During nearly four decades of business operations, Memphis-based FedEx has earned a reputation for reliable, on-time delivery of packages to homes and offices around the country. Founder Fred Smith originally focused on overnight deliveries, choosing Memphis as the company’s headquarters because the airport rarely closes due to bad weather. With FedEx’s planes departing and arriving on schedule nearly all the time, its express shipments usually remained on schedule, then and now. To reassure customers that delivery will take place when and where promised, the firm offers a money-back guarantee on time-sensitive express shipments, among other services.

FedEx has steadily expanded its portfolio of services since the 1970s. Its original overnight express delivery is currently available to U.S. customers in various forms, including “first-overnight” delivery, next-morning delivery, next-afternoon delivery, and budget-pleasing two- or three-day delivery. The company’s services also include cost-effective ground delivery for parcels and extra-speedy same-day delivery for urgent deliveries within 1,800 cities.

Questions for Discussion

1. How does FedEx’s money-back guarantee address customers’ concerns about heterogeneity

2. Are FedEx’s services more closely associated with experience qualities or credence qualities? What are the implications for the company’s marketing activities

3. What are the customer-contact pros and cons of FedEx offering package pickup and drop-off through local locations of Walgreens, Kroger, and other retailers