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BABM MKT 306

STUDENT NO: 109149305

DHL MARKETING STRATEGIES

MARKETING STRATEGY BABM MKT 306


DON RASHITHA MARK L HALAHAKONE STUDENT ID: 109149305
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BABM MKT 306


Table of Contents Executive Summary Chapter 1 1.1 DHL Situational Analysis 1.2 DHL Micro environment Analysis / SWOT Analysis 1.2.1 Strengths and weaknesses 1.2.2 Opportunities and Threats 1.3 DHL Macro environment Analysis / PESTLE Analysis 1.4 Competition Analysis 1.4.1 Extent rivalry between established firms 1.4.2 Risk of new entry by potential competitors 1.4.3 Bargaining power of buyers 1.4.4 Bargaining power of suppliers 1.4.5 Treat of substitute product

STUDENT NO: 109149305


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Chapter 2 2.1 Development of DHL marketing strategies 2.2 DHL SMART marketing objectives 11 12

Chapter 3 DHL strategic marketing planning process 3.1 Market Segmentation 3.2 Target Market 3.3 Market Positioning 14 14 15 15

Chapter 4 4.1 Marketing program of DHL 4.1.1 Production and service line at DHL 4.1.2 Pricing strategy 4.1.3 Place / Global Expansion 4.1.4 People Behaviour at DHL 4.1.5 DHL expresses logistic Process 4.1.6 Promotion Strategy 4.1.7 Physical evidence Conclusion Appendix 1 Appendix 2 Appendix 3 References 17 18 18 19 19 19 20 20 21 22 23 24 25

BABM MKT 306

STUDENT NO: 109149305

Table of Figures Figure 1: Situational Analysis of DHL fieldwork Figure 2: SWOT analysis at DHL Marketing fieldwork Figure 3: Porters Five Forces fieldwork Figure 4: Development of marketing strategy fieldwork Figure 5: SMART marketing objectives at DHL fieldwork Figure6: DHL Ansoffs Matrix fieldwork Figure 7: Positioning map of DHL competitive market fieldwork Figure 8: 7ps Market mix of DHL fieldwork Figure 9: push and pull strategy at DHL fieldwork

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Executive Summary DHL established in 1969 by three building entrepreneurs named Adrian Dalsey, Larry Hillblom and Robert Lynn and their first service provided from San Francisco to Honolulu by shipping papers by airplane. Since 1969, DHL grew up with the market place and they become a leading global express and logistic package delivery service provider, overland transport and air freight. And their international market has expanded worldwide in more than 220 countries. Mainly the DHL Express and logistics divided into four main sections such as DHL solutions, DHL Freight, DHL Express, DHL Air and Ocean. DHL faced many difficulties with the changes of globalization such as political and economic changes, changes of law rules and regulations, new technologies and threats of new market competitors. This report analyzed the SWOT analysis, PESTLE and Porters five forces analysis to identify the strengths and weaknesses and also to find out the opportunities and threats affiliated with political, economical social, technological, legal and ecological factors. And the reporter investigates the STP strategy (Segmenting, Targeting and positioning) with the SMART objectives and the market programs such as marketing mix (4Ps). Moreover the writer explicates some recommendations which could be more helpful to achieve their strategic goals.

BABM MKT 306

STUDENT NO: 109149305

Chapter 1 1.1 DHL Situational Analysis Assessing Internal and external environment is important to identify the situation of the organization and situational analysis defines the state of the organization. It mainly explicates the competitive position, operating and financial condition and internal and external affairs at DHL. Below figure 1 explains clearly about the internal and external environment of DHL and also competition they face and it can be identified by SWOT and PESTLE market analysis tools.

Figure 1: Situational Analysis of DHL - fieldwork

BABM MKT 306

STUDENT NO: 109149305

1.2 DHL Micro environment Analysis / SWOT Analysis SWOT analysis is a strategic marketing tool which can use to identify the strengths and weaknesses at DHL marketing, or internal factors, and the opportunities and threats in external environment. Conducting a SWOT (figure 2) is easy to identify the current situation and also to forecast the future of the organization such as new planning and implementations, identify the market competition. Once DHL identified the main issues, they move on to marketing objectives. Outcome of the SWOT can be used with other tools for audit and analysis, such as PEST analysis and Porter's Five Forces analysis.

