Heinz Adam, hired as the Director of Marketing at Federal Express Corporation (FEC) has been tasked with evaluating and developing future growth strategies. Amongst the different services provided by FEC, he believes that their overnight delivery service, Courier Pak has a significant room for growth. Currently, they are averaging 1300 packages per day and Adam wants to grow it to at least 6000 packages per day, a growth of almost 360% . Even though the number seems pretty high it pales in comparison to their other service, Priority One and the overall market size of the small package segment. His belief is reinforced in part by the fact that there has not been any marketing effort put into it so far.
Current State of Marketing:
FEC has decided to pursue the Small package market with three offerings viz. Priority One (P1), Courier Pak and Standard Air Service (SAS). Of these three, P1 and Courier Pak address the “Rush service” (next day delivery) segment whereas SAS addresses the “Routine Air” (2+1 days) segment. In the “rush service” segment, FEC has differentiated Courier Pak with a 2lb weight specification and the perception is that these packages will be delivered to the addressee as opposed to the receiving dock in the case of P1 packages.
The current state of marketing at FEC has been limited at best. FEC has done very little advertising and their primary “touch points” with customers is via CSR’s, delivery personnel and Customer service agents at pickup stations. FEC in its start-up phase has also spent its most efforts on perfecting operations and thus is more internally oriented. Their research on the small package market indicates a size of 870k packages/day, however there is no clear indication of the size of Courier Pak’s target market segment (rush service). Their first task will be to gain more insight into this segment. They will also need to adapt a more customer oriented strategy and gain insights into customer needs to become...