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Marketing Strategy of Coles Express Inc.

Marketing Strategy of Coles Express Inc.

Discuss Marketing Strategy of Coles Express Inc. within the Marketing Management forums, part of the PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT category; Statistics: Wholly Owned Division of Roadway Services, Inc. Incorporated: 1917 Employees: 400 Sales: $41 million SICs: 4213 Trucking Except Local; ...

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Marketing Strategy of Coles Express Inc.
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Anjali Khurana
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anjalicutek
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Marketing Strategy of Coles Express Inc. - December 15th, 2010

Statistics:
Wholly Owned Division of Roadway Services, Inc.
Incorporated: 1917
Employees: 400
Sales: $41 million
SICs: 4213 Trucking Except Local; 6719 Holding Companies, Not Elsewhere Classified; 5012 Automobiles & Other Motor Vehicles; 7538 General Automotive Repair Shops


Company History:

Coles Express Inc. is a comprehensive motor transportation and trucking service operating in the New England region of the United States. The company was purchased by Roadway Services in 1993, as a part of that company's efforts at geographic and service expansion through acquisition. In 1995, Coles Express was providing trucking services throughout Massachusetts, Connecticut, Rhode Island, Maine, Vermont, New Hampshire, New Jersey, New York, Pennsylvania, Maryland, Delaware, and along the Atlantic Coast of Canada.

The company was founded in 1917 by Allie Cole. Cole had left his home in Lowell, Maine, at the age of ten, realizing that his widowed mother could not support him and his several sisters and brothers on her washer-woman salary. Cole found employment as a farm hand, a stable boy, and, in 1910 when he was 17, as a baggage and freight handler at the Enfield, Maine, railroad station. According to Galen Cole's Allie Cole: A Maine Pioneer, one day Cole found himself helping a businessman lower a 600-pound load from the dock of the railroad to a horse-drawn wagon. Since this was against the normal operating rules of the railroad, the young man was harshly reprimanded. Bristling at the rebuke, and especially irritated at the railroad's attitude of not encouraging good customer treatment, Cole decided to quit his job and start his own company.

An opportunity presented itself when the U.S. Mail contract offered a bid for delivery between the railroad station at Enfield and the adjacent towns of Burlington, Lowell, Saponac, and Grand Falls. Cole won the contract and established his own firm, Coles Express. The new business venture blossomed, and by 1919 Cole had made enough money to purchase a Model T Ford for the delivery of mail and other packages. This modernization greatly impressed his customers since the delivery time was reduced to a fraction of what it took using horse transportation.

Soon Cole began to augment his mail route income by transporting lumbermen to and from the railroad station. Not long afterwards, Cole started a trucking and passenger service from Enfield to Bangor, Maine, about 30 miles away. After returning from an express run to and from Bangor, Cole decided that his business would benefit by moving to the larger city, so in 1925 he packed up his wife and four children and relocated to what would become the headquarters of Coles Express for many years.

An adventurous and determined businessman, Allie Cole expanded his services to Lincoln, and soon afterward, to Houlton. At the time, roads north of Lincoln weren't plowed during the wintertime by the Maine State Highway Commission, and people grew dependent upon Cole's overnight freight and passenger service. Most residents in the area stored their automobiles at Thanksgiving and brought them out again in May. The herculean effort by Cole to plow the roads with his freight trucks and also make deliveries finally convinced the state legislature to appropriate funds not only for plowing the roads north of Lincoln but for a comprehensive program to improve them for road traffic all year long.

By the time the Great Depression struck during the early 1930s, Coles Express was the largest trucking business in the region. Yet the company was on the verge of bankruptcy in just a few years. Luckily, one of Allie Cole's friends, Harold Russ, a vice-president at Merrill Trust Company, loaned him $2,000 in order to continue operations. In 1935, with the worst years of the Depression behind him, Cole was still in business with 13 worn out trucks and 20 employees. Besides hauling freight, the company was also repairing freight trucks, selling and hauling fertilizer, and building truck bodies. On the second and third floors of the firm's new headquarters, Cole raised and fed 10,000 chickens. At approximately the same time, the company packed and hauled thousands of pounds of potatoes to A&P grocery stores across the entire state of Maine.

World War II brought with it both opportunities and challenges for the company. U.S. Air Force bases located in Bangor, Houlton, and Presque Isle soon developed into major departure points for troops and war materials destined for Europe. Coles Express was contracted by the federal government to haul steel, pipes, foodstuffs, and a variety of construction equipment and general freight to the new bases. Soon all the firm's trucks were operating 24 hours a day, and Cole struck on the idea that if he could convert his trucks to tractors, more freight could be hauled. During the middle of the war, Cole made ten of these tractors with extended trailers for additional freight. As the intensity of fighting increased in all the theaters of war, and more men were called up for active duty, the company began to experience a shortage of drivers. Cole brought one of his sons, 16-year-old Galen Cole, into the company as a driver at this time, but Galen was also drafted during the latter part of the war, and served in Europe until the end of 1946.

When Galen Cole returned after the war, he joined his father and his brothers at Coles Express as terminal and operations supervisor, and later assumed the responsibility for the entire over-the-road driving fleet operation. Showing promise and talent, Galen began to participate in the general management of the company. As the health of his father deteriorated during the late 1940s and early 1950s, Galen become indispensable as the day-to-day administrator of the company's operations. In 1955, when Allie Cole died, Galen was chosen by the trustees of his father's estate and by his four brothers to assume the position of president of the company.

