Marketing Plan Phase I – Helicopter Delivery from FedEx

Select a new product or service that will be launched by either an existing organization or one you will create. This product or service will serve as the basis for the Marketing Plan you will write throughout the course.

Obtain your instructor’s approval of your product or service before beginning this project.

Write a 2,800- to 3,500-word paper that includes the following:

• An overview of the organization
• A description of the product or service
• A SWOT analysis of the organization and offering
• A competitive analysis of the organization and offering using Porter’s five competitive forces model
• The criteria you will use to segment your market and select your target market including geographic, demographic, psychographic, and behavioral factors
• A description of your target market
• Needs that cause your target market to buy including emotional and logical drivers
• A written positioning statement that identifies:

• Your target market
• The needs that drive purchase
• Your organization’s industry category
• How your organization solves the target’s needs
• Your organization’s competition
• What makes your organization different from its competition

Organizational Background

Federal Express Inc, (FedEx) is one of the most recognizable package delivery service in the world. Since its inception, the company has demonstrated an exceptional aptitude for marketing and has grown into one of the largest corporations in the United States. The company’s mission is to “Grow our global business by serving the logistics needs of customers, offering excellence and value in all that we do.” FedEx operates in over 220 different countries and has the ability to deliver packages to every address in North America and Europe (United Parcel Service 2012). Marketing efforts will need to be suitable for a multicultural customer base and provide broad appeal to many different backgrounds.

Currently, FedEx offers a variety of different services that have a common goal in mind – move packages from the sender to the receiver. Ground shipping is the most affordable service and sends packages via truck or rail. Higher priced services use airfreight to get packages to their final destination much quicker. These services are marketed to both businesses and personal customers. The goal the product mix at FedEx is to offer their customers a collection of services that will balance their expectations on cost, speed, and reliability. In order to continue its dominance in the logistics industry, a radical new service is being proposed that will set FedEx apart from its competitors and position it for success in the future.

New Product Description

It is essential to develop a new service that can provide value to shareholders and customers, while having the ability to be scaled at a global level. The proposed service uses remotely operated flying Helicopters to deliver parcels directly to the homes of customers. This service relies on the latest advancements in Helicopter aviation and represents the next generation of package delivery technology. Initially, the Helicopter delivery service will be used to rapidly transport goods in densely populated urban areas. For example, if a San Francisco resident buys a product that is available in neighboring Oakland, a FedEx Helicopter delivery can get the package to the buyer within a matter of hours, or even minutes. Rather than waiting several days for the package to be sorted at a facility and routed on a truck, the Helicopter will bypass these steps and drop the package at the buyer’s doorstep. FedEx will be an early innovator of the value chain necessary to offer this service, thus allowing it a to establish an early position of leadership.

SWOTT Analysis

A SWOTT analysis will be used to organize the strengths, weaknesses, opportunities, threats, and trends that FedEx will encounter as it launches the Helicopter delivery service. This will help the company recognize its position from both internal and external standpoints.

Strengths can be defined as internal areas of the business that currently have an advantage in the competitive environment. An obvious strength of FedEx is its well-respected brand image. The company’s logo and slogan, “We heart logistics”, are easily recognizable by most consumers and business professionals. Because Helicopter delivery is such a radical new idea, a strong brand image will provide trust in the eyes of consumers from the beginning. The company will rely heavily on these intellectual assets as it sells and advertises this service to customers. A second major strength is the existing supply chain network and resources available to support its Helicopter fleet. FedEx will have the ability to easily adapt the design of this service as customer feedback is received. The service will evolve and with new trends in technology and FedEx is in a good position to capitalize on these trends.

Weaknesses are the opposite of strengths, or areas of the business that have a disadvantage relative to competitors. The primary internal weakness for FedEx in this project is lagging technology compared to that of competitors. Firms like Amazon, Google, and Facebook have already started to develop drone-based services for customers in the United States (Bailey 2014). At this time, FedEx has not started to develop the technological assets needed to make Helicopter package delivery a reality. Becoming a leader in this field will require a significant investment in research, development, and testing before it can be released to a wide audience. Attempting to push this technology prematurely could result in poor customer feedback, which would have a negative impact in the brand image and positive reputation.

