DHL Marketing

1. Introduction
1.1. History
While Larry Hillbolm was studying, he had little money, so he decided to start a courier duty between San Francisco and Los Angeles, picking up packages for the last flight of the day, and returning on the first flight the next morning, up to five times a week. When he graduated, he found a niche, which no other company was filling. He flew bills of lading from San Francisco to Honolulu, so that they were at the port of arrival, before the Shipment was. This saved valuable time after the ship with the shipment arrives. To start the company, he uses a part of his student loans and brought in his two friend Adrian Dalsey and Robert Lynn, this was in 1969. Those three boys were sharing a Plymouth Duster to pick up the documents in suitcases. When the company took off, new couriers joined the company. The first couriers were Max and Blanche Kroll, who had an apartment in Hawaii, where the couriers can sleep during their stay in Honolulu. In the early 1970s they started to expand their business. First to the Philippines, then Japan, Hong Kong, Singapore and Australia. 1998 Deutsche Post began to acquire shares in 1998 and finally reaches the 51% in 2001. Following the completion of the purchase in 2002.

1.2. Key Facts
Now DHL is of the largest logistic providers in the world, it is build-up of the departments DHL Packet, DHL Express, DHL Freight, DHL Global Forwarding, DHL Supply Chain and DHL Mails. This assessment is about DHL Express. DHL has more than 285,000 employees, who provide their service in 220 countries all over the world. That means that DHL is the most international company in the world. For its contribution in the past 40 years, DHL has become the global leader of the international logistics industry and is the global market leader in Sea freight and Air freight and the top-selling logistics company in the world. Since DHL is a division of the German logistics company “Deutsche Post DHL” , it is named “DHL International GmbH”.

2. Situation Analysis

2.1. Customers
DHL accepts any kind of delivery requirements, no matter who the clients are. So DHL has customers all over the world. To know the customer’s life cycle better, DHL segments its customer into different groups: Strategic Customer, Long-Term Relationship Customer and Normal Customer. The Strategic Customer has large amounts of logistics needs or complex supply chain requires. Usually this are the top 250 customers in the world. Long-Term Relationship Customers have regularly frequently needs, which are simpler than the logistic needs of the Strategic Customer. The Normal Customers, are customers who are not loyal and would choose other Express provider, if they are cheaper or the eyes of the customer better. That means, to build strong relationships, DHL always provides the best service and best technologies to their Strategic Customers. But the main task for DHL is to focus on the Long-Term Relationship Customers to maximize their profit. Furthermore, they will do something for the Normal Customers to turn them into loyal customers and someday into Long-Term Relationship Customers.

2.2. Product
DHL Express 9:00 includes a Door-to-Door delivery on the next possible business day. It is perfect for time critical international shipments and includes a money-back guarantee and a proactive delivery notification. It’s possible to book with the standard booking procedure and the shipments can be picked up at every place, it doesn’t matter if it is a small specific location or a major business centre. DHL Express 12:00 same as DHL Express 9:00, with a delivery at 12:00 p.m. on the next possible business day. DHL Express Worldwide includes a Door-to-Door delivery by the end of the next possible business day. All pick-up locations all over the world are possible. DHL Jumbo Box is ideal to ship dutiable goods around the world. The boxes are available in two dimensions. (Up to 10kg and up to 25kg). Another positive point in this service is the price. In this service you have simple fixed prices, which are based on destination zones.1

2.3. Competitors
The main competitors of DHL are UPS, FedEx & TNT. In the following table you can see the comparison of these four companies by considering Size / Number of employees, revenue 2012, service / logistics, sustainable strategy and number of vehicles and aircraft.

Size / Number of employees
Revenue 2012 in million US$
Service / Logistics
Sustainable strategy
Number of Vehicles & Aircraft
DHL
– internationally operating logistics company
– 285,000 Employees
– in 220 coutries
– foundation: 1969
76,5742
– Shipping
– tracking & tracing
– export & import services
– freight ( Air, Ocean, Road, Rail)
– Industrial projects transportation
– DHL GO GREEN
– in-house carbon management
– environmental management systems
Vehicles: 76,000
Aircraft: 420
UPS
– internationally operating logistics company
– 426,000 Employees
– in 200 countries
– Founding: 1907
54,1003
– Shipping
– tracking & tracing
– critical freight
– LCL
– Carbon impact analysis
– package design & test lab
– transportation management
Vehicles: 91,700
Aircraft: 268
FedEx
– Internationally operating logistics company
– 80,000 Employees
– in 220 countries
– Founding: 1971
42,0004
– Package, freight express
-provide special supplies
– freight shipment
– Earth Smart @ work
– Earth Smart Outreach
Vehicles: 42,000
Aircraft: 674
TNT
– Internationally operating logistics company
– 75,000 Employees
– in 200 countries
– Foundation: 1946
10,1075
– time critical service
– special handling
Planet Me Programme
Vehicles: 19,000
Aircraft: 43

As the table shows, DHL is by far the number 1 in the logistics industry. Even if its foundation is just 44 years ago, DHL has the highest revenue.

