Fedex Courier Pak
By 1976, the company was slamming its better-known competition in delivery speed, while also undercutting its competitors’ price. For example, an independent research group found that 93 percent of FedEx Priority One packages arrived the next day, compared with only 42 percent for Emery Air Freight, and lower percentages for FedEx’ other competitors. Furthermore, FedEx’ service was found to be cheaper than Emery’s. Clearly FedEx was uniquely positioned to exploit these results – and a marketing campaign would be effective in convincing potential customers of this advantage.
4. PRICE INSENSITIVE CUSTOMERS.
Research suggested that customers dependant on next-day rush service, were price insensitive. In 1976, after raising prices for Courier Pak by 20 percent, FedEx experienced a 15 percent increase in volume. Thus it stands to reason that FedEx could benefit from future price increases, which would not affect their volume but would boost their already robust profit margin for the product.
As a result of these four factors, Federal Express executives have the most to gain by allocating their marketing funds to advertising the Courier Pak service.
WHOM TO TARGET.
Users of Courier Pak’s competitor