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Published by: pallugupta on Oct 07, 2010
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Presented by: Mohit Bali Munish Pallavi Gupta Parampal Singh

COMPANY BACKGROUND AND ORGANIZATION ‡ World s leading international express delivery network. ‡ Headquarters in Brussels, Belgium. ‡ DHL legally comprises of two companies: DHL Airways and DHL International.

.‡ Formed in san Francisco in 1969 by Adrian Dalsey. Larry Hillblom and Robert Lynn.

United States and Middle East. ‡ optimizes its transport network to minimum delivery time by using a variety of schedule international carriers .‡ DHL uses hub system to transport shipments around the world ‡ uses owned or leased aircrafts to carry shipments in Europe.

communication of best practice ideas and sales coordination among the country operating units.‡ Organized into nine geographic regions ‡ Main functions of the worldwide marketing service group were: business development. information transfer. .

75:25 between parcel and documents. the express delivery business was also booming .The International Air Express Industry ‡ products: document delivery and parcel delivery ‡ Revenue split . ‡ With the integration of European market.

national post offices and regular airlines company DHL FedEx TNT UPs others total Market share (%) 44 7 18 4 27 100 % .COMPETITORS ‡ Barriers to entry: time and investment ‡ DHL s competitors: FedEx. TNT and UPS ‡ Small shipping forwarders.

‡ Founded in 1973. ‡ Focused on US domestic market ‡ During late 1980 s. company began to expand through acquisitions and competitive pricing ‡United parcel service ‡Emphasized on low prices ‡Thomas Nationalwide Transport ‡ delivery of documents in Europe .

± Items included: computer printouts.DHL Services ‡ Worldwide document express and worldwide parcel express ‡ DOX: document delivery to locations around the world. videotapes etc . ± Items: spare parts. contracts etc ‡ WPX: non-document items that had some commercial value or needed to be declared to customs .

‡ Restrictions on size. proof of delivery services ‡ By 1990. 24x7 customer service. customer clearance. custom authorities in 5 European countries. ‡ Direct computer link. licensed customs brokers . DHL was electronically linked into an international customer network. weight and contents ‡ Various value-added services by DHL ± LASERNET.

5 UPS 8.1 8.7 7.0 .0 TNT 7.8 7.4 Value for money 8.‡ Speed of service ‡ Rating of Air Express carriers DHL Reliability 8.3 FedEx 7.

CUSTOMERS ‡ Earlier banks and finance houses were the major customers ‡ Regional agreements with MNCs as well as contracts in individual country markets .

initial entry pricing in other countries 4.‡ Evolution of pricing policy: ± Different pricing strategies and structures ± Prices were set on four factors: 1. current pricing around the world PRICING . what the market could bear 2. price charged by competition 3.

PRISM ( pricing implementation strategy model ) ‡ Software package to analyze profitability. taking into account the competitive intensity of the route. ‡ Identifying low-or negative customers whose yields should be managed upwards ‡ Settling price strategy for different customer segments . ‡ Purpose : ‡ Analyzing the profit impacts of possible tariff adjustments.

‡ Base prices and options Based on product ‡ Pricing structure Monthly handling fee Frequency discount Flat monthly fee to customers Based on total number of documents and parcels shipped Loaded half-kilo Discounts were based on total weight shipped during a month .

‡ Price negotiation: price customization according to the customer needs. .

Best shipping .Shipping overseas require different capabilities from shipping within the continental US 3.Sales And Advertising Single sales force Prior to 1984: global advertising campaigns After 1984: countries contact with its own local advertising agency 1990: Faster to More of the World Objectives: 1.Brand awareness 2.

CONCLUSION ‡ DHL s profits might be maximized if each country manager could charged each customer whatever the market could bear. ‡ Order and consistency was required in the pricing strategy. structure & decision making .

.PRICING STRATEGY ‡ Price leadership strategy: DHL would charge premium price and aim to deliver superior value-added services in all markets ‡ Market response strategy : DHL would set prices independently in each country according to customer usage patterns and competitive pressures.

Pricing Structure ‡ Different price charged for documents and parcels ‡ Additional cost incurred for parcel shipping ‡ Difference in price across different industries ‡ Shipping fee should be same for customers across different industries .

Decision Making ‡ Centralized ‡ Decentralized ‡ hybrid .

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