Strategy In Direct And Interactive Market: A Case Study On DHL

Background of the product or services

Discuss about the Strategy in a direct and interactive market.

Stadtler (2015) opined that business organization primarily aims to draw the attention of target market by maintaining superior quality of products as well as services. As per the point of view of numerous eminent scholars maintaining product and service quality is not the only factors, based on which the business organization can maintain image and reputation. Along with maintaining the product and service quality, business organization would have to focus on making effective promotional plan with the help of value analysis. DHL is one of the most prestigious logistic divisions occupying a predominant place in the realm of logistic sectors. After staring their journey as effective courier and parcel service providers from Hawaii into Pacific Rim to mid-east and European Continent, the organization has focused to make in-depth overview about the importance of  expanded their entire business wings in the international market (Dhl.com, 2018). This kind of courier service is surrounded with 170 countries by involving 285,000 employees in various sectors.

DHL while running the entire business process in different multinational countries has aimed to deliver the services within time. As a result, customers do not have to wait for a long time in receiving the services. More than 76,200 vehicles are purchased for maintaining the shipping method properly to the destination. The supply chain managers with the help of advanced method of technology can keep a constant update regarding the deliverable of services. The employees associated with the shipping department are well trained in maintaining an effective communication with the clients. As a result, the entire services can be delivered in smooth and systematic way (Christopher, 2016). This very specific study has aimed to deliver the entire services in stipulated time along with low cost. In quest of maintaining an effective shipping method DHL would have to make effective promotional plans and policies. More than 50% of the express of DHL shipments is delivered to Indonesia. After making an effective value analysis it can be concluded that DHL is one of the leading groups with 480,000 in over 220 countries. 

Research method is the systematic procedure of collecting appropriate data and information with the help of numerous methodological tools. In order to gather relevant data and information regarding entire supply chain process of DHL, some of the most effective issues of DLH within shipping procedure have been identified.

Research method

In quest of acquiring proper knowledge about the necessary threats of DHL in maintaining supply chain method and their challenges in tracking the customers’ location properly the study has focused to select positivism research philosophy. This very specific research philosophy is highly effective in maintaining in-depth observation about the research issue. By using deductive approach, the researched has made an in-depth case study on how the supply chain managers have to face difficulties in delivering the product towards proper destination (Golicic & Smith, 2013). In order to evaluate the research issue the study has chosen descriptive research design as well. Descriptive research design enables the researcher to explain the entire research problem from different point of view. By maintaining a keen observation on the research problem, necessary information has been collected on how supply chain managers are facing difficulties in their operation process.

Data collection is the systematic technique of gathering appropriate data and information from different reliable and valid resources. Data collection procedure is constituted with two major types including primary source of data collection method and secondary source of data collection method (Huo, 2012). In this very specific study, primary source of data collection technique has been used by involving 50 employees associated with supply chain management. On the other hand, 5 supply chain managers have also been involved in order to collect quality data resources.  An effective interview session has been conducted for collecting direct feedback from the managers. The researcher has gathered information how to the entire supply chain process of DHL is going to be expanded in various geographical boundaries.

Data analysis is the systematic method of evaluating appropriate information from different point of views. While collecting various data the researcher can use various statistical tools like hypothesis testing, regression analysis, finding central tendency (Walker & Jones, 2012). In this very specific study, the researcher has found central tendency by evaluating mean, median and mode of data. With the help of a graphical representation the entire findings of data is presented at a glance. On the other hand, the feedback of the five supply chain managers has also been presented in data analysis part. The managers have stated their own point of view on how employees have to face difficulties in delivering the product to proper destination.

Sampling method is the systematic procedure of collecting appropriate data and information from a specific number of people amidst large population (Yang et al., 2013). Sampling method is constituted with two major types including probability sampling technique and non-probability sampling technique. This very specific study has focused to select non-probability sampling technique by involving 50 members from logistic sectors. Non-probability sampling method enables the researcher in involving specific group of people instead of selecting randomly. In this kind of situation, appropriate data has been collected on how DHL had to face challenges in tracking customers’ destination. Based on the challenges, the business experts of this organization have focused to make promotional plans in making awareness among the target customers.

Value analysis:

In quest of reducing the unnecessary cost among entire operation process of DHL the business experts have designed to focused on some most effective areas where value proposition can be reduced.

• Reducing cost on intermediaries:
• Design systematic assemble order of inbound logistic
• Using technology for reducing unnecessary labor cost

Figure 2: Design the areas value cost reduction

(Source: Liao,  Egbelu & Chang, 2012)

Value analysis is one of the most effective ways of reducing operation cost. With the emergence of technology, DHL has reduced their operation cost in order to render more profit in the logistic sector. Supply chain managers of DHL before making value analysis have decided to identify the areas where business experts have to bear unnecessary costs. The purpose of identifying those areas is to highlight where the organization is bearing additional costs (Rod & Ashill, 2013). As per revenue structure of 2014, DHL has total €56.63billion revenue with the profit level of 2.016 billion among $41.42 billion assets. On the other hand, as per the annual data of 2016 the revenue growth of DHL has been increased up to 2.7 percent. In quest of increasing the entire profit level on 2020 DHL has focused to reduce unnecessary cost in several areas within the supply chain process. Following are the specific areas where the organization like DHL is bearing unnecessary cost (Malhotra & Mackelprang, 2012). In search of reducing the cost of values within entire supply chain process of courier services of DHL Porter’s five force of value chain analysis is conducted:

It has already been identified that DHL should design a systematic assemble order for designing and storing the products. The products should be stored by following a proper line. Otherwise, large number of workforce strength is required to maintain inbound logistic storage (Lozano, 2012). On the other hand, if the supply chain managers of DKL can make a simple storage line the supply chain executives do not have to face difficulties in distributing the products from warehouse. Therefore, on one hand, the organization can reduce labor cost. On the other hand, employees can save their time of deliverable as well to proper destination.  

