What are the differences between the marketing strategy of UPS and the marketing strategy of FedEx?

Question

What will be an ideal response?

Answer 1

UPS handled three times as many packages as FedEx and made four times as much money. They owned the business of moving packages economically by ground and delivering them to any address in the US. FedEx in comparison was in the high margin overnight express but UPS began to go after this sector as well. UPS raised by $5.4 billion in November 1999 to expand their business in the US and in Europe. FedEx counteracted by getting into the trucking business and starting a new operation called FedEx home delivery specializing in deliveries to residences. They were beginning to step on UPS’s toes. Although the trucking business was run by independent contractors FedEx hoped that their brand name and reputation for service would carry the business through. They also invested $100 million in tracking systems to track goods wherever they went within the FedEx system. UPS in turn spent over $1 billion a year on information systems and improved its ability to track packages and its on-time performance. UPS also invested in airplanes right from the early 1980s and found that air express was a high-volume and lucrative part of their business. Although FedEx was the first to install intricate tracking systems to tell consumers are exactly their package was, UPS soon caught up and often more or less the same feature. UPS had a huge army of 150,000 trucks and drivers making ground deliveries to every address in the country so to keep up FedEx purchased Caliber Systems including a ground delivery division called RPS. RPS was less than a tenth the size of UPS. UPS grossed $27 billion a year and FedEx grossed around $17.5 billion last year. FedEx moved 4.5 million packages a day but because the majority of them went by airplane, the revenue per package was higher- and UPS was aware of this and built a huge hub in Louisville Airport to rival FedEx’s Memphis hub. But what UPS did differently was that it moved a lot of the packages away from airplanes on to cheaper trucks but still maintain a three-day average delivery time and this really took away business from FedEx’s air express operations. FedEx sponsored golf tournaments and had an up market image. UPS on the other hand portrayed a tough guy truck driver kind of image. This attitude came through even in their strategic vision of the future and their service quality. UPS currently had 80% business-to-business deliveries and wanted to focus on business to consumer but FedEx had 10% business-to-business deliveries and wanted to focus and improve this sector. Over the long-term FedEx wanted to become a key part of the build to order revolution. The Internet would allow cheaper and easier to use interconnected systems using which suppliers would be able to directly ship to residences. Eventually FedEx hoped to become the brains and brawn of a global Internet based system that moved and tracked goods around the world, and be the king of supply chain management systems. UPS seemed content with how their business was progressing currently.