Freight Forwarding Company the Market Plan Essay

¶ … Freight Forwarding Company

The Market Plan Essay for Freight Forwarding Company was derived through research conducted by our Marketing Department and supervised by me, as the Director of Marketing. In anticipation of this report, we researched our competitors using primarily Internet resources and gathered data to compare our competitors' practices and services to our own. In comprising the actual Market Plan Essay we obtained research from scholarly articles and/or essays. The areas that this Market Plan Essay will cover include: the Executive Summary, the SWOT analysis, the target market, the competitors' substitutes, the pricing of our services, our channels of distribution, and our promotional budget. Our Market Plan Essay revealed that our company's areas for growth consisted of customer service, value of services, and meeting our promotional budget and throughout this essay solutions are proposed for these issues. Furthermore, the information obtained and revealed in this essay provides us with a roadmap and a plan of action for the future to help ensure that Freight Forwarding Company remains vibrant in the freight shipping industry.

I. EXECUTIVE SUMMARY

As the director of the marketing department for Freight Forwarding Company, I present this Market Plan on behalf of my department. Months of research and analysis has led us to the conclusions found within this Report and it is our goal to improve our Company's overall advertising of its services, customer demand for services, output of its services, and the stream of incoming revenue for our company. Our Market Plan addresses the pertinent areas that formulate the basis for the success of our company.

Specifically, this Market Plan examines the following area as it relates to Freight Forwarding Company: 1. Services description situational analysis (SWOT): What services we deliver and how we currently deliver them. We will examine the strengths, weaknesses, opportunities, and threats that currently exist for our company. This report will propose solutions on how to maximize the strengths, decrease and counter the weaknesses, exploit our current opportunities that will maximize our success, and counter the current threats that threaten our companies continued success. 2. The target market: We will examine who our target market is and what their current needs and demands are. This report addresses how we can better serve our target market and increase business among them. 3. The competitors' substitutes: We will thoroughly address who are competitors are, what services they offer, and how we can tailor our services uniquely to suit our customers' needs while distinguishing our services from those of our competitors. 4. The pricing of our services: We will address what our current prices are and how they currently compare with those of our competitors. We will also address how we can better market our company through promotional rates. 5. What are the channels of distributions: We will address how our currently services are advertised and delivered to our target market and how we can better improve on this delivery, 6. Our promotional budget: We will present an example of our promotional budget for the upcoming fiscal year and examine the strengths and weaknesses of such.

After thoroughly researching each of these categories, we have determined how Freight Forwarding Company can improve its profitability in terms of consumer demand and make our company more attractive than its competitors. While in the past we did not always do so, we now propose a customer centered approach. We believe that understanding the needs and demands of the customer and focusing on delivery of such is what makes a company successful.

II. SERVICES DESCRIPTION AND SITUATIONAL ANALYSIS (SWOT)

Overview of Our Services:

Freight Forwarding Company was established in 1987 as a freight distribution company in Los Angeles California. Southland Distribution, Inc. (2007). We currently have 120 employees both full and part time. We offer services throughout the continental U.S. And Canada and we offer services by air, truck, and rails nationwide. Southland Distribution, Inc. (2007). Our air and rail services are contracted through various companies. Each year, we ship millions of pounds of freight for our consumers. We provide a quality guarantee that the customer's merchandise arrives at its destination damage free, and we also provide insurance for our customers, which we highly recommend. We operate our services 24 hours per day seven days a week by air, truck, and rails. Our company specializes in shipping freight for businesses and the customer is charged by the pound and based on how opt to have their goods shipped and the speed at which they choose to have them shipped. We offer free tracking to our customers and guarantee that their goods will arrive on or before their scheduled time. Southland Distribution, Inc. (2007).

All claims regarding liability must be made within seven (7) days of the shipment completion date. Our company requires that each of its customers submit a waiver acknowledging that their goods are free from damage prior to shipment. Southland Distribution, Inc. (2007). In the event that a claim surfaces Freight Forwarding Company provides numerous insurance options for its customers to cover their losses. We encourage all customers to understand that it is our goal to provide quality services that exceed their expectation while at the same time understanding the risks and limitations involved when hiring a shipment company.

Our Company's Strengths:

In anticipation of this Marketing Plan, our marketing department surveyed each of our 120 employees regarding our company's strengths and weaknesses. We then elicited research surveys from customers that have obtained our services in the last year. Our goal is to compare our responses with those of the customers to obtain a well rounded data that encompasses internal and external perspectives.

The results of our company survey revealed our strengths as: Quality of services, value of services, and customer service/understanding the customer's needs and providing them.