The emergence of technology is one of the most effective ways of reducing operation cost. If the organization can invest money for technology for once, the business experts do not have to bear the employee cost (Choy et al., 2012). For an example, DHL by using SAP based ERM (Enterprise Business Management) process can control the entire data technologically. Employees do not have to put effort in maintaining the coherence of data.

In order to reduce the cost of outbound logistic DHL can render a change on intermediaries. DHL should not invest money on any transportation agency for delivering the services within time. After the business expansion in various international boundaries, DHL should purchase more vehicles than 76,200. As a result, both the service providers and service users can equally keep a track on the overall delivery process of products. On the other hand, radio frequency identification is the system of keeping a constant track of transport. Both the service providers and service users can equally keep the transportation track (Chuang, Liao & Lin, 2013). As a result, customers do not have to take additional burden about the certainty of product delivery.

In order to reduce the entire operation cost marketing and sales is one of the most effective factors based on which value can be reduced. DHL after expanding their business in global market should focus on digital marketing communication. Digital marketing communication is the systematic method of promoting the products and services in different geographical locations. The marketing managers in order to sale their concept does not have to invest large amount of money for social media purpose (Kumar & Chandrakar, 2012). On the other hand, digital media is the only communication tool based on which DHL would be able to grab the attention of large number of customers of multinational countries.

Delivering couriers and parcels are the primary products with which DHL deal in satisfying customers’ needs and demands (Kwateng, Manso & Osei-Mensah, 2014). If the organization can reduce transportation cost, operation cost, distribution cost within supply chain procedure the value of the product would be increased automatically. The profitability level of the company would be enhanced.

Along with making an effective value analysis method, DHL should make an effective promotional plan based on which the organization can draw the attention of customers from global market. As per the target customer of DHL, the business experts have selected the market of Indonesia, San Francisco, Honolulu and Germany for delivering products. By making effective geographic, demographic and psychographic market segmentation, the organization has selected the target customers effectively.

As already stated, Indonesia, San Francisco, Honolulu and Germany are the specific geographic areas based on which the service process of DHL is surrounded. As per the demographic market segmentation, people having average level of income status can easily afford the services of DHL within proper time. In addition, this particular organization always intends to maintain antidiscrimination within the services (Hazen et al., 2014). As a result, both male and female customers can get equal priority and response from the service providers. In addition, psychographic market segmentation believes that organization of various geographical boundaries and attitudes can show equal interest in purchasing products and services. DHL never tends to show their biased attitude to the customers. People from different cultural attitude and backgrounds get equal priority and response from the service providers of DHL.   

The primary objective of creating an effective promotional plan is to draw the attention of customers from different geographical boundaries and attitudes (Bartolacci et al., 2012).  In order to expand the entire business process in global market the marketing executives of DHL have given priority on digital promotional activities rather than using traditional media tools.

Facebook, Twiter, Youtube are the social media promotional tools based on which DHL can grab the attention of customers. As per the current market scenario, this specific organization is in the quest of business expansion in different geographical boundaries. Social media pages are one of the most effective tools where the marketing executives can reach the doorsteps of global consumers (Fry, 2014). In addition, the business experts in order to communicate with the international customers have to render multilingual flexibility so that both the customers and the service providers can make an effective communication with each other. In order to make an effective visual effect, the marketing managers of DHL can easily upload visual effects of their products and services. Based on the views’ response and feedback business strategies are made and prepared.     

Online advertisements, online promotional campaign on official websites and e-mail marketing are the several ways, based on which the attention of international customers can be drawn. In order to draw the attention of young generation the significance of online marketing is undeniable. Indonesia, San Francisco, Honolulu and Germany is completely technologically advanced countries (Bayne & Cianfrone, 2013). Inhabitants belonging to this very specific country are very much advanced in technology. In this kind of situation, online marketing would be very much beneficial for both the service providers as well as services users.

As per the point of view of Ward & Yates (2013), young generations are not the primary target customer of DHL. In order to draw the attention of middle-aged customers the organization should focus on dealing with traditional media tools as well. Newspapers, electronic media, hoardings, billboards are the necessary traditional media vehicles based on which the organization can introduce their products and services (Rizwan et al., 2013). As a result, marketing executives would be able to grab the attention of various customers from different age group. One of the most effective drawbacks of using traditional media tool is that this particular promotional tool is not effective for drawing the attention of international customers.

A budget has been prepared for making an effective promotional plan for DHL. Before investing money in different promotional vehicles, the business experts should get a clear and in-depth overview about the value of promotional activities.

Figure 2: Required budget for promotion

(Source: Created by the author)

Conclusion:

The study has focused to make in-depth overview on how DHL has faced innumerable difficulties in delivering their courier services to international market. By implementing market segmentation strategy and promotional mix strategy, the business experts have made an effective promotional plan in order to draw the attention global customers. With the help of effective value analysis, the study has evaluated the current market position of DHL. Some of the major issues have been highlighted that DHL has faced immense difficulties in tracking the customers’ location properly. By applying methodological tools like positivism philosophy, deductive approach and primary data collection technique the feedback of organizational managers have been collected on how DHL has to face challenges while shipping the products.

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