Marketing Strategy for DHL - Case Study Example

DHL Australia- MARKETING STRATEGY REPORT Executive Summary For DHL, marketing programs should take into account a person's ideal and believed self-images, and help him move from the latter to the former through such factors as product, brand, and advertising. A good marketing program provides the purchaser with a purchasing rationale that is aligned with self-approved reasons for product, brand, and store preference. Two main strategies, branding and innovations help the company to compete o the market and sustain its leadership position in Australia. The marketing philosophy knows no national boundaries. Assuming that companies seek to satisfy profitable markets, the concept ignores political divisions and views markets on a global basis. The acceptance of a multinational philosophy of business means that research and development, new products, and new methods of doing business must be designed for specific areas. It recognizes that differences in social, economic, political, and legal environments limit the mobility of total company resources. For American business it underscores the transcendence of national boundaries and the necessity of doing business with countries in varying stages of economic development. It also implies that business can become one of the least nationalistic of all institutions. Low price and differentiation strategy will help DHL Australia to attract more clients and increase its market share. For DHL, these strategies are a necessary concomitant of mass markets, large-scale organization, and increasing economic dependence. Such power should be condemned when it lessens competition substantially or restrains trade., Marketing power is usually temporary, breeding its own controls. For example, powerful manufacturers tend to create powerful distributors, such as retail chains. Powerful retail chains in turn foster the development of chains of independents. This orientation to potential markets, future competition, and anticipated developments results in nebulous guides at best. Marketing management must, therefore, develop concepts, techniques, and data that will show the changing dimensions of future markets. Introduction DHL is a global company involved in postal services finance and express. In DHL, a fundamental innovation represents a break with the past and fulfills a need that was not previously met. Air conditioners and television sets are examples of fundamental innovations -- both meet previously unfulfilled needs. Their introduction requires considerable change in consumer purchase-and-use habits. A functional innovation requires some change in consumer habits but meets a need previously fulfilled. However, it meets the need in a superior manner. Automatic washers and dryers are examples. In adaptive innovations, no new skills are required by the consumer to use the product, and no new functions are performed. It is the least complex of all changes in the innovation spectrum. Minor product changes, color style, and package alterations fall into this category. To become an innovation, an invention or new idea must gain consumer acceptance. Innovation is inextricably intertwined with, and governed by, buyer behavior. Innovation focuses on such behavioral problems as acceptance of new products, brands, services, and processes, the diffusion of marketing information, resistance to change, informal leadership, and acceptance of risk. As a business strategy, innovation greatly affects corporate growth, survival, and profitability. It reflects the changing market wants and needs of customers. Innovation is stimulated by competition and in turn generates counter innovations. Whenever new products or services are launched, business becomes concerned as to whether customers will accept them, and if they do, how long it will take for innovations to be profitable. Innovation as the Main Generic Strategy of DHL DHL Australia relies on innovation and new technology in order to improve its current market position and compete on the global scale. Many factors influence the acceptance of innovations. Income, economic, and ethnic variables are significant. Innovations seem to be accepted first by the socially prominent, prestigious, powerful, and wealthy groups who form the bulk of the innovators and early adopters. These people also appear to have higher levels of education, are more able to deal with abstractions, seem to be leaders in their organizations, and are venturesome and progressive.. New products are expected to function within the current social setting and must appeal to the average, well-adjusted personality. Some innovations, however, which have originated with Bohemians have, in a modified version, been accepted on a general level. Newness is not adopted or rejected by all consumers at the same time. The process by which customers accept new items is a complex one comprising several stages (Bearden et al 2004; DHL Home Page 2008). Market Opportunities Marketing opportunities, innovations, research and development, and other progressive activities stem from imperfections in the marketplace. In reality, our competitive scene is often one of price confusion and not of price clarity, as is assumed by the idea of perfect competition. Perfect knowledge does not exist, non-price competition is important, and there are fewer and bigger buyers and sellers, contrary to the assumptions of