DHL WORLDWIDE EXPRESS

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.
 DHL San Francisco based and
●

manages all US operations.

Airways
DHL Brussels based… and manages
●

all operations outside the US

International

• Formed in san Francisco in 1969 by Adrian Dalsey,

Larry Hillblom and Robert Lynn.
• DHL uses hub system to transport
shipments around the world

• uses owned or leased aircrafts to carry

shipments in Europe, United States and
Middle East.

• optimizes its transport network to

minimum delivery time by using a
variety of schedule international
carriers
• Organized into nine geographic regions
• Main functions of the worldwide marketing
service group were: business development,
information transfer, communication of best
practice ideas and sales coordination among the
country operating units.
The International Air Express Industry

• products: document
delivery and parcel
delivery
• Revenue split - 75:25
between parcel and
documents.
• With the integration of
European market, the
express delivery business
was also booming
 COMPETITORS
• Barriers to entry: time and investment
• DHL’s competitors: FedEx, TNT and UPS
• Small shipping forwarders, national post offices and
regular airlines
company Market share (%)
DHL 44
FedEx 7
TNT 18
UPs 4
others 27
total 100 %
• Founded in 1973,
• Focused on US •Thomas
•United parcel
domestic market Nationalwide
service
• During late Transport
1980’s, company •Emphasized
began to expand • delivery of
through on low prices
documents in
acquisitions and Europe
competitive
pricing
 DHL Services

• Worldwide document express and worldwide

parcel express
• DOX: document delivery to locations around the
world.
– Items included: computer printouts, contracts etc

• WPX: non-document items that had some

commercial value or needed to be declared to
customs .
– Items: spare parts, videotapes etc
• Restrictions on size, weight and contents

• Various value-added services by DHL

– LASERNET, 24x7 customer service, proof of
delivery services

• By 1990, DHL was electronically linked

into an international customer network.

• Direct computer link, custom authorities

in 5 European countries, customer
clearance, licensed customs brokers
• Speed of service
• Rating of Air Express carriers
DHL TNT FedEx UPS
Reliability 8.4 7.7 7.8 8.1
Value for 8.0 7.3 7.5 8.0
money
 CUSTOMERS

• Earlier banks and finance houses were the

major customers
• Regional agreements with MNCs as well as
contracts in individual country markets
• Evolution of pricing policy: PRICING
– Different pricing
strategies and structures
– Prices were set on four
factors:
1. what the market could
bear
2. price charged by
competition
3. initial entry pricing in
other countries
4. current pricing around
the world
 PRISM
( Pricing Implementation Strategy Model )
• Software package to analyze profitability.
• Purpose :
• Analyzing the profit impacts of possible tariff
adjustments, 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
 Pricing structure

Monthly ●
Flat monthly fee to customers
handling fee

Frequency ●
Based on total number of
discount documents and parcels shipped

●
Discounts were based on total
Loaded half-kilo weight shipped during a month
• Price negotiation Price customization according to
the customer needs.
• Base prices and options
Based on product
 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.Shipping overseas require different capabilities from
shipping within the continental US
3.Best shipping
 CONCLUSION

• DHL profits might be maximized if each

country manager could charged each
customer what “market could bear”.

• Order and consistency was required in the

pricing strategy, structure & decision making
 DHL wanted to make recommendations on
pricing strategy, structure and decision making
• Price leadership strategy: DHL would charge
premium price and aim to deliver superior
value-added services in all markets
• Market respond 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
• Different in price for different countries
• Shipping fee should be same for customers
across different countries
Decision Making

• Centralized
• Decentralized
• hybrid