Based on our customer centered approach, we conducted our customer survey in a more detailed format and calculated percentages of the customers that responded in each area. The question was posed to the customer in the following format: "Having recently received services from the Freight Forwarding Company" what, in your opinion, are the company's strengths?" The survey was conducted from a random sample of 100 customers and the results are as follows:

44% of customers surveyed stated that they believed that the Quality of our Services were our company's main strength. One customer wrote, "I felt confident entrusting my goods to Freight Forwarding Company. They provided step-by-step consultation of the services that they provide and a complete description of how they would make the delivery. I was able to track where my goods were at all times and my goods arrived on time in perfect condition. I will definitely hire this company for all of my future shipping needs."

20% of customers surveyed stated that they believed that our Customer Service were our company's main strength. One customer wrote, "My questions were answered in a timely and professional manner. This is the first time I have used shipping services, but not at one time did I feel lost in the process. The customer service representatives were knowledgeable on the services and eased all of my concerns regarding the process."

20% of customers surveyed that they believed that the Value of our services were our company's main strength. The Value of our services is the considered as the cost of the services that we offer compared with the actual service that the customer receives. One customer wrote, "Compared with companies that offer the same type of services, Freight Forwarding was very competitive in their prices."

14% of customers surveyed stated that they believed that the Efficiency of our services were our companies strength. Efficiency of service was described to the customer as how fast the goods arrived at their destination compared to what the customer's expectations and needs were. One customer wrote, "I needed to have my merchandise at their destination within one week of the time they were shipped. Freight Forwarding Company was able to meet my needs by air. I was able to get the goods immediately shipped and they arrived on time. Other companies could not get my goods immediately shipped." Other customers' responses to the survey regarding our company's strengths included the methods of shipping/modes of services.

Our Analysis of Customer Responses:

Our marketing department, based on the customers' responses, concluded the following: The majority of our customers were satisfied with our quality of services. Most of our customers are pleased with the method in which their goods are packaged and shipped, that their goods arrived safely and damaged free, and that, in the event that there was an issue with damage, our insurance options provided the requisite coverage. We believe that overall the quality of service that we provide meets the customers' expectations, although we strive to increase customer satisfaction in this area as the number still fell below 50%.

One solution we have proposed to increase our quality of service is to note all the situations when our quality of services fell below customer satisfaction and analyze our company's responsibility for this situation. For example, if a customer is displeased with the condition of their goods on arrival, we would evaluate whether we could better secure the customer's goods or what other options exist that is within our control for reducing these incidences.

Regarding the customer responses to the quality of our company's customer service, our department is concerned that only 20% of the customers surveyed that they believed that customer service was a strength of our company. To address this issue, we have instituted additional training sessions for our customer service team along with recording system that records customer calls. We are proposing a budget increase in availability of customer service representatives including the possibility that they work from home. Further discussion of the our company's customer service will be addressed in subsequent sections of this Market Plan.

That only 20% of our customers believe that the value of our services is a strength also concerns us. Over the years, we have given much attention to providing superior value to our customers, but we believe that the results in this area are directly related to our competitors and what they are offering. Our solutions to increase this statistic include strategically incorporating promotions during the seasons in which our customers less likely to use shipping services with the expectation that they hire the service to take advantage of the promotion. This plan is still being researched for implementation and likelihood of its success.

Additionally, our marketing department is currently researching how we can increase our company's efficiency. Based on the customer responses, we believe that while 14% of customers viewed customer efficiency as a strength, we believe that anything that falls below 50% is a weakness. We currently offer services by ground, air, and rail and our services are offered based on customer needs. Again, we are currently examining how our competitors' services are affecting our numbers in this category and working to distinguish our services from those of our competitors. For example, we currently contract our air and rails services to different carriers. I, as the Director of the Marketing Department, recently met with the Director of the Finance Department and shared our concerns regarding our customers' responses in the area of efficiency and value. Our finance department is in the process of researching how we can maximize our allotted budget in this area -- perhaps a renegotiation of our existing contracts will become necessary order to provide more availability of air and rail options to our customers.

Our Company's Weaknesses:

In anticipation of this Marketing Plan, we then obtained results from our company's employees regarding what they perceived as our company's weaknesses. Our employees responded that they believed that our primary weaknesses were the value of our services as compared to that of our competitors. Their main concern is that our company's brand is still being established as we are still a growing company, but we do not offer promotions frequently enough to draw business into the company to distinguish us from our competitors.

