Dhl Pricing Strategy
DHL Case
1. Using the EVC framework (i.e., differentiation value), what opportunities exist for price customization at DHL? (In other words, where is there value that is not priced out?).
Based on the differentiation value, the following price customization opportunities exist for DHL.
- DHL can charge a premium for its extensive network span and coverage in remote areas that they serve, which are not serviced by their competitors, like Africa.
- Differentiation premium could be charged on high speed which currently DHL doesn’t do specially for parcels product line. Although DHL is cautious in charging for this differentiation because of lack of guarantee, their advertisements and strength are in that regards.
- Value added services such as package tracking technology, consulting for international shipping requirements are offered for free within the shipment price itself
- DHL’s strong custom relationship and network are high worth for parcel business specially for air express parcel business in Europe
- DHL is rated high on “value for money”, so customers think they get more benefit for the price they pay to DHL. There is scope for
2. What are DHL’s strengths and weaknesses relative to the competition?
Strengths:
- DHL has a well-established brand name that is synonymous with reliability and value for money
- Extensive International Network an accessibility of package shipment locations much more than its competitors.
- Faster Speed of delivery By using a variety of scheduled international carriers, DHL is able to optimize its transport network to minimize deliver times
- Worldwide scope, infrastructure, relationship network and people
- Custom network and relationships for faster parcel clearing
- Higher ratings in reliability and value for money
Strong Europe foothold
Weaknesses:
- Very less global contracts (only 10)/ Less MNC accounts when DHL infrastructure is suited to serve widely spread out global companies
- Single sales force
1. Using the EVC framework (i.e., differentiation value), what opportunities exist for price customization at DHL? (In other words, where is there value that is not priced out?).
Based on the differentiation value, the following price customization opportunities exist for DHL.
- DHL can charge a premium for its extensive network span and coverage in remote areas that they serve, which are not serviced by their competitors, like Africa.
- Differentiation premium could be charged on high speed which currently DHL doesn’t do specially for parcels product line. Although DHL is cautious in charging for this differentiation because of lack of guarantee, their advertisements and strength are in that regards.
- Value added services such as package tracking technology, consulting for international shipping requirements are offered for free within the shipment price itself
- DHL’s strong custom relationship and network are high worth for parcel business specially for air express parcel business in Europe
- DHL is rated high on “value for money”, so customers think they get more benefit for the price they pay to DHL. There is scope for
2. What are DHL’s strengths and weaknesses relative to the competition?
Strengths:
- DHL has a well-established brand name that is synonymous with reliability and value for money
- Extensive International Network an accessibility of package shipment locations much more than its competitors.
- Faster Speed of delivery By using a variety of scheduled international carriers, DHL is able to optimize its transport network to minimize deliver times
- Worldwide scope, infrastructure, relationship network and people
- Custom network and relationships for faster parcel clearing
- Higher ratings in reliability and value for money
Strong Europe foothold
Weaknesses:
- Very less global contracts (only 10)/ Less MNC accounts when DHL infrastructure is suited to serve widely spread out global companies
- Single sales force