The late 1950s and 1960s were growth years for Coles Express. The firm was the first business to have been granted authority by the Interstate Commerce Commission to conduct full general freight service throughout the state of Maine and on the Atlantic coast of Canada, including New Brunswick, Prince Edward Island, and Nova Scotia. New terminals were opened and expanded service was offered in Portland, Sidney, Bangor, Woodland, Houlton, Fort Kent, and Presque Isle. The company also grew by means of an aggressive acquisitions strategy. Allie Cole had purchased Cliffs & Griffith's Express during the 1940s, and now Galen Cole built upon that foundation, acquiring several more trucking operations, such as Blaisdell, Sargents, McGary, Bemis, Houlton Truck Express, Grahams, Higgens, W.J. Foley, Fred's Hunnewell, Ayer's, Law Trucking, and Peerless. In addition, the company's truck and trailer repair operation had developed into one of the most successful parts of the business. The most comprehensive truck and trailer service in the entire New England region, A.J. Cole & Sons repaired thousands of trucks and trailers. With over 100 mechanics, the company had garnered a reputation as the best truck and trailer repair shop in the state of Maine.

Coles Express continued to expand during the 1970s. Freight service was extended to Boston, and the company soon developed into one of the largest carriers between Maine and Massachusetts. Yet deregulation of the carrier industry was on the horizon and, with the prospect of trouble from the Teamsters union, many freight companies began to shut down. In fact, the company's most important competitor, Fox & Ginn Motor Freight, went out of business at this time. After its departure, Coles Express was the undisputed leader in intrastate general freight service. The company was, in fact, doing more business in the state of Maine than all the other freight companies combined.

When the deregulation of the trucking industry arrived in the early 1980s, Galen Cole was well aware of the fact that his company could not compete with other non-union carriers that were jumping into the business. Management at Coles Express paid its employees above the average rates in Maine, but did not meet the Teamster demand for increases that companies in cities such as New York or Boston were able to pay. In 1982, the Teamsters union called for a strike against Coles Express, leaving approximately 20,000 pieces of freight undelivered. With a significant number of employees crossing the picket line, Coles Express was eventually able to deliver all the packages.

The strike lasted for 18 months. During this time, the Teamsters had called for strikes against dozens of carriers in the New England region, forcing them to pay higher wages or close their doors. Many firms decided to cease operations. Hours after the strike was initiated against Coles Express, the company lost its single largest customer. In order to cut costs, management decided to close all company terminals south of the state of Maine. After the first day of the strike, Coles Express had shrunk to barely one-third of its former size. But offers of assistance to provide extra trucks and drivers poured in from loyal customers and other carrier companies. With this help, the company was able to continue operations and bring in needed revenue. By the end of the strike, Coles Express had regained approximately 75 percent of its business and had become a non-union shop.

Still under the direction of Galen Cole, the company created Cole Transportation systems, a highly innovative computer software development service. This unit began to successfully sell software for delivery companies nationwide. In 1988, the firm established Cole Training Institute, a training school for individuals to learn how to operate a tractor/trailer and forklift. Management at Coles Express regarded the formation of this school as part of its duty to the state of Maine in order to help alleviate the shortage of freight carrier drivers at the time. By the late 1980s, the Cole family business was made up of Cole Express, A.J. Cole & Sons, Cole Properties, A.J. Cole Tire, Cole Warehouse and Distribution, Cole Computer Services, and Cole Training Institute. The company had developed into the one of the most successful, and provided the most extensive trucking services, throughout the entire New England region.

Under Cole family management, the company became known for commitment to its employees and to the people of the state of Maine. In 1958, management set up a company-financed profit sharing plan whose value, by the end of the 1980s, actually approached the net worth of the company. During the mid-1970s, Galen Cole purchased a farm near Bangor and established a setting where orphans and troubled youth could develop their skills in farming. Company employees were also one of the first organized corporate groups in Maine to become involved with the Literacy Volunteers of America in order to help reduce adult illiteracy in the state. In addition, the company funded a not-for-profit museum, the Cole Transportation Museum, to educate the populace about the more primitive automobiles and construction methods employed in the transportation industry during the early years of the 20th century.

During the late 1980s and early 1990s, the trucking industry suffered from the effects of a recession. When this economic downturn was combined with the deregulation of the trucking industry, all of the truckers and freight companies were dramatically affected. The easing of regulations within the industry encouraged the formation of companies in order to take advantage of the market, but this quickly led to widespread overcapacity and rate battles where profit margins became precariously thin. Many small regional trucking firms, like Coles Express, were threatened by the low rates of national carrier companies that could rely on economies of scale to help them through difficult financial periods. Still, thousands of both large and small truck carriers went out of business, while many of those remaining turned to acquisitions and mergers in order to remain competitive and survive.

During this period of upheaval within the entire trucking industry, Coles Express was purchased by Roadway Services Inc., a long-distance trucking firm that had implemented a strategy of acquisition and expansion into related shipping areas to offset the harmful effects of the recession and deregulation. Acquired through lengthy negotiations during 1992 and 1993, Coles Express was brought under the larger national umbrella of Roadway Services. The acquisition was beneficial for both companies. Coles Express was provided with the funds it needed to stabilize and expand its services throughout the New England region, while Roadway Services benefitted by extending its growing network into new regions.

As a division of Roadway Services, Coles Express nevertheless sought to distinguish itself as an industry leader in its niche. The company continued to open new terminals, establishing facilities in Pittsburgh and Altoona, Pennsylvania, as well as in Newburgh, New York, in the 1990s. Moreover, in 1995, the company initiated a "small shipment express" service, which featured, in the words of Traffic Management's Ray Bohman, "a new pricing scheme to compete with the less-than-truckload services being offered by trucking companies."
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Last edited by anjalicutek; December 15th, 2010 at 02:54 PM..
   
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