Sales Planning by Federal Express Service - Assignment Example

Sales Planning by Federal Express Service In recent years air cargo industry has experienced constant developments accentuated by door to door services handled by cargo express carriers. Today the focus is more on making passenger aircrafts large enough to carry cargo so as to provide increased and improved services to air cargo customers. In the era of increasing globalization, there will be more and more need of air cargo service with enhanced speed, timely service, low costs, and specialized customer services. This paper will focus on marketing strategies of Federal Express Service to deal with all obstacles so that it can tap the growing opportunities of the global consumer market. The product that has been considered in this paper is fashion garments. A proper and efficient marketing strategy contributes towards the financial success of a company. I consider that a marketing manager should have the ability to establish relationships with customers that will prove beneficial to the company. He should learn to assess the demands of customers and accordingly communicate and deliver goods and services to them. In the era of digital technology consumers can easily access various websites to compare prices and quality of goods, therefore I feel a marketing strategy must include advertisements which provide messages that are true to the nature and quality of the product or service. The primary element is to develop plans to learn the market trends and observe competition. To implement such plans is “both an art and a science” (Kotler & Keller, 24). I think it is the responsibility of a firm to keep its marketing managers continuously informed to facilitate them while developing and implementing marketing decisions. Marketing managers can analyze problems by constant knowledge of current sales, costs and inventory levels. This will help them to create strategies accordingly. The principle objective of marketing is to increase sales by attracting customers through advertisements and other promotional strategies. Marketing research is conducted for getting valuable insights about market trends, and customers’ preferences in order to understand and estimate customer needs. Based on the market research data and information, marketing managers plan their marketing strategies. The main issues that a marketing researcher concentrates on include target customers, requirements of these customers, markets areas that have most potential for the concerned product, transport facilities, reasons why customers need the product, the activities of competitors regarding similar products, and the changing pattern of the market. Since market conditions are always changing, therefore marketing research is extremely important for proper planning of marketing strategies. Therefore, such research is conducted by skilled and experienced organizations or people as it takes a lot of time. Data collected by marketing researchers can be primary or secondary. While primary data come from interviews and questionnaires, secondary data are collected from information available in other sources. Marketing strategies of any air cargo company need to be combined with facility development which is planning and implementation of new developments. The reason behind this is that marketing and facility development cannot be treated separately. There have been instances of many well designed marketing strategies which have wasted on paper due to lack of proper reasoning or they did not receive support from the entire organization. Any sales strategy adopted by air cargo company needs to be flexible so that they can be constantly upgraded by eliminating old ideas and developing new ideas to keep pace with potential growth of the industry. To achieve success in developing air cargo service, it is important that every airport has in store a clear set of objectives and a broad marketing plan of the products to be sold. Federal Express Service when preparing to design sales strategies of its fashion garments the need is to first gauge the strengths, weaknesses and opportunities in the regional markets. Any sales strategy needs to be formulated based on many major factors like facilities that will be provided by Federal Express Service, and the service infrastructure. For sales of fashion garments, the current and future trends are elements that need to given top priority. For Federal Express Service, business becomes lucrative if there are significant market possibilities along with supporting businesses to an airport. However, any air cargo company has several complexities that make it different from any other land express service. Therefore, even if a particular region has significant market potential for fashion garments there are many other factors that need to be taken into consideration by Federal Express Service like accessibility of proper roads, storage facilities like warehouses, aeronautical mechanisms, and ramp area. Therefore, Federal Express Service marketing designers attempt to coordinate their marketing policies with the availability and development of cargo facilities. The second step of Federal Express Service’s marketing strategy is to decide specific objectives. Then it is necessary to decide the kind of customers to use as target so that the fashion garments can reach the right customers within a certain time so that the set objectives can be fulfilled. Today, fashion industry thrives