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Company Case 1
FedEx: Making Every Customer Experience Outstanding
Synopsis
FedEx got its start when no company was providing overnight delivery service on a broad
scale at affordable prices. Fred Smith, the company founder, recognized that the value of
overnight delivery for businesses in particular was very high. The company was built on
the promise of getting a package there when it “absolutely, positively has to be there
overnight.” Since then, FedEx has expanded its services. But perhaps more important, it
has focused on providing exceptional customer service by making it part of the company
culture.
Teaching Objectives
The teaching objectives for this case are to:
1. Introduce students to the concept of customer value creation and its central role in
marketing.
2. Provide a case for the analysis of customer satisfaction.
3. Consider the business model for a company and how it fits into marketing
management orientations.
4. Introduce the concepts involved in customer relationship management.
Discussion Questions
1. Give examples of needs, wants, and demands that FedEx customers demonstrate,
differentiating these three concepts.
Needs. As the text states, needs are defined as “states of felt deprivation.” The
core business concept of FedEx is built around a core need that individuals and
Wants. Wants fulfill a consumer need, but in a specific way that isn’t necessary for
the fulfillment of that need. One example of FedEx fulfilling a want would be
when a customer doesn’t have to have the item there the next day, but would
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Part 1: Defining Marketing and the Marketing Process
Demands. You need reliable transportation. You want a high-performing luxury
sport sedan. A BMW M5 would fit the bill. But you don’t have the “buying
power” to get your wishes. In FedEx’s case, the very founding of the company
2. Describe FedEx in terms of the value it provides customers. How does FedEx
engage customers?
Value = benefits – costs.
Benefits – overnight delivery, same-day delivery, service from and to just
3. Evaluate FedEx’s performance relative to customer expectations. What is the
outcome of this process?
This question references the concept of customer satisfaction. Customers are
satisfied when perceived outcomes match expectations. FedEx set the bar high
from the beginning with “When it absolutely, positively, has to be there
4. Which of the five marketing management orientations best applies to FedEx?
FedEx’s “purple promise” to make every customer experience outstanding fits
best into the marketing concept orientation. This is clearly not a company that is
5. With increased competition today, how can FedEx continue to be competitive?
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Chapter 1: Marketing: Creating and Capturing Customer Value
The basis of FedEx’s business plan is set—reliable and affordable overnight
delivery service. But now there are many companies offering the same service
(USPS, UPS, DHL, etc.). FedEx’s focus on the customer experience takes its
Teaching Suggestions
A discussion based on this case is optimal when the concepts of needs/wants/desires,
customer value, customer satisfaction, and marketing management orientations have been
covered. After these concepts have been covered, ask students to consider a time when
they had a task that absolutely had to be done by a certain date and time, and they simply
did not have the capacity or the time to complete the task. What did that situation feel
like? How could someone or some company have helped them? How much would they
have been willing to pay? This sets the stage for FedEx’s business model. At this point,
have the students read the case in or out of class. Then, direct a discussion based on the
questions.
This case was developed to be used with Chapter 1. This case also works well with the
marketing strategy chapter (Chapter 2) and the consumer behavior chapter (Chapter 5).
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