Len Hostetter - FedEx Services

FedEx: Focusing on the FutureLen Hostetter

Vice President, FedEx Brand Engagement Marketing

June 24, 2010

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Executive Summary

June 2010Focusing on the Future AMA Conference

The FedEx Brand

FedEx Customers, the present & future

EarthSmart

Social Media

Conclusion

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The FedEx Brand

FedEx is now 36 years old. When FedEx began operations: – First -class postage was eight cents– Oil embargo sent gas prices skyrocketing to 55 cents/gallon–We only served the U.S. then and were shipping 150K packages per

day. We had $750M in revenue but our goal at the time was to be the first company to reach $1B within 10 years

We reached that $1B mark and today our revenues are $35B and we handle over 8M shipments per day. We also:– Serve more than 220 countries/territories– Handle almost 95% of world’s GDP in 24–48 hrs– Have 275K fantastic team members worldwide– First-class postage, has gone from 8 cents to 44 cents and the days of

55 cents-a-gallon gasoline is long gone


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The FedEx Brand

Today, I want to share with you how we manage the FedEx brand in this fast evolving world and how we are positioning the brand for the future

We aggressively manage our brand – it doesn’t happen by accident. We manage it, measure it and monitor it. We never take our leadership position for granted and know that we must stay relevant for the future

We manage our brand through:–Our People –Our Service –Our Go-to-Market strategy


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FedEx Customers, the Present & Future


FedEx is focused on three distinct generations of current and future customers:– Baby Boomers (46-64 years old)– Gen X (31-45 years old) – Gen Y (10-30 years old)

Customers in these three groups have different perspectives which effect their approach to decision making and loyalty to brands

Our goal is to understand them and make sure our brand is relevant to them all

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Three “generations” of customers are important near term

Source: National Center for Health Statistics, 2002


46-64 years old 31-45 years old 10-30 years old

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“When I first joined the workforce, my office looked like this…”


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What Matters to Future Generations


In order to be relevant to future generations we must focus on what matters to them

More than ever being an environmentally responsible company is important to all three generations, especially Gen Y

Gen Y expects connectivity: – In their personal lives– In their workplace– And from brands they do business with

Today we will look at a few of the ways that FedEx is addressing those needs

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The environment is top of mind

Heightened business and customer awareness about the environment

Integrated into customer purchasing decisions

The environment has become a modern responsibility


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Sustainability is…

At the core of survival About doing more with lessDrives innovation and new product developments Encourages efficiencies


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Customers are demanding more

According to 2009 ImagePower Global Green Brands Survey, consumers say:– It’s important for companies to be green– They will spend more on green products

in the coming year– Trust a variety of sources to inform their

green purchase decisions– Expect companies to take

comprehensive environmental action

No company has established itself as a dominant global green brand, but many are recognized in specific markets


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The competition is moving

Domestically and internationally, our competitors are aggressively marketing their sustainability efforts– UPS Decision Green

Reusable envelopes Carbon offset shipments

– DHL GoGreen 100% recycled content packaging

line Carbon offset shipping

– TNT Planet Me Code Orange carbon count


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FedEx recent accomplishments

FedEx Ground installs the nation’s largest rooftop solar-electric system at the distribution hub in Woodbridge, N.J. – The 2.42 megawatt solar-electric system covers approximately 3.3 acres of rooftop

space with approximately 12,400 solar panels– The system is capable of producing a projected 2.6 million kilowatt hours of

electricity a year and could provide up to 30 percent of the hub’s annual energy needs

FedEx acquired 11 Boeing 777 aircraft that provide greater payload capacity– Using 18 percent less fuel than planes in our current international fleet– These replacements will also significantly eliminate carbon emissions that would

have otherwise occurred


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What you do isn’t enough - It has to be communicated

Brands need more sophistication in their communication approach What we say and how we say it are critical to protect the brand– FedEx Sustainability Messaging Platform

Thoughtfully Transparently/no greenwashing One voice

We must align the FedEx environmental messaging platform across– Marketing– Corporate Communications– Operating companies

– Regions


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EarthSmart is how we will support our commitment


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EarthSmart Goals

Differentiate - Differentiate FedEx as an sustainability leader and build internal and external brand by communicating about environmental solutions

Innovate - Recognize and encourage innovative ideas and solutions around FedEx strategic environmental areas

Align - Facilitate the connection between our business, sustainability and workplace strategies

Communicate - Tie FedEx environmental programs under one communications umbrella

Be Credibile - Ensure that environmental improvements are credible, quantifiable and realized

Integrate- EarthSmart must be embraced corporate-wide


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EarthSmart is flexible

Program FocusHow Team Members Are

EngagedResponsible Group

EarthSmart Solutions

Innovation & Branding program

Allows team members to submit innovative ideas. Sustainability

Global Brand Management

EarthSmart @ WorkEmployee Engagement

Integrates sustainable projects and programs into the way we work.

Collaborative effort led by Workplace Comms

EarthSmart Outreach

Philanthropy and Volunteering

Allows team members and FedEx to contribute to the community in environmentally-focused ways.

Global Citizenship


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EarthSmart is flexible


June 2010

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EarthSmart is action

“I don’t need fuel to cover my route.”


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EarthSmart is empowering

“I am EarthSmart.”


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EarthSmart is commitment

“I choose FedEx because its values align with mine.”


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Social Media

In order to be relevant we must communicate in new ways Today, Small Businesses are investing over 37% of their media

dollars in the interactive space while large corporations are currently averaging 13% (Forrester Research)

Our Go-to-Market strategy is to “fish where the fish” are –When you look at customer expectations, 42% of online adults said

they expect to engage with their favorite brands through interactive channels – New consumers today don’t know about our history and haven’t seen

our classic commercials. We’ve got to reach them in new spaces


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I AM FedEx

I AM FedEx is an internal and external campaign that was designed to honor our people, celebrate their stories of personal and professional achievement and define them as the differentiator that makes FedEx one of the most admired companies in the world

Campaign includes videos, posters, and podcasts hosted on iamfedex.com

Site acts as a media distribution point for other channels:– Internal (fedexcares.com; earthsmart.com; csr.fedex.com)

- External (Facebook, YouTube, Twitter)


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Click Image to View

Coach DaveI am FedEx: Videos


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You Tube Advertising Videos

For the first time last year, we distributed a brand messaging campaign solely via digital video content on YouTube, which was called “1-2-3 Succeed”

We received 1 million views in six months, well ahead of our goal

FedEx is also encouraging our audience to interact with and distribute these videos through blogs, embedding and social networking – This means we’re spending less to reach more of the people that we really

want to reach


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1-2-3 Succeed Video


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Summary

In conclusion, we’ve worked hard at our brand management, and FedEx is one of the most respected in the world. Recent accolades include: – 7th in Fortune’s World’s Most Admired Companies, 2009– Fortune’s “100 Best Places to Work,” 2009 (12th time in 13 years)

We never take our leadership position for granted. We must stay focused on the future and on the demands of our future customers.Some of this year’s accomplishments include:– Achieving an 8.33 percent reduction of aircraft emissions intensity since 2005– Increasing vehicle fuel efficiency by about 14 percent– Connecting with our customers through social media to engage them, learn about

their needs, and deliver on our promise


Len Hostetter - FedEx Services

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