Next, our customers were surveyed obtain their feedback on what in their opinions were our company's weaknesses. The question to the customer was phrased in the following terms, "Having recently received services from the Freight Forwarding Company" what, in your opinion, are the company's weaknesses?" The survey was conducted from a random sample of 100 customers and the results are as follows:

44% of customers responded that they believed that our company's Value was our company's main weakness. One customer wrote, "I did not believe that Freight Forwarding Company initially offered competitive rates compared with other companies. I managed to negotiate the price down significantly, however, had services been available through Wilson Trucking Corporation, I would have chosen them because they offered more competitive rates."

39% of customers surveyed that they believed the our company's Customer Service was our company's main weakness. One customer wrote, "Whenever I called the customer service line, I was placed on hold for an extended period of time. It was extremely difficult to speak to a live person, but I managed to find what I needed on the website, which is very user friendly and helpful."

10% of customers surveyed that our Quality of Services were one of our company's main weaknesses. One customer wrote, "20% of my goods arrived damaged. I know that there is always a risk when you are shipping goods; however, I believe that Freight Forwarding was in some way negligent in the way that they packaged the goods. The company was very good in working out solutions to the problem and luckily I purchased the requisite coverage for my loss."

Other customer responses in the category of customer weaknesses were: Location of services offered and efficiency of services offered.

Our Analysis of Customer Responses:

44% of our customers believed that our company's primary weakness was the value of our services. This concerns us since we are aware that competitors are numerous and that in the Freight Shipping Market the value of the services influence the customer as the customers are not generally bound by notions of loyalty. As mentioned earlier, we are currently collaborating with our finance department regarding the results and implication of this Market Report. While I will avoid a complete discussion of financial details in this Market Report, and defer to our finance department to fully discuss budgetary concerns, I am of the opinion that our rail and air services are contracted and that a renegotiation of these contracts may result in more affordable services for our customers. This was brought to the attention of the Director of the Finance Department and has been listed, to my understanding, as an upcoming agenda item.

39% of our customers believed that our customer service was our company's weakness.

As a follow up to this startling number, I placed a call, posing as a customer, to our customer service department. I was placed on hold for 8 minutes. When my call was answered, I inquired regarding what type of services Freight Forwarding Company offered. The agent, thereafter curtly but proficiently, answering my questions, directed me to the website for further details. I stated that I did not have access to a computer and that I wanted her to help me decide on which service was right for me. She proceeded to assist me and ultimately I was satisfied and felt as if I could intelligently proceed with placing my order.

With this in mind, our one concern is the length of time I was placed on hold. After researching how many agents we have on staff. The findings were that we have 4 full time employees and 9 part time employees who work only nights and weekends working in our call center. Customer service calls come in at a rate of six (6) per minute and are approximately 12 minutes in duration. I concluded that our customer service department is either not sufficiently staffed to meet the needs of our customers or the scheduling of our customer service representatives is not balanced to meet the calling needs. While we offer significant tracking and informational services through our website, many customers (such as me when I posed the call) would still prefer to speak to a live representative or are not prepared to access our website.

The solution, once again, lies in what our budget is able to sustain. Based on this research, our company is now in the process of proposing solutions to extending its customer services while at the same time remaining within the allotted budget. I met with the customer service supervisor and the current solutions that we are working on are among others: providing extended customer service by permitting the agent to work from home, and upgrading our website to offer a live chat option. We concluded that while some customers may not feel equipped to navigate our website, they may be less hesitant to speak to a virtual representative. Research is currently being conducted regarding the budgetary implications of this upgrade to our website.

Opportunities Available in the Freight Shipping Market

In light of the current economic recession, the new opportunities in the freight shipping market are questionable and have become highly competitive. Our opportunities have traditionally come from businesses seeking to ship cargo from one business location to a remote business location. For example, in the past we have serviced furniture stores, department stores, sporting goods stores, and auto companies. These companies have generally hired our services to transport their raw goods from their factory to the assembly plant or from the assembly plant to the location in which it will be retailed and sold. In light of the economic crisis, our contracts from auto companies have been greatly reduced over the last year. For example in 2006, we had 11% of our contracts with auto companies requiring shipment of their auto parts or their assembled cars. In 2009, this number was reduced to 3% or the equivalent of 1 contract. We conducted research to determine the cause of this decline in contracts within the auto industry. The result was directly related to economics.

