Marketing 101: Fed Ex
The Marketing Doctor Says:
FedEx Does It Again!
FedEx has just announced a major name change: it’s getting rid of the Kinko’s name extension in its ship centers. Here’s that story.
After a few posts covering logo and branding misfires, it’s good to be able to report this story on one of the most successful (and successfully branded) companies around: FedEx (read more about this company’s fascinating history here). FedEx which has never made a serious branding misstep that I can think of is shoring up its brand with this necessary adjustment. Fact is, the FedEx name means efficiency; the Kinkos name does not, but Kinkos, as a company, had something to add to the FedEx stable: store fronts that bring 1 billion plus in shipping revenue a year. They also had their name to add and the combination was a clunker! The name was too long and that’s a real no-no in brand and company naming. In this sense, the Kinko’s brand was taking away from the FedEx brand (but only –as it turns out— for the short run).
Ultimately, this is an excellent Marketing 101 example of how branding can sometimes work with a bottom line business decision. Technically this is a brand extension. There was no one but Kinkos in the marketplace who could offer FedEx what FedEx wanted, a bricks-and-mortar presence to connect with consumers –which is precisely what FedEx was always lacking. And from a strictly profit and loss perspective, buying Kinkos was cheaper than starting their own storefront print and ship centers.
For Kinkos, on the other hand, you could call it a “reverse” brand extension since while it could lead to more locations… well, they’re ultimately not the Kinkos brand but a ship center with other services thrown in. Remember, the chief competitor of the combination is The UPS Store.
The business equation was clear because of the increased package traffic for FedEx but the branding part of the equation was not. From the start it was obvious that the brands didn’t really go together even if the businesses did.
My guess is that FedEx knew from the start that it was only a matter of time before the Kinkos name was no more –keeping the Kinkos name for a while but adding the FedEx name probably served to keep the identity of the Kinkos business in the target market’s head while injecting some FedEx brand strength for the short haul before the brand transition was complete. Since FedEx was doing something entirely different here (operating a bricks-and-mortar store) it needed time to get its target market used to this concept.
This is textbook on how to do things right! I’ve always loved this brand –even with their glitchy website— and the Marketing Doctor would expect nothing less from FedEx who you can always count on to get the details right and the package there on time!
And, remember, it’s always easier when you keep branding in mind!
TODAY’S TANTILLO TAKEAWAY –
Sometimes a brand extension should be implemented slowly and incrementally, especially if the extension is a real stretch for the brand’s business.