Understanding and learn what? Case Study of Using Marketing Channels to Create Value for FedEx Customers.
FedEx as a service company that mainly focuses on transportation or shipment services, channel played an important role leading to success. FedEx need a good channel to get and reach more customers. FedEx has a strong network structure linking all the market together. FedEx serves more than 220 countries and territories currently. Further, these networks are linked up by land, air and ocean transportation. Also learn, Case Study of Using Marketing Channels to Create Value for FedEx Customers, with How companies create value for customers? How is Value Created and What Does It Do?
FedEx’s service covered all around the globe, making services available for customers from many countries and almost every place. FedEx has many drops off location around the globe. A customer can choose either one drop- off location that is nearest to them.
FedEx has great air network, having more than 320 daily international flight and 654 aircraft ready to ship the packages. FedEx has many hubs around the world working as a midpoint for delivering the packages. There are four hubs in the Asia Pacific. That is Shanghai, Osaka, Seoul and Guang Zhou. Besides, FedEx has hubs in London, Cologne, Frankfurt, and Paris which will later ship the parcel around the European area. Moreover, hubs that link Latin America, the Caribbean and Canada were in Memphis and Miami.
One thing that makes FedEx so special out of so many transportation or shipping company is the collection of airplane uses by FedEx in order to ship the parcel. FedEx is the first company who use the plane called the Boeing 777. The uniqueness of the plane is the plane is a fuel saver. It shorter the transit time with larger space to put the parcel. This had made the overnight courier service possible.
FedEx was famous for its overnight service. Customers can receive their packages at the same time on the next day. The strong backbone of shipping network structure by FedEx makes this service available. An example is given to explain how FedEx manage to ship the parcel between 24 hours and reach 10.30am. A customer decided to ship his parcel from Shang Hai to New York City. FedEx pick up the shipment in time to make the same-day trans-oceanic flight. FedEx picked up the package from the client at the time of 4:50 pm, Tuesday. The package was delivered to Shang Hai’s facility for sorting process.
Then, the package reaches Shang Hai Pudong International Airport at 9:30 pm. At 11:30 pm, the package leaves China and in the Boeing 777 aircraft on the way direct to Memphis, Tenn. The flight travel east of the Pacific Ocean and passed the International Date Line. At the time 11:30 pm, the package arrived in Memphis. In Memphis, the package was on loaded, cleared, sorted and reloaded on to a flight from Memphis to Newark. In Newark, the shipment ship by truck to New York City. This is how the package from Shang Hai reach the client in New York City and at the time 10:30 am Wednesday.
From the example, the package was first picked up and sends to the facility for the process, then to the airport. The package then reaches the hub and been process again. Finally, the package was delivered by motorized vehicle. FedEx has more than 43,000 motorized vehicles which make FedEx manage to reach many places in the different country. Example of motorized vehicle commonly used by FedEx was trucks, vans, containers, and also tricycles.
FedEx delivered by electrically-assisted tricycles in Paris to avoid the traffic jam in order to ship in time. The tricycle was designed to put packages back on the tricycle. It has a removable storage container that places between the back two wheels. It is 100 percent electrical and it has to start manually. It is 100 percent eco-friendly and it enables delivery work more efficient even faster than a car or truck.
FedEx not only ship with aircraft and motorized vehicles, but also by ocean cargo. It provides another choice for the customer to choose from. The ocean cargo services provided by FedEx linking North America, Latin America, the Asia-Pacific region, Europe and the Middle East together. Besides, FedEx has enough amount of ocean cargo to make their services, choosing the space of cargo available.
For example, allow the customer to have full-container-load (FCL) for the user that need huge space and less-than-container-load (LCL) for those customers that does not need so much cargo space. Further, FedEx has ocean cargo with the different facility like the refrigerator, onboard cranes, on the cargo ship to provide the service like ship dry or liquid bulk shipments and handle heavy shipments to smaller ports.
Moreover, customers usually expect their package to ship in time with good condition. FedEx understand that and come out a solution that is provided packing service. It tried to help in avoiding damage in packages. In order to make the service available, one of the FedEx’s subsidiaries company was designed to become one of the channels in helping customers to pack their packages. So, customers can now bring their package to any of the FedEx Office and ask for pack up service.
Further, FedEx knows that this the era of information technology. Everyone seems to be online often and many things can be done online. FedEx understand that there is a need to open a website as a channel in order to make the service available for more people, especially for those who seldom go out and always do online shopping. The website makes the process of shipping easier. Everyone can use the service. Now, FedEx’s customer can ship online with few steps and avoid many processes of filling up the forms.
