marketing strategy babm mkt

BABM MKT 306 STUDENT NO: 109149305

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

DHL MARKETING STRATEGIES


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Table of Contents Page no

Executive Summary 4

Chapter 1

1.1 DHL Situational Analysis 5

1.2 DHL Micro environment Analysis / SWOT Analysis 6

1.2.1 Strengths and weaknesses 7

1.2.2 Opportunities and Threats 7

1.3 DHL Macro environment Analysis / PESTLE Analysis 8

1.4 Competition Analysis 9

1.4.1 Extent rivalry between established firms 10

1.4.2 Risk of new entry by potential competitors 10

1.4.3 Bargaining power of buyers 10

1.4.4 Bargaining power of suppliers 10

1.4.5 Treat of substitute product 10

Chapter 2

2.1 Development of DHL marketing strategies 11

2.2 DHL SMART marketing objectives 12

Chapter 3

DHL strategic marketing planning process 14

3.1 Market Segmentation 14

3.2 Target Market 15

3.3 Market Positioning 15

Chapter 4

4.1 Marketing program of DHL 17

4.1.1 Production and service line at DHL 18

4.1.2 Pricing strategy 18

4.1.3 Place / Global Expansion 19

4.1.4 People Behaviour at DHL 19

4.1.5 DHL expresses logistic Process 19

4.1.6 Promotion Strategy 20

4.1.7 Physical evidence 20

Conclusion 21

Appendix 1 22

Appendix 2 23

Appendix 3 24

References 25


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Table of Figures Page No

Figure 1: Situational Analysis of DHL – fieldwork 5

Figure 2: SWOT analysis at DHL Marketing – fieldwork 6

Figure 3: Porters Five Forces – fieldwork 9

Figure 4: Development of marketing strategy – fieldwork 11

Figure 5: SMART marketing objectives at DHL – fieldwork 12

Figure6: DHL Ansoffs Matrix – fieldwork 13

Figure 7: Positioning map of DHL competitive market – fieldwork 16

Figure 8: 7p’s Market mix of DHL – fieldwork 17

Figure 9: push and pull strategy at DHL – fieldwork 20


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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.


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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


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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 porter’s 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, that’s 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.


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1.3 DHL Macro environment Analysis / PESTLE Analysis


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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. Porter’s 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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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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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 Ansoff’s 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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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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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

company’s 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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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: 7p’s Market mix of DHL - fieldwork


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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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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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marketing strategy babm mkt

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