On the other hand, our current a majority of our current opportunities exist in within the restaurant and various retail industries. In anticipation of this Marketing Plan, we conducted field research of 500 companies from various industries to determine which industries would be most likely to make use of our services for the future. The survey was created by a marketing committee comprised of members of our marketing department. The final survey was approved by me in my capacity as Director. The surveys were administered by phone. The results were:

Industry Type

Percentage of businesses surveyed that have used freight services such as ours in the past?

Percentage of businesses surveyed that anticipates a need for freight services in the future?

Automobile

94%

40%

Restaurants

91%

86%

Retail/General

96%

90%

Retail/Home furnishing

98%

85%

Retail/Grocery

92%

90%

Construction

43%

19%

Personal/Moving services

22%

12%

Contracting companies (plumbing, electric, etc.)

56%

45%

Health care (hospitals, nursing homes, etc.)

30%

30%

Farming/Agriculture

18%

18%

Government

12%

12%

Analysis of Opportunities:

Based on the above data, opportunities for our company exist primarily in the industries of all types of retail and restaurants. Because of this, we have begun to develop a marketing strategy to target these industries and companies within them. Our future advertisements, while not completely eliminating the other industries that are potential customers for us, we will focus on drawing a majority of our business from the industries that are more likely to hire our services.

Threats to Our Business:

In determining which threats exist to our business, we considered environmental factors that pose threats to our business. The immediate threat to our business is the economy. We know that because of the recession, many of our former customers have suffered a reduction in demand for goods by their customers and, therefore, have a lessened need for our services. To illustrate this point as part of the market research conducted, we interviewed several customers from the industries listed above -- in particular the ones that reported that they will have a diminished need for our services in the future. We spoke with Lawson Wilson, the owner of Wilson's Construction Company, who had been a regular customer of ours in the past. Mr. Wilson reported to us during our survey that he would likely not make use of our services in the near future. When our team inquired as to why his company was experiencing a diminished need for freight shipping Mr. Wilson stated, "Our business is low. Because of the recession, we have less contracts to fill and people are not building homes like they were in the past."

Similarly, to illustrate that the economy is a major threat to our business, we spoke to Laura Richardson, an executive of U.S. Motors who had acquired several contracts from 2001-2005 for shipment of car parts into their factory. U.S. Motors currently has no active contracts with us. Mrs. Richardson responded, "The auto industry has hit a plateau. People are not buying cars like they used to and we have had to close several of our plants. We don't have a need for your services like we did in the past, and honestly we don't know when this is going to end."

As these customers illustrate, the economy is the currently greatest threat to our business and our marketing team is at work to determine how to counteract this challenge. As I mentioned earlier in this report, we have targeted our services to the industries that currently have the greatest need for our services -- the restaurant and retail industries. Our goal here is to provide the services to the industries that have the greatest need for them until the economy can rebuild.

III. TARGET MARKET

In light of the fact that the restaurant and retail industry currently have the greatest need for freight shipping services at this time, they are currently our target market. We strive to provide services to not only the smaller restaurants, but to the franchises as well. The restaurant industry has made use of our services in the past primarily for shipment of their equipment, furniture, goods, and food products. The current needs are similar to those of the past and fortunately, the customers that have held contracts with us in the past have either renewed their contracts or have indicated to us that they will have a need for our services in their near future. In spite of the downward turn of the economy, business from the restaurant industry is promising and steady. We currently have six (6) active and lucrative contracts from restaurants.

Our other target industry is the retail industry. While not as steady as the restaurant industry, the retail industry demonstrates a need for freight services particularly during the holiday season and other high demand shopping seasons. In the past, retail stores have utilized our services to ship clothing, household goods, and electronics (parts and assembled goods), among other items. Since we are in the midst of the holiday season, we are currently working on 18 contracts from retail stores nationwide. Like the restaurant industry, we target small retail establishment and as well as the larger ones. The caveat with the retail industry, however, is that the business is not static. Once the holiday shopping season ends, we will experience a drastic downturn in our retail contracts -- one that will continue until the next high demand shopping season. It is our goal, however, to maintain the business with the current customers even if the demand does not currently exist. We will continue to target the retail market year round with the expectation that when the demand for shipping services increases, they will return as customers.