Figure 2: SWOT analysis at DHL Marketing - fieldwork Also the porters value chain analysis identifies the Competitive Advantage and DHL values creating and sustaining Superior Performance. And through the analysis DHL identifies what activities DHL undertakes, is directly linked to achieving competitive advantage. For example, DHL logistics wishes to outperform its competitors through the promotions and differentiating itself through express logistic. DHL must perform its value chain activities better than the opposition. By contrast, a strategy based on seeking cost leadership will require a reduction in the costs associated with the value chain activities, or a reduction in the total amount of resources used. (DHL value chain analysis and the proposed values explain below in Appendix 1)
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1.2.1 Strengths and weaknesses DHL maintain their customer satisfaction with providing a quality service from the beginning of the organization, in 1997 they become the global express transportation company to obtain simultaneous system-wide ISO 9001 certification in international quality standards. Having a strong brand name helps give the company an established and professional feel. This increases the customers trust in the products or services the company offers. Globalism also strength as the cost of doing business across borders. When things like tariffs and policy barriers, as well as more general costs of communications or operations, get lower, thats more globalism. eServices and technology also a strength to the DHL company such as Accessing a greater customer base, Broadening market reach, Lowering of entry barrier to new markets and cost of acquiring new customers, Alternative communication channel to customers, Increasing services to customers. In addition corporate symbiosis and smart- truck project also strength to the DHL. There are some weaknesses too in the DHL Company. Such as high price, because of high price people are trying to go to low cost companies. And this is a major risk to the DHL. Market- share estimate, weak visibility are the weaknesses too. DHL is not as well known as UPS and FedEx as well. 1.2.2 Opportunities and Threats There are large numbers of companies do their sales and marketing through online. It is a great opportunity for DHL to expand their delivering service globally as those companies always looking courier services to deliver their orders, products to the customers. And also DHL can categories the services to different types, to get the attraction. And it is very difficult task to keep relations with foreign countries through DHL expansion globally. Most of the countries DHL goes, they are at a risk of regulations that threatening for the operations. Also the fluctuation of fuel is another major problem, condition of the fuel prices are different with the economical political background of the countries. So, even the fuel prices goes up, DHL has to deliver the parcel.

BABM MKT 306

STUDENT NO: 109149305

1.3 DHL Macro environment Analysis / PESTLE Analysis

BABM MKT 306

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1.4 Competition Analysis According to Porters (1980), introduced a frame work and it contains five forces which are related to competition and threat of the company. The businesses seeking to develop an edge over rivalry firms can use this model to better understand the industry context in which the firm operates. Porters model of the forces that interact to produce the competitive situation at DHL and it identifies the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes and intensity of rivalry (figure 3).

Figure 3: Porters Five Forces - fieldwork

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STUDENT NO: 109149305

Chapter 2 2.1 Development of DHL marketing strategies According to the DHL logistics, DHL vision is to lead the Logistics industry into a new Era of Innovation, Quality, Productivity, employee Opportunity and Social Responsibility and their mission is Making the most of collective passion, experience and Scale, to build the best logistics company and become customers and employees first choice, globally. And DHL corporate strategy categorised into six main interconnected components to intensify customer focus, deliver consistent service excellence, extend capabilities (creating local strength and driving practical innovation), attract, develop and retain talent, to relentlessly drive efficiency and to be proactive in social. Corporate strategy is implemented to achieve the objectives and to achieve the targets of internal (diversification, specialisation) /external (Franchising, joint ventures) growth, retrenchment and stability of the express logistics. DHL marketing strategy gives an accurate support to achieve the corporate strategies (mission, vision and objectives) as it is help to engage with customers and marketing programs. DHL become more innovative and competitive through the marketing strategy. Below figure 4 shows how marketing strategy has linked with the corporate strategy to be the leading express logistic.

Figure 4: Development of marketing strategy - fieldwork

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STUDENT NO: 109149305

2.2 DHL SMART marketing objectives As explained above the position of DHL, it shows that DHL compete with FedEx very closely and the service charges and speed of the delivery services are comparatively low than FedEx. UPS also provide good express services with lower rates, but their speed of the delivery service is lower than the top two competitors. According to Kotler (2009) and the STP strategy at DHL, the business units creates a mix of objectives, including profitability, sales growth, market share improvement, risk containment, innovation and reputation. The SMART objectives of DHL express mention in below figure 5.

Figure 5: SMART marketing objectives at DHL - fieldwork DHL use strategic marketing processes to identify the customer expectation and to increase the profits through the strategic marketing plans. Main purpose of the marketing strategy is to improve the existing marketing projects and increase the market domination. DHL can engage with more customers to increase the market and grow up with the profit. Strategic marketing creates the goals to be met such as setting realistic objectives, creating business tactics that are more effective. And the DHL can identify the necessary changes and improve performance by taking past marketing failures into account.

