Relationship Marketing – Parcel Force

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Unit 11: Relationship Marketing Use different techniques to identify perceived quality gaps for selected service/product. Parcelforce Worldwide was established in 1985, stand alone Business Unit in 1992. For over 14 years Parcelforce Worldwide has provided a vital link for British businesses needing to send express shipments internationally and in UK. It is part of Royal Mail Group Plc. Parcelforce Worldwide has 4.3% of market, Post Office Ltd 9%, GLS 15.9%, others 0.7% and finally Royal Mail Letters 70.2% of market. In a year 2000 Parcelforce reached the peak loses in profit of £193m which half of £1m the Royal Mail Group was losing a day. Ten years later these guys do a miracle and have profit on £20m, some people say that was impossible for them to do it but they did it. It wasn’t easiest road to victory but after hitting the bottom line they got up. Parcelforce saw revenues rise by 5% to £420m, volumes in the highly competitive business to business markets grew by 15% and Parcelforce Worldwide overall growth have shocked and surprised their key rivals. (1) It is amazing on how they have change throughout 10 year time and gain profit. One thing they have done is the strategy change on how they are operating the business. In 2001 the business cost were jet high which meant money goes out of business and business is struggling whereas after 10 years the costs has been reduced to competitive costs. In 2001 the customer service were poor, meaning that people were not satisfied on how company delivered their packages. They have changed that and has become customer friendly business with next day delivery improved to 97.7%. The prices for parcel were low but the volume was high, the changed that other way around the prices per parcel is higher with fewer parcels to send. Also instead of having more than 10 thousands employees they have reduced to 4 and half thousand which saves business money. Which after all these improvements have increased their market share to 16% from 14%. (2) These are the key factors throughout which they have improved their business there are three main quality techniques through which Parcelforce also have improved business: Benchmarking, Gap Analysis and Quality Circles. Benchmarking- It is a technique through which business is comparing their business to key competitors. This is to discover where they should be/how to improve the performance. There are currently about 20 national companies and 10 international companies who are operating express delivery services in the UK. However, there are over 4,000 local companies. 50% of the UK market accounts 10 operators. Over half of the market belongs to around a thousand small companies, which none of them even have 1% market share. This over-capacity in the parcel market, combined with the low switching cost to customer, has resulted in fierce competition. Parcel force is named the UK’s largest parcel firm, but it only has 16% of the market compared to its nearest rival Securicor of 9%.

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