FedEx reach customers in many different ways. Beside of online, by air, by land, and by sea, FedEx reach customers by telephone and fax. This is another channel provided by FedEx to the customer called and picks up service. In order to provide convenience to the customer, understanding some people might think lazy to go out just for dropping a small package, and also for people who definitely very busy and lack of time, called and pick up service is a very good way to reach them. The customer can just dial FedEx’s customer service number and ask for a pickup. FedEx will pick up the package from you and the great thing was the time count once the package was picked up by them. Further, Customer can fax to the company to have the service.
In another hand, mobile phone or smartphone are using as a channel to reach more customers. Smartphone becomes very popular nowadays. People tend to have one smartphone to do many tasks on the go. FedEx makes the website of FedEx available for the smartphone user, trying to attract more customers to use their service. FedEx customer can do tracking of the parcel, schedule a pickup, and even billing by using the phone. It makes the service become very convenient especially for those who usually travel around and wish to deliver their parcel.
FedEx understands the importance of customer service. So, a company called FedEx Service is there specialized in information technology. They providing back up and information like tracking information, customer’s detail, and customer’s history of using FedEx’s services, estimate the duties and taxes and handle the claims and complaints. Besides, the company also provides information about the service and company. It is to make the customer service and online tool available at all the time whenever customer needed them. Furthermore, it is a guide for the customer because much information was provided on the website.
One of the channels in marketing is the employee. As a service provider, the employee is the first who reach the customer and make the service available. It often leads to satisfaction of the customer. In order to make the service delivery to a certain standard, the employee is trained. The employees required to test every six months to ensure their skills meet minimum acceptable requirements. Extra training was required for those who have not met the minimum requirement. Employees need to go through computer-based training, satellite broadcast training, and staff-conducted training in order to perform the service to the customer.
FedEx’s channels are backed by the computer system called COSMOS. That is Customers, Operations, and Services Master Online System. It is a centralized computer system to manage people, packages, vehicles and weather scenarios in real time. It is to make sure all the channels are working properly.
How companies create value for customers?
With these concepts in mind, think about ways you can improve customer value to grow your business. This is article presenting by inc.com. Here are 5 steps you can take:
Step 1: Understand what drives value for your customers.
Talk to them, survey them, and watch their actions and reactions. In short, capture data to understand what is important to your customers and what opportunities you have to help them.
Step 2: Understand your value proposition.
The value customers receive is equal to the benefits of a product or service minus its costs. What value does your product or service create for them? What does it cost them–in terms of price plus any ancillary costs of ownership or usage (e.g., how much of their time do they have to devote to buying or using your product or service?)
Step 3: Identify the customers and segments where are you can create more value relative to competitors.
Different customers will have varying perceptions of your value relative to your competitors, based on geographic proximity, for example, or a product attribute that one segment may find particularly attractive.
Step 4: Create a win-win price.
Set a price that makes it clear that customers are receiving value but also maximizes your “take.” Satisfied customers that perceive a lot of value in your offering are usually willing to pay more, while unsatisfied customers will leave, even at a low price. Using “cost-plus” pricing (i.e., pricing at some fixed multiple of product costs) often results in giving away margin unnecessarily to some customers while losing incremental profits from others.
Step 5: Focus investments on your most valuable customers.
Disproportionately allocate your sales force, marketing dollars, and R&D investments toward the customers and segments that you can best serve and will provide the greatest value in return. Also, allocate your growth capital toward new products and solutions that serve your best customers or can attract more customers that are similar to your best customers.
Your customers are the lifeblood of your business. They are the source of current profits and the foundation of future growth. These steps will help you find more ways to grow your business by better serving your best customers.
How is Value Created and What Does It Do?
Value is created just as much by a focus on processes and systems as much as it is my mindset and culture. Mindset and culture are much more difficult to change, and also difficult to emulate. It is easier to copy products and systems than to change mindsets and culture. Therefore, for long-term success, mindset and culture are important and lasting. These, along with systems create great experience and value.
Value changes during the use of a product or during the Customer Journey. Value is perceived during the purchase intent, the shopping, the actual purchase or buying, the installation or start-up, the use and even the re-sale. We sometimes call this the waterfall of needs. Needs change during the Customer Journey.
Creating Customer Value increases customer satisfaction and the customer experience. (The reverse is also true. A good customer experience will create value for a Customer). Creating Customer Value (better benefits versus price) increases loyalty, market share, price, reduces errors and increases efficiency. Higher market share and better efficiency lead to higher profits.