3. Marketing Environment (PESTEL)
3.1. Political
Since the World War II different governments have worked together to eliminate import restrictions and export subsidies. This led to a liberalization of international trade which increased the volume of trade. That had to follow a huge economic growth. Nowadays logistics companies such as DHL have the opportunity to work all around the world. The European Union has developed and created one of the biggest single markets for trade in the world. EU enlargement has removed border lines and has made trade and business more accessible for its members. EU has created closer links with immediate neighbours and enables bigger exports and imports and free movement of services.

If DHL has to transport shipments, they don’t need all the customs things, which makes work easier for them. But there are also restrictions of the government, that slow DHL down. This are regulations like the night flight ban at airports that are near the city, the ban on driving of trucks on Sundays and holidays on German motorways and the driving regulations for truck drivers. Furthermore there was a liberalization of the postal market in Europe, which was finished in 2012. The liberalization started in the 90’s because there were many national postal companies, who got benefits from the government, which are acting as monopolies. The postal reform has enabled the private postal companies to enlarge their business portfolio into parcel and express market. So it brought more competition in the market especially on domestic level.

3.2. Economic
The CEP-market (Courier, Express, Parcel) has high potential and the growth is directly related to the level of the gross domestic product. Because of the industrialization and the rising of global trade, express services became more and more important for the industry. Additionally, the customer want high quality standards and products from overseas, e.g. fruit that is not grown in their own country and which has a short life period. Through the global economic crisis 2008/2009 the volume of shipments decreased rapidly as well as the shipping rate in every transport mode. Even big companies like DHL had to fight with decreased earnings and changed business
strategies. But on the other hand companies with strong brand and a good position in the market, like DHL, had the opportunity to expand into emerging markets, which arose because of the industrialization.

Smaller companies didn’t have the potential to expand, because they were in bigger risk to lose money. DHL is able to absorb that risk much easier. Reduction of costs is inevitable for all companies which want to move forward. One way to reduce costs is restructuring of the company structure and outsourcing of some functions. So did DHL, they outsourced their IT functions to T-Systems.

3.3. Social
The social and cultural behaviour of DHL affects customer’s attitudes, interests and opinions. Offering products and services, which meet and complement the needs and wants of the customer. They will lose market share and demand for their products, if they don’t react to the lifestyle changes of the society to the global consumer. In developing countries DHL is just concentrating on the biggest needs and wants of the business. DHL has to establish its brand and achieve reliable image and service quality among its customers. Another negative point in the social part of the PESTEL analysis are the social costs. These are the costs the society has to bear. Example: The increase of the volume of transported goods has led to higher CO2 emissions which have direct effect to the global warming. The government and so the society as well has to bear the costs for that. This cost could be fines, taxes and legislation. Social costs have a negative effect on the customer, their thinking changes to an environmentally friendly thinking, so they would choose the most environmentally friendly company. DHL’s responsibility should be to decrease these costs and work with more environmentally friendly modes of transport.

3.4. Technological
Caused by technological environment companies like DHL can rapidly move forward. The communication is only one achievement of the modern technology. Switching from letter to fax to email made the communication between the company and the customer easier und much faster. Furthermore, they can and have to react immediately to changes in customer orders that bring extra pressure to the companies, because the customers expect an on time delivery without delays. The central point of the company is Information Technology. The IT system has to be fast and reliable, because the whole business depends on it. Today most of the companies are working paperless, customer orders are only registered in the system. Besides the security is very important as well, companies have to prevent unauthorized access to data and data manipulation. So they never can stop investing in technological development. It is so important, that even in an economic crisis they can’t stop investing, otherwise there is a threat that they will fall behind.

As already mentioned in 3.2.2. DHL outsourced their IT-functions, that’s a way to reduce the costs in the IT area. Usually this companies are specialized in IT development and have to bear the costs of developing new technologies, software and applications. Another aspect are customized logistic solutions to meet customer’s wants. Examples are the transport of sensitive goods like pharmaceuticals in a temperature-controlled drum or just-in-time solutions for automobile manufacturers.

