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UPS Marketing Plan
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Introduction
UPS (United Parcel Services) is an international supply chain management company in the united states. The company deals in multinational shipping and receiving of parcels across the world. The company was founded in 1907 in Seattle, Washington as the American messenger company by James Casey. Its headquarters is at Sandy Springs, Georgia, USA. The company operates globally, under its current CEO, Carol Tome. UPS is a publicly traded company operating in the courier services industry. Some of its main products include courier express services, logistics services, freight forwarding services and UPS ground. Being among the largest courier services in the world, UPS has an operating income of $7.684 billion and a net income of $1.343 billion (MORGAN et al., 2022). The company has created a lot of employment opportunities globally, having approximately 481,000 employees working in its different branches (MORGAN et al., 2022). The company has grown through its operations to be listed under the fortune 500 companies.
UPS offers shipping services and provides tools for small enterprises. The company is popular for its fast and efficient services taking only two days to deliver post office boxes. Through its operations, UPS is recorded as the largest company in the world based on its revenue. The company’s main hub is UPS World port in Kentucky which is the third busiest airport in the United States (MORGAN et al., 2022). The company’s management has built its operations internationally, beating its competitors in the industry. Just like any other business, UPS has a marketing plan that it follows for its achievements. This paper will discuss the company’s marketing plan in depth.
Competitive Analysis
The main competitors for UPS are the United States postal services and FedEx cargo (Rajendran, 2021). FedEx is well known for its next day air delivery services. As a competitor of UPS, FedEx’s unique feature is next day parcel delivery. The company has managed to gain a competitive advantage from its timely delivery as compared to UPS. USPS focuses on small parcel delivery and mail delivery to residential places. This is the company’s main competitive advantage. Although its competitors have used these competitive advantages to compete with UPS in the market, UPS has many strengths that help it retain its customer base and remain afloat in the market.
UPS strengths include;
· A strong global presence. The company has expanded its operations worldwide into more than 140 countries in different continents. The company has also diversified its operations by offering small package delivery to over 220 countries globally (Rajendran, 2021). A strong global presence has helped the company gain more customers hence increasing its profitability.
· Online tracking and use of modern technology. The world is currently revolving around digital technology. Most people have embraced the use of modern technology in daily aspects of life. UPS has taken advantage of this opportunity. The company tracks its deliveries online thus it is able to make 295 million deliveries in a day (Rajendran, 2021). The company has built a SMART (south east metro automated routing terminal) in Atlanta that it uses to connect the company’s systems and the entire network.
· Excellent customer experience. The company offers quality services to its customers. This has helped UPS to maintain good relations with its customer’s hence boosting customer satisfaction. The company ensures timely delivery of services and customer inclusion in decision making.
· The company maintains a very high level of innovation (Rajendran, 2021). The company’s chief logistics officer developed a mart logistics network known as Forbes CIO Innovation Award to motivate the company’s employees to invest in innovation. Increased innovation in the company keeps the company ahead of its competitors hence increasing its productivity.
· Competitive prices. Although the company offers quality services, its prices are affordable to people from all social classes. The management has ensured that it has affordable services for everyone. Therefore, it has gained a competitive advantage due to its affordability than its competitors in the industry.
Some of UPS’s weaknesses include;
· Reliance on the United States market. Despite its operations globally, UPS majorly relies on the US market. As of 2020, domestic services yielded $58.6 billion of the total revenue (Rajendran, 2021). With smaller upcoming domestic companies in the industry, UPS is likely to lose market in the US.
· Financial crisis. The company has to spend more than normal during high peak seasons (LABIYI, 2018). This is to ensure timely delivery during the peak season. The high spending to meet customers’ needs results to reduced company profitability.
· Operational difficulties. UPS management has been reluctant in changing and upgrading its equipment since the 19th century (Rajendran, 2021). Upgrading of infrastructure requires a larger cost than the company’s revenue. Therefore, use of old equipment leads to slow activity hence the threat of competition from other market players.
Some of the strengths for FedEx and USPS include;
· A higher brand reputation. Both FedEx and USPS have a greater brand reputation than UPS. According to Forbes ranking in 2020, these two competitors were ranked ahead of UPS (LABIYI, 2018). Therefore, they have a higher competitive advantage in the industry.
· Both USPS and FedEx have time-critical deliveries (Rajendran, 2021). These two companies ensure a one day delivery to their customers as compared to UPS.