on speed of shipping. Since fashion is an ever changing trend with examples of fashion changing overnight, the industry can no longer depend on week to month long delivery to distant countries via sea or road. The key to success today is delivering goods to the customers at the right time, and international fashion brands like Guess jeans, Dior, Armani, Chanel and Gucci are dependent on the air cargo industry so that they can dispatch their goods to their customers with ultimate speed. This is even more necessary since fashion industry is extremely competitive. One major benefit of dispatching clothes and garments with air cargo is that the goods remain in good quality when they reach the customers. This is because air cargo companies like the Federal Express Service have the technologies to control humidity level and protect the garments from dust. Air cargo service also helps in easy allocation of inventory, and helps to capture the global market in a very short time. Air service is especially useful for online sales of fashion garments and it is also a basic marketing and selling platform for fashion garments. Fashion industry is extremely volatile as it is subjected to rapid changes. For this reason, to maintain its position in this industry, the company needs to be adaptive to changes and should have the ability to respond to market trends. According to Christopher, Lowson and Peck (2004) fashion industry is known for its four distinct features. First, fashion garments have very short market appeal since these products are dependent on the market mood. The saleable period of a specific consignment can remain for only months or even weeks. Second, the demand of fashion garments is very volatile as the customers can be influenced by numerous elements like television programs, fashion magazines or even weather or celebrity styles. Third, due to the volatility of market demand of fashion garments, it is very difficult to make accurate prediction of total demand during a specific period for as short as a month or even a week. Fourth and very important characteristic of fashion industry is that customers often purchase garments on impulse like shoppers feel the impulse to buy a garment when they are confronted with it. Therefore, it is very important that fashion garment companies ensure that their products are always available in major shopping malls across the globe. For all these combined reasons, it is even more imperative that fashion industry relies on air cargo industry to make instant transportation of goods to the global market. As such Federal Express Service offers its facilities to fashion industry in many countries. Considering the volatile market condition of the fashion industry, Federal Express Service allows international brands to renew their range of products in the global market on weekly basis. Other than this, there are other advantages of sending goods by air freight. An international fashion garment company can respond to orders that need quick delivery of products, and this will enable the company to accept large number orders in a year. Moreover, for a garment company it will be convenient to accept excessively large orders by shipping the products using sea freight, and then using air freight to dispatch more garments if demand is greater than expected. Availing the services of air cargo can also help a fashion garment company to diversify their products, i.e. entering and capturing new markets. With air freight service, the company can experiment demand of their products in a new market by sending small volumes. Subsequently, if the company can establish their products in the market then it can opt for cheaper mode of transport to make bulk deliveries. Such strategies are especially useful for landlocked countries as these countries are subjected to strict clearance procedures at their borders. However, in spite of such big advantages, air cargo service becomes a costly way of goods transportation compared to other freights like sea or land. As per the World Bank estimation, the cost of transporting goods via air freight can be 4 to 5 times higher than that of road transport and 12 to 16 times higher than that of sea transport. Moreover, the price of air freight can range from $ 1.50 to $ 4.50 per kilogram (Air Freight, 2009, p.xv). This makes the transportation cost of every unit of product much more expensive than any other forms of transportations costs. Therefore, this can be great risk for the fashion industry whose product marketability is subjected to mood swings, weather conditions and current fashion trends in the glamour world. Since the principle benefit of air cargo service is delivery of goods in a very short period, therefore it is imperative that the cargo moves quickly through an airport. This is another factor that needs to be considered by the sales manager of a fashion garment company. There are several factors that decide the movement of cargo through an airport like the procedures of customs clearing. In most countries, inbound cargo takes one or more days to be cleared and so this can delay the cargo to reach the destination market. Another important factor that has to be taken into consideration while opting for air freight service is the fuel costs. As a result of the recent increase of oil price, the World Bank has estimated that “fuel now accounts for about half the annual cost of operating an aircraft, whether for cargo and passengers” (Air Freight, 2009, p.xix). This