Federal Express Product Analysis Essay

1219 Words 5 Pages
Federal Express main products are delivering packages to widespread locations within a short time. In this case study, we would focus our discussion on its most profitable services, i.e. Priority One, Standard Air Service, and Courier Pak (Table 1).

Federal Express Product
FedEx specializes in guaranteed overnight delivery of high-priority packages, documents, and heavy freight.

How does Courier Pak fit in Federal Express?
For services users
Courier Pak is a guarantee overnight delivery service, and is expected to be delivered to anywhere within the FedEx system for the cost of $12.5 with the weight up to 2 pounds regardless the distance of the destination. Courier Pak's waterproof, tearproof envelope offered a
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On the other hand, FedEx also included delivery routes into small cities that other companies didn¡¦t, and which cities had found that the number of shipments to be growing rapidly.

Potential for Courier Pak
From Table A, it shows us that the routine air package market was at 122.3 million compared to emergency and rush packaged, which were only 18 million combined. The Courier Pak is in the routine air market and has tremendous growth potential. Furthermore, from Exhibit 4 there was a continuous growth in both average daily package volume and average daily revenue from 1974 to 1976 for shippers using different service methods, which implies that there were rooms to improve the sales after then.

In September 1974, Courier Pak prices increased from $5 to $8.50. After Economy Air discontinued, the price of which increased to $12.5, more than two times of its original price in early 1974. However, the package volume of Courier Pak continues increasing, which showed that there is a need for customers using Courier Pak. On the other hand, price inelasticity occurred for the product. Thus, there was a great potential market for using Courier Pak.

The Goal
Federal Express would like to increase Courier Pak volume from 1300 Courier Pak to t least 6000 per day.

Identify Market Segment
Decision of using Courier Pak was

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