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Dhl Worldwide Express Case Study

720 words - 3 pages

As a multinational logistics corporation, DHL has a diversified pricing strategy, which based on the branches and subsidiaries in each market. Normally, the director of each nations’ SBUs decide their price, for example, according to the price data published by DHL 2014, their price for EU is €3.95 for the first kilo, while the price for international rise to €4.50, in compare with its competitors such as FedEx, UPS, DHL’s price level is about 20%~40% higher. However, they are all based on a standard covers the nature of service rendered, weight and destinations. Beyond the ordinary services, customers could also choose to add insurances to cargos.

There are some pricing challenges ...view middle of the document...

- The lack of policy coordination in the current pricing, and is difficult to utilize their overall marketing advantage (regional integration)
Evolution of pricing policy As DHL expanded service into new countries throughout the 1970s and 1980s. Base prices and options DHL’s base prices were calculated according to product (service), weight, origin, and destination. Prices were often higher for parcels than for documents of equivalent weight due to extra costs for customs clearance, handling, packaging, and additional paperwork. FedEx charged the same for parcels and documents. Shipment weights were computed in pounds in the United States and in kilograms in all other countries. Moreover, weight breaks varied among countries. For example, in Hong Kong breaks were every half kilogram, and in Spain, every two kilograms. Some DHL executives believed that, for the sake of simplicity, DHL’s weight breaks should be the same worldwide.
For different districts, there need for different prices so that different structure and policy provided. Also the country manager has power for independent pricing. For the marketing GHL loses the advantages because the different pricing and decentralization of the price system. As one country manager put it: “We and the customer both want a simple pricing structure. PRISM just provides more information, adds to complexity, and takes time away from selling.”

As DHL is...

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