United Parcel Service (UPS) Marketing Strategy & Marketing Mix (4Ps)

Published by MBA Skool Team, Last Updated: August 31, 2021

Marketing Strategy of United Parcel Service (UPS) analyses the brand with the marketing mix framework which covers the 4Ps (Product, Price, Place, Promotion). There are several marketing strategies like product innovation, pricing approach, promotion planning etc. These business strategies, based on United Parcel Service (UPS) marketing mix, help the brand succeed.

United Parcel Service (UPS) marketing strategy helps the brand/company to position itself competitively in the market and achieve its business goals & objectives.

Let us start the United Parcel Service (UPS) Marketing Strategy & Mix to understand its product, pricing, advertising & distribution strategies:

United Parcel Service (UPS) Product Strategy:

The product strategy and mix in United Parcel Service (UPS) marketing strategy can be explained as follows:

United Parcel Service or UPS is one of the world’s leading courier, freight and logistics company. UPS aims at providing focused services which are present in various segments such as consumer services, industrial manufacturing, professional services, healthcare, retail and even aerospace. The UPS products and services in its marketing mix are divided majorly into Global Small Package delivery services and Supply Chain & Freight services.

The Global Small Package delivery services of United Parcel Service are further divided into US domestic package delivery and International package delivery services. In the domestic segment it provides time bound delivery services. These packages are money-back guaranteed. Further the delivery period can be chosen from either of same day, next day, two day and three day options. UPS also has another economical option for lightweight mails by ground. In the international segment that are Express Critical, Express Plus, Express and Express Saver, Standard, Expedited which are different products based on the basis of urgency of delivering the packages and weight of the packages.

The Freight services of UPS have services such as Air Freight, Freight, Less-than-truckload shipment services which again differ majorly by the load of the delivery and also delivery duration. United Parcel Service also has other services such as freight forwarding, truckload freight brokerage, logistics and distribution services, customs brokerage services. It also has another arm UPS Capital which provides financial services related to the supply chains it is handling.

Apart from all the major services United Parcel Service provides value added services such as door to door delivery services, pick-up services, online package tracking, electronic billing, technical support, and other shipping solutions for small businesses.


Image: Wikimedia


United Parcel Service (UPS) Price/Pricing Strategy:

Below is the pricing strategy in United Parcel Service (UPS) marketing strategy:

UPS follows a competitive pricing strategy as there are many competitors.

The pricing policy in its marketing mix for the packages vary on the distance of transportation, time of delivery, dimension of the product, weight of the product, value of the product and other value added services. The rate also includes fuel surcharges and other handling charges. A typical 2 pound Express small parcel will cost approximately $25 for three day delivery. The international packages on top of the above charges has premium price and depends on the region it is being shipped to. The freight services of United Parcel Service is the bulk services in which a higher quantity has to be transported. The price has base rate which has season surcharge, security fee and other handling charges. It also has customs duty and other clearance charges options.


United Parcel Service (UPS) Marketing Strategy comprises of not only its Marketing Mix, but also segmentation, targeting, positoning, competition and analysis like SWOT. Also read United Parcel Service (UPS) SWOT Analysis, STP & Competitors

United Parcel Service (UPS) Place & Distribution Strategy:

Following is the distribution strategy in the United Parcel Service (UPS) marketing mix:

UPS has a very wide global distribution coverage in over 220 countries. There are more than 950 field stock locations and 5 central stock locations spread across 120 countries which handle inventory, packaging, shipping and other critical order fulfilment. United Parcel Service also has 35 million square feet of warehousing facilities which aid the logistics services. The delivery is done by 100,000 package cars for its domestic delivery services which carry out door to door delivery services. UPS has also got tractor trailers which handle the ground delivery services in the domestic region. In the ground services it has also tied up with various railroad companies for cargo transport. The main source of transport is still the in-house large fleet of cargo airlines which aids its worldwide package deliveries. United Parcel Service currently owns 200+ aircrafts.

It has a well-established website and mobile application which makes consumer accessibility easier and tie-up with various payment services makes payment convenient.


United Parcel Service (UPS) Promotion & Advertising Strategy:

The promotional and advertising strategy in the United Parcel Service (UPS) marketing strategy is as follows:

UPS does its majority of its promotions through advertisements on it websites through the various advertisement campaigns to make the customers aware of its new initiatives. United Parcel Service also uses the print media to show its brand presence and for the purpose of brand recall. UPS also offers various bulk discounts and subscription discounts to its customers which depends on the size of the orders. The UPS delivery vans with the unique brown shorts uniform of the employees is also a way of promoting the brand as these have maximum access across the countries even into the inner pockets. It also has tied up with leading ad agencies for its various ad campaigns which shows the reputation of UPS as one of the leaders in the delivery business. United Parcel Service also engages in community activities through voluntary services by its employees which shows its concern for the society. As a part of its marketing strategy, UPS advertises via TV commercials, print ads, online advertisements, social media engagement, digital marketing, sponsorships and much more.


Since this is a service marketing brand, here are the other three Ps to make it the 7Ps marketing mix of United Parcel Service (UPS).


People:

United Parcel Service has an employee base of 400,000 who are present across global locations. The UPS employees has a mix of full time and part time employees as the season decides the bulk in the delivery business. The employees can be further segregated into delivery personnel who are either in the form of ground delivery personnel such as the mail men for on door delivery services and other personnel who transport it across the countries. United Parcel Service also has pilots for the air cargo divisions. UPS also employs many dedicated personnel for its solution providing and brokerage business. UPS takes utmost care for selection of its employees as the employees are responsible for building the brand and have remained loyal to the company.


Process:

UPS is a technology enabled company and almost all the processes are governed by various tools and other solutions. The various functions of United Parcel Service which are enabled by technology are shipping, tracking, international trade, electronic billing, mobile applications, and business-to-consumer solutions. The UPS company also believes in innovations in its product offerings and had come up with mail innovations which provides cost efficient way of sending small parcels. It also continuously innovates to make its logistic and the supply chain more efficient and streamlined to reduce to costs and generate more revenue. United Parcel Service takes care of the pick up as well as delivery and all the in-transit services and hence makes the customer experience very smooth and efficient. Even initiating the mail services is enabled by mobile applications. The UPS employees are also trained with technology continuously so that there is very less loss in business and they can gain the profits quicker.


Physical Evidence:

The UPS customers get customized services according to the requirements of shipments. The parcel are picked up from the customer’s doorstep from the employees who are dressed up in the unique brow uniforms and iconic delivery vans which are a tradition for United Parcel Service. After the pick up the parcels are packed into appropriated boxes and shipped. In the meanwhile the sender gets receipts which can be kept as proof. The customers also get various insurance and damage coverages for their packages. The UPS customers also get a variety of value added services such as the customs clearance services, duty charges payment services as well as payment services which has been tied up with PayPal. The customer also gets tracking facilities for the couriers through the websites, mobile application and SMS. This completes the marketing mix of UPS.


About UPS (United Parcel Service):

United Parcel Service is the world leader in delivery package delivery industry. It is also a leader in a supply chain management solutions. It was established in 1907 and currently has its headquarters in Georgia, USA. UPS delivers packages every day to more than 8 million users across 200 countries worldwide. It has an annual revenue in excess of $70 billion. United Parcel Service is headed by David Abney the CEO and Scott Davis the chairman.

The major regional competitors of UPS in USA are FedEx, United State Postal Service, OnTrac, Eastern Connection and LSO. It also has many global competitors such as FedEx, India Post, Canada Post, Royal Mail, TransForce, DHL and Japan Post.

This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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