adds considerably to the cost of the cargo. Estimation of cost is based on the weight of the cargo and the distance to be covered since fuel consumption by an aircraft is dependent on its weight and distance to be travelled. Also, for sales strategy the distance between the source of cargo and destination is to be considered as air freight cost can be higher for shorter distance than longer distance. This is because in the former case, the aircraft spends a large amount time on the ground and while in the air a bulk amount of time is spent on ascending and descending. Therefore, if the distance is short then it is preferable for the garment company to select alternative mode of transport like road transport via trucks. Understanding customer needs and studying their behaviour are the vital objectives of sales research. Not all people have similar demands and preferences. Therefore, it is important to make segmentation of customers according to their age, social and economic backgrounds. The idea is to put customers into groups with similar set of needs that can be satisfied by a specific market planning. Since the concerned product here are fashion garments therefore target customer base differs according to the varied products. Not all fashion brands focus equally on male and female customers, and therefore based on the type of garments produced by a particular company sales strategy should focus on male or female customers. Moreover fashion garments are made according to the seasons like men’s shorts have more demand during the summer while woollen garments will be sold during the winter. After selecting the region where Federal Express Service will focus their sales strategy they have to consider the current season of that region based on which they can make their strategies. Next thing to be considered is the age of the potential customers based on which most garment companies decide their target customers. Many fashion garment companies may create their current garment line for teenage girls and boys. Since this age group has extremely volatile demand curve, therefore for clothing lines the choice of air freight is always more preferable than other modes of transport. For teenage customers, Federal Express Service chooses that time of the year when new school year is about to commence since during this phase of the year most young boys and girls prefer to engage in shopping. For the sale of garments of certain companies which especially create apparels for infants and toddlers, Federal Express Service focuses on the same s as this segment is also significant in size. Depending on the type of garments, Federal Express Service also takes into consideration geographical areas based mostly on the region’s weather conditions. In case of coats and jackets the air cargo company focuses on sales promotion in countries with prolonged cold weather while for shorts and swimwear the focus is more on countries with warmer climate. For sales and marketing of products a set of tools is considered which is commonly known as 4Ps: product, price, place and promotion. Product is the item that is produced by a company in order to satisfy the needs and desires of target customers. Product can be any physical good, service (e.g. nursing), or event, or it can be combination of all three. A product’s popularity depends on its features, packaging and quality. Next is price, which is the valuation of a product in monetary terms. Pricing is determined after considering the cost of production and target customers, for instance a product with teenagers as target customer base cannot have a high price since this group of customers have limited access to money. Pricing strategy includes discount offers and credit terms. Place means where and how a customer can purchase a product. In this case Federal Express Service is planning the sales of fashion garments which is the product. For this product, the focus is more on men and women between the age of 15 and 50 since during this age group people are more conscious about wearing fashionable attire. Next, pricing should be fixed keeping in mind the competitive market. In case of international brand fashion garments the price can be high since the usual customers come from the upper class societies. Fashion garments need to be promoted in big shopping complexes in urban regions where the demand for the same will be the highest. The best way that Federal Express Service can select to promote fashion garments is to place advertisements on TV, websites, and fashion magazines since majority of young people are addicted to all or any these three media forms. Overall, Federal Express Service will plan its sales strategy by considering all the marketing factors attached to fashion garments. Moreover, fashion garments are of huge variety that caters to different segments of population based on age, gender and habits. This paper has covered all these factors to present a sales plan on behalf of Federal Express Service. References Air Freight (2009) World Bank, retrieved on April 8, 2015 from: http://siteresources.worldbank.org/EXTAIRTRANSPORT/Resources/515180-1262792532589/6683177-1268747346047/air_cargo_study.pdf Christopher, M. Lolwson, R. & Peck, H. (2004) Creating Agile Supply Chains in the Fashion Industry. International Journal of Retail and Distribution Management, Vol.32, No.8, pp.367-76 Kotler, P. & Keller, K.L. (2007) A Framework for Marketing Management: 3rd ed., Pearson Education Read More