IV. COMPETITORS SUBSTITUTES

In the freight shipping industry, there is endless competition for business. Our competitors offer similar services to ours. A inquiry on "Freightquote.com" revealed that there are approximately 30+ companies offering the same or similar type of service that our company offers. Freightquote.com (2010). It is our goal at Freight Forwarding Company to offer incentive for our customers to choose our services over those of our competitors. Our marketing, researched the services that each of our competitors offered and what would be included with the service. Our goal here was to gather information to compare with our company's services with the hopes of gaining a competitive edge. Our marketing team focused on five companies -- Wilson Trucking Corporation, Old Dominion Freight Line, Southeastern Excelerated, UPS, and FedEx. Our representative submitted the following inquiry:

The shipment will consist of 750 pounds of goods on a pallet from Fort Lauderdale, Florida to Atlanta, Georgia. Our representative requested regular rather than expedited shipping and declined insurance. The shipment would be ready for pick up on tomorrow and would be picked up from a business with a dock or forklift. The goods being shipped were new commercial goods and the shipment would consist of four packages of a 48" by 40" dimension. The assigned freight class is 50 and none of the materials are hazardous. Freightquote.com (2010). For each of the five targeted companies, the submitted orders were identical.

In addition to the standard shipping services, each of the companies targeted offered special services along with the shipping. The offers consisted of 1. Collect on Delivery -- the driver would collect a payment to send back to the customer, 2. Blind shipment -- meaning to keep both locations unaware of the other's existence and, 3. Call before delivery -- to make sure that someone is available at the delivery location. Freightquote.com (2010). Neither of these three special services was submitted as part of the inquiry.

The services offered by Wilson Trucking Corporation would consist of a two (2) business days shipping time by ground. There total price was $213.78 for the regular two (2) business day shipping and was the most competitive of the companies contacted. Wilson Trucking also offered a guaranteed two (2) business days shipping service for $223.13 which is also a highly competitive rate for the type of order submitted and was the best guaranteed shipping rate offered. Freightquote.com (2010).

The next company that we obtained information from was Old Dominion Freight Line. For the order requested, they offered a one (1) business day shipping for the same distance and their quoted price was $270.58. This one day offer was not guaranteed by the company. Old Dominion did offer a one business day guaranteed rate of $360.32. This was the only one (1) business day guaranteed rate offered by ground. Freightquote.com (2010).

The next company researched was Southeastern Excelerated. This company offered a two (2) business day delivery service guaranteed to arrive by 5PM at the quoted rate of $308.97. This is the only company that guaranteed delivery by 5PM on the day of pick-up although our research uncovered that one other company, Saia Motor Freight, offered a two (2) day delivery by 2:00PM at a rate of $354.62. Freightquote.com (2010).

We next researched our larger competitors UPS and FedEx. UPS for the service in question offered service in two (2) business days at $321.86. They also offered a two (2) day guaranteed service at the rate of $406.46. Freightquote.com (2010).

FedEx offered three options for ground services -- the most of any of the freight shipping companies. The first option which is the slowest delivery time of the three was FedEx National LTL which would provide three (3) business day shipping at a rate of $416.77. The next option is Fed Ex National LTL GQS which is the guaranteed three (3) day delivery time. This option is offered at a rate of $506.51. The final option offered by FedEx is the FedEx Freight service which is two (2) business days guaranteed. The rate for this service is the most expensive of the ground services for this particular order at $541.53. Freightquote.com (2010).

Finally, in examining our competitor's substitutes, we researched the air shipping rates for the same order. The rates by air ranged from $981.99 for a five business day shipping to $4,870.87 for next day guaranteed shipping by air. All of the air shipping services are offered through the carrier Freight Quote Advantage. Freightquote.com (2010).

Our research of our competitors revealed, not only the services offered, but the options in which each company provides. We discovered that for the same service, our competitors' prices varied $320.00 from the least expensive to the most expensive. The five companies that we targeted, Wilson Trucking Corporation, Old Dominion Freight Line, Southeastern Excelerated, UPS, and FedEx while each providing service for the same freight order, each provided something that distinguished their service and made it more competitive. Some offered guaranteed shipping, others offered quicker shipping, some offered a wider range of shipping options, while some provided a distinguished company brand, and one offered the most competitive rate. Through our research, we became aware who our competitors are, the service options they provided, and what we need to continue to do to remain competitive in this market. Freightquote.com (2010).

V. PRICING

In the previous section, we discussed the pricing of our competitors' services for an order of 750 pounds to be delivered from Fort Lauderdale, Florida to Atlanta, Georgia. Our competitors' prices ranged from $231.78 to $541.53 for two day shipping. Freightquote.com (2010). Freight Forwarding Company provides the same service for the requested order in two (2) business days for $290.81. We provide guaranteed two (2) business day shipping for the order for $338.12. Our company's price for the two (day) regular shipping would place us 8th on the list among our competitors while the price for the guaranteed two day shipping places us 12th on the list among our 30+ competitors for general shipping prices for two days, and 4th on the list for guaranteed two day shipping.