Opportunities are factors in the external environment that the company can exploit to increase its competitive advantage. One of the most striking opportunities in the external environment for FedEx is growth in an urban logistics demand. Younger generations of business professionals are choosing to live in cities, as opposed to suburban neighborhoods. As cities become more crowded, it will be necessary to enable the physical transfer of goods by means that do not require physical stores or delivery trucks. FedEx has the unique opportunity to pioneer a new form of package delivery that is faster and more efficient than traditional methods. Growth in this market may be slow initially, but early adopting consumers will be willing to pay a high premium to participate. As the market grows, FedEx will be able to scale its resources to meet the demands of the market.

Threats can be defined as areas of the external environment that competitors will be better positioned to control. The single largest threat to the success of FedEx with this venture is Amazon.com, which is a step ahead in overall progress. With warehouses across the country, Amazon has the ability to control its own logistics and bypass the services offered by traditional shipping companies. If other online retailers follow this business model, it will give FedEx’s business customers more bargaining leverage and lead to an erosion of profits. This makes it crucial for FedEx to be an early innovator in the market, before competitors can gain an unstoppable advantage.

Marketing Research

Before the Helicopter delivery service can be designed, FedEx must analyze the target customer base and the efforts of competitors. First, the company will use marketing research o tactics to gain further insight into potential users of this service. Demographic segments will be limited to densely populated urban areas, starting with the major US cities if San Francisco, Austin, New York, and Phoenix. The demographics of the target consumer will have the following traits: middle to upper class, aged 25 to 55, high-income level, and working professional. In most cases, this service is expected to serve the needs of professionals who need materials quickly to perform their work. For example, a doctor may need supplies to complete a procedure, but does not have time to drive across town in traffic to retrieve them. The Helicopter delivery service will bridge this gap by allowing the doctor to receive the physical goods quickly without having to leave the office. High costs will be prohibitive for most consumers, thus the service will most likely be relegated to high net worth individuals and large businesses.

Psychographics help segment the target customer in greater detail by looking at their specific purchasing behaviors and lifestyle habits. One of the most important psychological traits of the target customer will be a desire to own advanced technology. These consumers are often labeled as innovators or early adopters, on simply techies. FedEx must tailor its marketing efforts to highlight the advanced nature of this service to tap into this psychological trait.

FedEx will target this service specifically at consumers who show behaviors of impulsivity and high productivity. Using a Helicopter delivery service will cost significantly more that using established courier services in urban areas. However, it will be faster and easier to use than anything these couriers can offer. Consumers with a strong desire to have their product as soon as possible will place a high value on the Helicopter delivery. In addition, there are many business needs that require immediate fulfillment. An individual or business manager that requires high productivity will also place a high value on this service.

At this point, the main competitors in the emerging Helicopter delivery market are major tech companies, like Amazon, as well as established logistics companies like FedEx. The existing resources of these firms are very strong, each with its own unique position to penetrate the market. Amazon is the leading competitor and it has already announced that is has preliminary technology to fulfill airborne orders. The company also has many warehouses throughout the world that could facilitate Helicopter delivery services. With a strong head start in research and development, Amazon will most likely start offering this service commercially before FedEx.  Next, FedEx has an established package delivery supply chain that may also use Helicopters in the future. While FedEx has not officially announced plans to use Helicopters, it certainly has the financial and industrial resources available to do so. FedEx will constantly monitor these two key competitors to measure their progress in this industry. Ultimately, data collected from competitors will help FedEx determine performance benchmarks and milestones.

References

FedEx Inc (2012). 10 K Annual Report to Investors.

Caldwell, S. (2010). SWOTT Analysis.

Bailey, B. (2014). Facebook’s Drone Strategy: Delivering Internet Access From The Air?