DHL China was founded in China since 1986. Under the 50-50 joint venture with Sinotrans, DHL tend to develop a comprehensive service network in 318 cities around China (DHL, 2009). Obviously, China is one of the most important steps of DHL’s globalization plan. At the second part of this essay, we are going to look at the marketing strategic, management style and the corporate social responsible when a western organization operates in Chinese cultures.
Marketing strategic in Australia and China Providing specialist logistic solution is the main selling point for DHL in Australia and China.
In the view of marketing, what is produced and what to service must match to the needs and wants of consume (Kotler et al.2007). No matter in Australia or China, large number of competitors is the major problem for DHL to survive in the logistic market.
DHL knows that their main marketing strategic is not the lowest price but they really aim to meet customers’ entire express delivery needs.
DHL states in their 2008 annual report that they are not only logistics experts but also specialists in their customers’ industries (DHL, 2008). In deep, DHL offers some special programs like providing bulk-breaking facilities and planned production support for precision delivery schedules, in order to match the needs and wants for different customers’ industries (Conley, 1996).
Further more, the relationship customers are the target customers for DHL internationally. In order to target the correct group of customers, DHL defines their customers into three segments including strategic customers, relationship customers and direct customers (Lovelock et al.
2007). Lovelock et al. (2007) go further and indicate that relationship customers contribute over 75% of profits to DHL. In here, a relationship customer is who use DHL to ship their products and documents regularly, Therefore, DHL need to focus on the relationship customers segment in order to maximum profitability.
As stated in above, no matter market strategic and target customers, DHL trend to apply the same standard to Australian and Chinese customers. However, the way that they maintain their relationship customers will be different due to the cultural difference between Western and Eastern country. Facing the tough logistic competition, how to maintain the customers’ loyalty has become another issue for DHL. In Australia, the company will receive a 40%off discount when they sign up a “first choice” contract with DHL. The “First Choice” contract requires their relationship customers always need to choose DHL express as their first choice and promise to use DHL service more than 50 times per month (DHL, 2008). Therefore, the successful customers’ loyalty can be built up through by the discount offer and First Choice contract.
On the other hand, the “First Choice” contract could not exists in China due to the cultural differences. Due to the shared Confucian heritage, it differs quite markedly from western norms and values. Instead of signing a “First Choice” contract, DHL more prefer to build up their “GuanXi” (trust) relationship with their customers. Obviously, the word “GuanXi” is a brand new concept for DHL and it never exists in DHL’s marketing sector before.
According to Chan (2008), the concept of Guanxi refers to the connections to secure favors in personal relations. The DHL-China public relations manager Geoffrey Bye go further and claim that DHL can not just build up their relationship with Chinese customer on the contact but the company actually need to build up a long term trust on each other(Management in Chinese cultures,1998). Mr.Geoffrey indicates that Chinese customers more concern about “GuanXi” rather than price when they do business with a company. Therefore, maintain a good GuanXi is the most important element for DHL maintains its customer’s loyalty in China.
Reference list:
Kotler, P, Brown, L, Adam, S & Armstrong, G 2007, Marketing, 7th edn, Prentice Hall, Frenchs Forest, NSW
Deutsche Post AG 2008, DHL 2008 Annual Report, Deutsche Post AG, viewed 13 March 2009, < http://investors.dpwn.com/reports/2008/gb/en/index.html>.
Conley, J 1996, ‘Emerging Profits’, International Business: Strategies for the Global Marketplace Sep96, Vol. 9, p16.
Loverlock, C, Walker, R, Patterson, P 2007, Services marketing: an Asia-Pacific and Australian perspective, Pearson Education, N.S.W.
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