotional strategies to penetrate current market trend and create strategic plans for product diversification and developing competitive advantage in other areas.

FedEx Marketing Plan and Promotional Strategies

FedEx Company has demonstrated a successful marketing strategy that takes consideration of the modern competition around the world. There are several ways in which business has adopted market strategies to stay abreast with the competing businesses around the world. In the analysis, FedEx Corporation has managed to keep its services up to speed with policies, promotion and right strategies in an efficient and effective manner. The company has demonstrated the use of SWOT analysis to make appropriate strategic plans in order to achieve the company goals. This is done through the assessment of the strength, weakness and threats and opportunity that are suitable for the business to make steps in the right direction. The company has been able to come with appropriate pals that enable them to compete with the global market and sustain their competitive position.

Additionally, the company has its own objectives geared towards satisfying its client by effectively competing independently. The plans are to make good use of the market mix such as the price place, product and promotion to attract client ton their services. This ensures that the company makes consistent and regular adjustment to suit the market variable and works towards ensuring that the company makes the best decisions.

The emerging trends in the industry indicate that more of technology can only help FedEx in devising products and services that satisfies the customers and reduces costs for the company. According to Rajesh, DFdex Chief Executive officer, in an interview in 2019, FedEx Supply Chain systems is marketed vigorously as companies is constrained by lack of large capital still seek the expertise of managing their business without losing focus on their core competencies.

North America has a numerous transportation service providers such as UPS and DHL. Furthermore, some of these companies control crucial aspects of the sector such as mail boxes.. This company also has a higher share of ground services than FedEx. It also boasts of superior ground services. Many competitors are merging and acquiring new portfolios that make it difficult for FedEx to stay ahead. As if this is not enough, some of the biggest FedEx clients happen to be competitors. One such organization is the US Postal service. FedEx has to collaborate with this company, but it also takes away most of its clients.According to Forbes magazine, one of the major strengths of the Fedex is that it is a household name in the US and Canada. Consequently, it is unlikely that a customer will abandon the business owing to first mistakes. Additionally, the company operates independently thus enabling it to respond to consumer demands collectively. On top of this, the company’s finances are in order.

FedEx has a huge network of pilots and crew members to transport its packages. It is also highly innovative by investing in research and development. The firm has pioneered a number of services in the package delivery industry. Additionally, it has a global presence and invests heavily in technology.

FedEx innovativeness has been one of their most prominent competitive advantages. They were the first to introduce overnight business delivery, the service they remain market leaders in even today. FedEx was also the first to recognize the need for customers to track packages, by creating Customer Oriented Services and Management Operating System (COSMOS), which provided information about the status of the delivery. Today SenseAwareSM solution gives an opportunity to monitor shipments in almost real-time, including their temperature location etc. FedEx is extensively using internet technology by providing the opportunity to send shipments through their websites prepare required documentation and check the cost structure online. Their supply chain is based on the latest technology, with the use of automated sorting, label identification and storage. It allows lowering shipping costs and reducing the impact of human errors.

Although advance technology and low operating costs are often the determinants of success, they cannot be the cornerstone of competitive strategy. With the delivery of documentation decreasing, FedEx is losing the market segment, where it always had competitive advantage. Moreover, the ownership of fixed assets (planes, trucks etc.) may reduce the cost in the short-run, however it hinders company flexibility in adjusting to the changing market environment. Furthermore, technology today is developing very fast, can be easily copied by competitors and goes obsolete in very little time. Therefore, FedEx should concentrate more effort on promoting the brand, developing closer customer relationships and redesigning their product offering, in order to stay competitive even with the loss of documents delivery business. Although technological superiority is necessary for future success, it is rather a “hygiene” factor, than a source for competitive advantage in the future market.

FedEx has initiated a new promotional strategy that involves sending emotional message using the new tagline, “What we deliver by delivering.” FedEx CMO, Raj Subramaniam indicated in press release that they have abandoned their former advertising campaign that was based on over-the top humorous approach to new campaign strategy to differentiate their brand from the competitors a well as to reach more customers. The new campaign strategy that FedEx has adopted shows that it’s not just about the package, but also about what these deliveries means to the people shipping them. The shift from the advertising that showed attribute, to the one that capture emotions is effective and differentiating. The new promotional strategy shows how FedEx is woven into people’s life and the culture of customer-oriented services. Rajesh is a big proponent that culture has to define the company’s culture. Rajesh in an interview he stated “Without a true culture, a brand doesn’t have authenticity and a brand that lack authenticity will fail”. IN a interview with Independent newspaper, Rajesh, FedEx CMO stated that “The beauty of this campaign, that we didn’t have to go look too far. So we simply manifest our culture in the advertising”. The new advertising campaign reflects the company’s culture in a unique way, making the FedEx brand to become unique and attractive.

FedEx has recognized the wake of digital marketing and the company is using social media to connect with 425000 FedEx team members around the globe. FedEx uses digital marketing as way to reach to young generation that has embraced new technology around the globe as well as making it easier for customer to receive information and feedback faster. The world is changing the communication patterns and channel. Upon realization of this, FedEx has embrace technology as mean to promote its brand. People are now more connected than ever, making it easier t reach customers at faster rate and respond to their demand anywhere in the world. Rajesh, FedEx CMO, stated that “We understand logistics is nothing without teamwork and this campaign aims to showcase the people whose enthusiasm and expertise powers our international networks, infrastructure, technology and processes.” The new campaign strategy is aimed at appealing the new to small and medium customer to make them feel part of FedEx.

Conclusion

FedEx has significant opportunities in its industry. First, it can expand into other global markets and thus tap into a larger market. Additionally, it can streamline its internet services so as to minimize the need for contact with consumers. On top of this, the firm can also heighten demand within the logistics industry. The organization has the option of using this complaint as a wake call. It can take the positive criticisms about its customer service and thus conduct a system overhaul. DI’s complaints are not the first, as many other repeat clients have experienced the same problem. If the company takes this route, then it will retain its workers about the importance of proper customer service. FedEx CMO, Rajesh in a press interview last year indicated that the company has put aside financial resources to cater for training involving several business related objectives such as the company goals and the importance of paying attention to customer requests. It seems many of the customer care respondents tend to dwell on dealing with as many incoming calls as possible. FedEx’s new marketing plan and promotional strategies my help to regain the trust of customers and increase trust as well as service delivery. The new emotional message campaign is likely to turn many customer to FedEx as it appeal to both big customer and small and medium customers