the economist's hypothetical competitive matrix. Technological advances, the growth of mass national markets, and the increasing resource requirements of research and development have an inevitable outcome -- mass-marketing organizations. In such a setting, innovation, research and development, and advertising become significant variables; and intensely competitive situations erode even short-run monopolies (Smith and Taylor, 2004). Branding Unique brand image of DHL based on its competitive position on the market and strong leadership position, helps DHL to attract potential clients and increase its sales. One consequence of the changing character of products and services in this country has been the growth of marketing management. To manage the abundant group of commodities that are distinctive in so many ways, and that embody symbolism as part of their utility, requires increasingly complex, analytical activities. Planning distinctive products becomes a major task, since demand cannot be taken for granted by any one company when there is abundance. Having well-defined preferences and money, people are free to choose. Not all consumers are potential customers for any specific company. Companies strive to create product advantages. The achievement of product differentiation and, hopefully, market advantage places greater emphasis on designing the product-and-service mix. Packaging, branding, and labeling become important factors in this emphasis (Drejer, 2002). Recommendations for DHL In Australia, DHL should take into account cultural differences and unique perception of its products. Population is an essential component of profitable markets. Yet population by itself is not sufficient; it must be supported by consumer willingness and ability to buy. To appreciate the role of population in the marketing scheme, we must view the family and the household as purchasing units, and consider such matters as stages in the life cycle, segmentation of markets by age groups, shifts from farm to urban living, changes in the size and composition of the family, the impact of education, and the addition of women to the labor force. Expanding markets are based on incentives to produce, grow more efficient, prosper, and improve oneself. Consumers are concerned with raising their own material well-being and cultural standards and providing wealth for future generations. For this, a favorable economic climate, technological advancement, and increased productivity are essential and reinforce the impact of an expanding population. Even so, the decades ahead will probably not witness smooth, continuous economic growth, but will be subject to irregular short-term variations (Smith and Taylor, 2004). 4 P’s The proposed strategy for DHL Australia is to reduce prices and differentiate its services. Competition is workable when it meets the goals and values of society. These include political and social goals as well as economic goals. In the economic realm, workable competition refers to buyer and seller access to a substantial number of alternatives, and to their ability to reject unsuitable offerings. Consumers desire product variations, and their consumption behavior decries the postulates of perfect competition. Brands, styles, colors, and labels have become significant. Consumers want new products, which often result from sizable expenditures on research and development that can be undertaken only by large enterprise. In reality, it seems that a market of partial monopolies has provided the greatest measure of abundance (Perreault et al 2003; DHL Home Page 2008). Promotion will involve TV programs and press clubs, newsletters, press releases. Press conferences will help to inform potential clients about recent developments and innovations, about future directions and strategy of the company. Newsletters will inform all clients about recent changes and innovations applied by the company. This information will help to create an image as a unique brand. Online promotion: on-line community (Lipe 2002). Pricing - flexible cost-plus pricing. This approach is effective because it will result in severe price escalation. To ensure stable market position and stable prices, the company will need to use estimated future cost method to establish the future cost for all car elements. This strategy will ensure that the selling price they set enables the company to cover all costs. Pricing and promotion strategies are used as strategies tools in order to respond to the changing environment and customers needs. Planning the selling price is a direct responsibility of the marketing channel manager (Kotler and Keller 2005). Product will involve new postal services for international customers combined with financial assistance proposed by DHL for repeat customers. Big business receives particular attention by governmental agencies and regulations. Larger business organizations are associated with economic control, lack of competition, and monopoly, which are deemed undesirable. Yet our economy is one of bigness and mass; we enjoy the benefits of mass business geared to mass. markets. Herein lies a pragmatic paradox leading to such unanswered questions as: does largeness of structure mean lack of competition? Does bigness imply unfair competition? Bigness per se is not illegal, and from the point of view of economic efficiency, it is often desirable (Kotler and Armstrong, 2005). Place Consumption is