The competitors’ weaknesses include;
· Lack of diversification (LABIYI, 2018). These two competitors only rely on delivery services. The market is crowded with many players, which might lead to lose of the companies’ competitive advantage.
· Increasing transport costs. Both companies spend over 20% of their revenue in transportation (Rajendran, 2021). This leads to a lower profitability for the company.
Marketing Strategies
UPS marketing strategy is based on the 4Ps marketing mix. Using this marketing mix has helped the company to grow its brand and position itself competitively in the market. For this strategy, we will discuss the product, price, place and promotion strategies.
Product strategy
UPS is among of the world’s leading courier and Logistics Company. The main aim and goal of the company is to provide focused services including consumer services, aero scope, retail and healthcare services (Caliskan et al., 2020). The company divides its products into global small packages available in the delivery services. The company further divides these global small package services into either international or domestic services. For domestic services, the company offers bound delivery services that are money-back guaranteed (Ahmed, 2021). The company offers its customers with a wide selection to choose from. These include light weight delivery, same day delivery, and next day delivery. The international services is further divided into express and express saver, express plus, and express critical services. The company’s product strategy has created a wide array of services that customers can choose from. Through such diversification, the company has gained a competitive advantage in the industry.
Pricing Strategy
Due to the increased number of competitors in the industry, the company’s management has worked on an effective pricing strategy. The company’s pricing policy is based on the distance of transportation, dimension of the product, value of the product and time of delivery (Caliskan et al., 2020). The company also includes surcharging costs and other handling costs. International services have a premium price that depends on the region of shipment. The company changes its prices based on the quantity been transported and the season surcharge. During peak season, the prices are likely to be lower than off-peak period (Ahmed, 2021). The company offers affordable prices to its customers. Despite offering high quality services, the company ensures that these services are affordable so as to lure more customers to the business.
Place Strategy
UPS has a global coverage of over 220 countries. The company has warehouses that it uses to store deliveries. The company has a very strict supply chain that focuses on timely delivery and distribution. The company holds over 35 million square feet of warehousing facilities globally (Caliskan et al., 2020). The company owns over 100,000 package cars that are used for delivery services. The company has tractors and trailers to handle ground delivery services and lad items into flights and trucks. The company owns over 200 aircrafts that it uses to deliver services. The company’s management has ensured that all UPS offices, stores and warehouses are strategically placed (Ahmed, 2021). The customers can easily reach the company due to its strategic positioning in major cities. This eases use of the comp-any’s services hence increasing sales.
Promotion Strategy
UPS uses both print and digital media for advertising. With the increased use of modern technology, the company has embraced advertising through social media platforms (Caliskan et al., 2020). Some of these platforms include Facebook, twitter and Instagram. The company ensures that it regularly advertises its services to lure more customers into the business (Ahmed, 2021). The company has a digital trading platform. This e-commerce platform allows the company and the customers to relate. Thorough its advertising strategy, the company has managed to increase its sales hence its profitability.
Competitive Advantage
UPS major competitive advantage is diversification (Kusumadewi & Karyono, 2019). The company has a broad range of services that customers can choose from. Customers are free to select any delivery options they deem fit. The company also offers a wide range of supply chain options (Kusumadewi & Karyono, 2019). These include truck brokerage, order fulfillment, returns management and freight forwarding. Through these actions, the company has gained a competitive advantage over its competitors in the industry.
References
Ahmed, N. (2021). Marketing Communication: Creation of Effective Strategy.
Caliskan, A., Özen, Y. D. Ö., & Ozturkoglu, Y. (2020). Digital transformation of traditional marketing business model in new industry era. Journal of Enterprise Information Management.
Kusumadewi, R. N., & Karyono, O. (2019). Impact of Service Quality and Service Innovations on Competitive Advantage in Retailing. Budapest International Research and Critics Institute-Journal (BIRCI-Journal), 2(2), 366-74.
LABIYI, F. G. (2018). How can parcel (package) delivery logistics company re-engineering their process to minimize the high send-again (returns): A study based on UPS (United Parcel services) Delivery Logistic Company in Jönköping Sweden.
MORGAN, J., Stanley, M., CAPITAL, B., PARIBAS, B., & SECURITIES, R. W. F. (2022). UNITED PARCEL SERVICE, INC.
Rajendran, S. (2021). Improving the performance of global courier & delivery services industry by analyzing the voice of customers and employees using text analytics. International Journal of Logistics Research and Applications, 24(5), 473-493.