3.5. Environmental
The global warming and the greenhouse gases are massively determined by the logistics industry. Because of the increasing mobility more and more trucks are on the streets. To decrease CO2 emissions countries issue legislation, that forces companies to reduce it. For this reason DHL started projects to find ways how to reduce pollutions to the environment. The problem is that logistics companies like DHL are dependent on fossil fuels to run their business. The Research & Development department plays an important role in these projects, they have to invent and develop alternative fuel or alternative transport facilities. Other ways to reduce air pollution are reducing shipping time, offer climate neutral products and train the employees to make the business more efficient and effective.

3.6. Legal
Legal rules play a role in nearly every part of the company. There are state regulations, like driving times for the truck drivers, contract regulations and the treatment of the employees. It is very important, because on the one hand legislation can place many obligations but on the other hand it can also create market conditions, which are beneficial for the business.

4. SWOT Analysis

Strengths
Effective communication
Endless logistics solutions
Online growth
Loyal customers
Global leader of international logistics
providing in 220 countries
Strong brand, name image
Supply chain
Excellent In-house Consultancy

Weaknesses
Many different and large operations means standardized operations even in need of customized environment Dependence on external agencies, ministries and other regulatory bodies Not enough indicators suggesting performance with respect to getting regulatory permissions

Opportunities
Emerging markets used as hub and expansion abroad
Product and services expansion
Takeovers
Efficient and effective inherent systems to comply with regulatory bodies can create a niche presence Threats
Competition
Economic slowdown
External changes (government, politics, taxes, etc.)
Price wars
Declination of traditional services (Letters) due to electronic communication Massively increasing e-commerce

4.1. Strength
The greatest strength of DHL is certainly the excellent reputation as the global leader of international logistics and the strong brand name with the resulting loyal customers. If a company keeps its promises, the customers are satisfied and will use the service again. The company has also a very good website, which is growing and growing. By the growth of the online sector, you can book products via internet, which shows the effective communication, because you can use more than one way to book products. By using the above named departments DHL can offer endless logistic solutions around the whole supply chain for everyone within 220 countries all around the world. Not to mention that DHL has an excellent in-house consultancy.

4.2. Opportunities
Many possibilities can arise by the company’s strengths. The fact that DHL is the global leader in international logistics and they are providing in 220 countries in the world, gives them the opportunity to takeover new companies to grow, besides they can use emerging markets as a hub and expand to other countries. Due to the new markets DHL can also create a niche, by using efficient and effective inherent systems to comply with the regulatory body.

4.3. Weakness
Although many different and large operations are an opportunity, they also are a weakness. Because DHL have to standardize the operations, which means the loss of customized operations, which is so necessary to tie customers. Another weakness of DHL is the dependence on external agencies, ministries and other regulatory bodies. An example for that are the driving regulations for the drivers or the prohibition of starting planes at night in some big cities. Also DHL is showing not enough effort to get regulatory permissions. So not enough indicators suggesting performance with respect to getting regulatory permissions is a weakness as well.

4.4. Threats
Even if DHL is the most international logistics company and the global leader of the international logistics industry, there a many other companies doing the same business, such as UPS and local couriers. So the competition is a worse threat, which every time leads to price wars between the competitors. Another threat is the economic slowdown, the people keep their money, they don’t buy as many as they did years ago, so they don’t have things to transport. Also the government and the politics are changing their regulations from time to time as well as the taxes are changing. The external changes in the logistics industry can be a big threat.

5. Corporate Philosophy
5.1. Positioning Statement
DHL, the big yellow and red company, is the No. 1 company in the logistics industry. It has a very strong brand and is loyal to customers, as well as they are loyal to DHL. By using every transport mode, endless logistics solutions are possible. By considering these facts about DHL, I created the following positioning statement.

Y- Your
E- Every Day
L- Large
L- Logistic Solution
O- Organized
W- Worldwide
A- And with a
N- Number 1 Service. With
D- DHL on
R- Road, Sea and Air
E- Every
D- Day

5.2. Mission Statement
The four elements of the Mission Statement of DHL are:
1) We want to simplify the lives of our customers
2) We make our customers, employees and investors more successful
3) We make a positive contribution to the world
4) We always demonstrate respect when achieving our results

5.3. Vision Statement
In 2009, we laid out our goals for the future in our Strategy 2015, including our vision and mission for our company. Our vision emphasizes that we want to be The Logistics Company for the World. This goes beyond the simple fact that, as a global company, we are present in over 220 countries and territories, or that we are often the very first logistics company to enter new markets. Our vision stresses that we want to be the logistics provider people turn to – their first choice not only for all their shipping needs, but also as an employee or investor.