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Below figure 6 explicates the Ansoffs matrix of DHL and according to Ansoffs matrix, Stone (2001) explain the Market penetration consider about the market growth strategy of DHL and this covers the business area by maintaining or increase the share of current services, secure authority of growth market. And restructure the market by driving out the competitors such as FedEx, UPS this would require a much more aggressive promotional campaigns and DHL provide services with extra features to fulfil it. For example: 50% off campaign in UK. Market development is expanding the services and introduces them to more customers and DHL slightly increase the customer base with expanding new services.

Figure6: DHL Ansoffs Matrix - fieldwork

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BABM MKT 306

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Chapter 3 DHL strategic marketing planning process 3.1 Market Segmentation According to Hollens (2003), Market segmenting trying to make effective use of their resources. DHL is also categorizing their market in to different market segments as they operating large number markets in the field. Mainly DHL need to identify the different groups of consumers with similar wants and needs who will respond to a similar marketing programs. Therefore DHL can divide their market in to different market segments when they provide their services to B2C market such as Demographic, Behaviouristic and Benefit sought. Below chart identifies the market segments at DHL and explicates the different markets and most of the customers expects express logistic with quality, time and cost effective services.

When it comes to B2B market, segmenting depend on the industry. For example, size of the industry, type of the business (online retailing businesses, international trading companies) and DHL provide different tariff plans and services to each company such as small and medium companies and multinational companies.

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BABM MKT 306

STUDENT NO: 109149305

3.2 Target Market Target market can be divided into two main parts as B2B and B2C markets. And the market programs (market mix) are available to target the market and focus the marketing resources which can be beneficial. Hollensen (2003) identifies the target marketing is the process of selecting one or more market segments and developing products and programs that are tailored for each segment. Different clients have different wants, DHL realized that and for this reason DHL has categorized itself into six dissimilar sections; DHL Express, DHL Ground, DHL Freight, DHL Custom Critical, DHL Trade Networks and DHL Supply Chain Services. Every service is aimed toward a particular section of the market, according to the exact wants of dissimilar clients. By specifically aiming customers by their wants, DHL wish to provide the instant and psychological wants for those who want a guarantee on time and delivery. Customers might need different services at different period, over one sort. Express delivered overnight documents might need the company, as well as need freight something after that day. DHL realize that there are a range of wants their clients may have, and have sections the market accordingly. In that manner, no issue what the client might want to do, DHL will be capable to provide them. 3.3 Market Positioning According to Ries and Trout (2000), the positioning is the act of designing a companys offering and image to occupy a distinctive place in the minds of the target market. DHL must be positioned at the accurate place where they can improve achieve the marketing goals. Position map can be used to determine the position of a product, service or idea and it is important to understand the levels of competition because positioning applies at all levels of competition. Below figure 7 explicates more about the DHL positioning strategy and where they positioned in the competitive market.

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Figure 7: Positioning map of DHL competitive market - fieldwork

According to above mentioned positioning map, DHL placed in a higher competitive position. They maintain good marketing programs to compete with FedEx, UPS, and TNT etc to achieve their marketing goals and keep satisfaction of their B2B and B2C markets by introducing attractive promotions and new express logistic services. As shown in the figure 5, DHL maintains a good express logistic services and their charges are strongly competitive when compare it to other main competitors.

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BABM MKT 306

STUDENT NO: 109149305

Chapter 4 4.1 Marketing program of DHL McCarthy (1960) identifies the marketing mix as a general phrase using to describe the different kind of processes organizations have to get in the whole marketing process of bringing a product or service to market and the best known marketing program is 4ps or 7ps marketing mix. Below figure 8 identifies the 7ps of DHL and additionally added another content which is explicates about the people. Marketing programmes helps to achieve the SMART marketing objectives of DHL.