not a passive, costless, unenjoyable activity. Consumers do not receive their products and services passively or without considerable effort. They must make purchase decisions and expend energies, time, and money for both purchase and use of products. Consumers would like to do so conveniently. A dynamic, abundant economy with widespread discretionary purchasing power, leisure time, and private ownership of automobiles stimulates mobility -- economic, social, occupational, and geographic. Two sets of forces are at work encouraging economic and social mobility. First, a steady upward flow of immigrants leaves the lower economic and social ranks empty (DHL Home Page 2008). Implementation 1) August 1st - Start creating advertising campaigns and the internet website for consumers; September 15th – national and local advertising and promotion campaigns October 1st - the new service will be introduced October 8th- Internet promotions will begin for individuals who are looking to purchase their services. October 15th- Special promotions will start. A special attention will be devoted to the milestones (each month) which determine whether or not sales are being met. Review Monthly reviews will be used as an indication of the future growth. Sales reviews in each geographical region: will help to review sales patterns and buyers behaviors. National reviews of over all sales and the budget will indicate whether or not the company is on track (Hollensen, 2007). Opportunities exert a force to pull people up the ladders and are reinforced by immigration, which exerts a thrust to push them upward. It is only in a climate of abundance that both forces operate. The completely mobile person moves freely from community to community, from different economic positions, and from one social level to the next. The mobile individual is driven by the belief that he should never rest content in his existing station. He knows that society demands advancement as proof of his merit, and he often feels stress and insecurity and is left with no sense of belonging, either in the station to which he advances or in the one from which he set out. (Hollensen 2007). Consumer Characteristics Australian consumers are among the most mobile in the world. They are on the move as a result of job and living decisions. They seem to be willing to initiate and sustain the process of arriving in and departing from communities. They change homes and friends readily. Through the use of autos and trailers they have fashioned a mobile life style. They make their livelihoods in places distant from their home. They set out to achieve their own status instead of receiving family-endowed status. They are willing to select their own goals, and sacrifice and drive to achieve them. They accept the challenge of learning new ways, adopting new manners, becoming attractive to other individuals, and meeting the challenges of new living situations (Crawford 2003). Changes in life styles and market environment have had a direct impact on goods and services produced, expenditures, and the consumption process. For example, the effect of increased leisure time, suburban living, shopping centers, automatic vending machines, automobiles, television, and widespread geographic shifts on consumer wants and needs is pronounced. The shift from rural to urban populations, the growing number of women employed in industry, the decrease in the length of the work week, increasing productivity, and higher incomes all shape consumer behavior and, hence, market opportunity. Conclusion For DHL, self-image is a function of societal norms. Group membership and group belonging relate directly to self-esteem and favorable self-image; acceptance and the grant of status by various organizations embellish the phenomenal self. The ability of groups to foster the development of more favorable self-images encourages belonging; the ability of products, symbols, services, communications, and other aspects of the marketing program to enhance the self-image encourages consumption behavior. One of the bases for understanding consumer behavior in its psychological and sociological dimensions, the self-image concept adds an important perspective to economic theories of consumption and is directly related to motivation. List of References Bearden, W. O., Ingram, Th. N., LaForge, L.W. 2004, Marketing, Prentice Hall, London DHL Home Page 2008. 07 October 2008 www.dhl.com.au Dobson, P., Starkey, K. 2004, The Strategic Management: Issues and Cases. Blackwell Publishing, London. Drejer, A. 2002, Strategic Management and Core Competencies: Theory and Application. Quorum Books, Westport, CT, Crawford C. Merle. 2003, New Products Management. Irwin-McGraw Hill, London, 7th edition. Hollensen, S. 2007, Global Marketing: A Decision-Oriented Approach. Financial Times/ Prentice Hall; London, 4 edition. Kotler, Ph., Armstrong, G. 2005, Principles of Marketing. Prentice Hall, London 11th edition. Kotler, Ph, Keller, K. 2005, Marketing Management. Prentice Hall, London. Perreault, W.D., Cannon, J.P., McCarthy, E.J. 2003, Marketing: Principles and Perspectives. McGraw-Hill/Irwin; Boston, 4 edition. Lipe, J. B. 2002, The Marketing Toolkit for Growing Businesses: Tips, Techniques and Tools to Improve your Marketing. Chammerson Press LLC, Minneapolis, Smith, P.R., Taylor, J. 2004, Marketing Communications: An Integrated Approach. Kogan Page Ltd; London, S. 4Rev Ed edition, Read More