Figure 8: 7ps Market mix of DHL - fieldwork

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STUDENT NO: 109149305

4.1.1 Production and service line at DHL DHL Express now delivers about millions of packages per day throughout the United Kingdom and more than 220 countries worldwide. The company operates a fleet of more than 500 aircraft and 50,000 motorized vehicles and trailers. Under DHL Express Logistics, DHL offers a wide range of services for b2b and b2c markets including same day deliveries in UK, Next day delivery service, Ship online, small business solutions, domestic services and online delivery cost calculators etc. Also DHL should take responsibility for the whole mail supply chain including management of non Deutsche Post DHL service providers. This gives their customers early visibility of cost, simplified billing and contract management. DHL Global Mail has direct connections to over 200 countries, 100 sales offices and 40 production centres on international services, domestic services and mail essentials. So DHL can introduce more delivery packages to expand the services through the DHL mail service and they should provide extra facilities such as mail insurance, mail tracking, return mail translation etc. 4.1.2 Pricing strategy The main factors that influence the price charged by DHL are the costs of gas, promotions, and market research. The prices that DHL charges on the services now are very similar to their main competitor FedEx and UPS. As an example, the price of a DHL overnight letter is $11 compared to UPS and DHL prices are also the same. As DHL policy is to maximize profits, they introduce different pricing methods to different people as segmented in the market segmentation strategy. And it will easy to make profit by catching more service users. For example DHL has special services for each country residential can have more benefits by DHL the parcels inside the country (50% off in UK). Also DHL introduce low pricing techniques for the express logistics services such as penetration pricing.

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4.1.3 Place / Global Expansion DHL is a truly globalised express logistic company and it revolves around setting up of a marketing channel to reach the customer. Lee (2004) identifies that the place is distribution channel it is help link the services and customers. DHL marketing channels or distribution channel can be categorised into two main events such as DHL stores and Internet. This distribution channels allows DHL to reach their customers directly. DHL provide an excellence services through their official web site which help customers to use the delivery services through internet. Customers can provide the parcel pick and drop information and they can make the payments through the online secured servers. Also DHL established thousands of stores globally. It is more helpful to seek more joint ventures and expand the services. 4.1.4 People Behaviour at DHL As mentioned in earlier sections DHL international network links more than 220 countries and more than 300000 employees are dedicated to providing reliable services. DHL maintain excellence customer service centres. And there are many motivation programmes such as skills developing programs, training programs, graduate programs and extracurricular activities. This helps DHL to maintain a strong and highly skilled staff to deal with their customers and they can keep good customer satisfaction. DHL staff empowered enough to make decisions, share ideas on the given projects or programs. 4.1.5 DHL expresses logistic Process DHL process can be categorised into six main steps (Pickup, Transport to department, processing, Networking, delivery and management tool) according to the organisation website and it is clearly explains in below appendix 2.DHL process improvement is a constant part of their business. Controlling an excellence process is easier to improve customer satisfaction, increase the global market and increase the worldwide circulation. DHL can increase the global communication and they should use professional advisers to advice customers about their wide selection of services such as pricing schemes. And also the process of DHL helps to stay touch with their business partners globally.

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STUDENT NO: 109149305

4.1.6 Promotion Strategy Promotion is the process of marketers informs, educate, persuade, remind and confirm consumers through communication. DHL maintains many activities to promote the services such as introduce unique delivery services, differentiate promotions (push strategy). Mainly DHL uses advertising media integrated communication Medias such as short TV commercials publish articles and advertisements (Appendix 3) on business class magazines and there are large numbers of sales promotions posted on the DHL website. DHL can promote new mobile services such as mobile applications which can be more helpful to both b2b and b2c customers to update with DHL services. And DHL can sponsor for the short drama series and movies to telecast their logo and services through the media as FedEx do (Pull strategy). Below figure 9 explains how the push and pull strategy works on DHL promotions.

Figure 9: push and pull strategy at DHL - fieldwork 4.1.7 Physical evidence Physical evidence is the most attractive element of the DHL marketing program. DHL front stage staff always provides an excellence service to their customers whenever they required a service such as packaging, contact centre help desks and the kind appearance of the staff. DHL logo and the uniforms are strongly holds a professional look at the organisation and all the staffs are well trained to help the customers and keep them happy at their services. There are many facilities inside the DHL such as conference rooms, separate cubicles for the necessary staffs and the exterior designs of the DHL buildings. It is easy to maintain the efficiency and satisfied staff.

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Conclusion In order to undertaking a situational analysis is important to identify the internal and external strengths and weaknesses of DHL strategic marketing. DHL has many opportunities as its international expansion. Acquisition of freight companies allows DHL to increase its customer base, fleet, resources and enjoy the benefice of an already existing businesses quicker access to market. According to the report and analysis, DHL can introduce more differentiate pricing strategies to the b2b and b2c markets by create some promotions as discussed in the above DHL smart objectives and STP strategies. Also DHL focuses more on the product development and market development as they positioned in a high competition with FedEx and penetration pricing techniques are more important to compete with the other global logistics.

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Appendix 1 DHL Value Chain Analysis

Partnering across the value chain creates additional vale

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Appendix 2 DHL Express Logistics Process

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Appendix 3 Promotions / Advertising

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