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Aniruddha KulkarniAbhay KamathIshwar Saxena

J DeepakJ Suresh

K Pavan KumarKrishnadas Dhake

Sushanth GVivek Jain

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Pioneers of Air Express Industry and worlds leadinginternational express delivery network

Presence in over 70,000 cities and towns

Over 25,000 employees trained in over 100 languages

Comprises of DHL Airways and DHL International Major Revenue from DHL International

Offering two services: Worldwide Document Express andWorldwide Parcel Express

Numerous VAS, computerized tracking LASERNET ,24 hr

customer service every day of year and proof of delivery Market share of 44% in terms of revenue.

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44

7

18

4

27

Market Share

DHL

FedEX

TNT

UPS

Others

8.4

7.77.8

8.18

7.3

7.5

8

6.6

6.8

7

7.2

7.4

7.6

7.8

8

8.2

8.4

8.6

DHL TNT FedEx UPS

Reliability

Value For Money

Ratings of AirExpress Carriers

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1989 were $3.4 billion which increased to $4.3 billion in

1990

2 main products: document delivery and parcel deliverywith a split of roughly 25:75

1989 parcel sector grew by 40% while document by 15%.

Industry is expected to grow at 28% compound annualrate.

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Strengths Strong Network Brand Image Capacity Utilization Experience Customization of rate

Weaknesses Complicated PriceStructure Headquarters vs Region

Opportunities Improvements in PRISM Increase contracts withMNCs Heavy freight corridor Domestic US market New markets

Threats FedEx undercutting DHL Internet boom Customers usingmultiple carriers

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Pricing Strategy : Price leader vs Market Response

DHL charges average 10- 20% more fee than competitors

Increased competition from FedEx, TNT, UPS

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Pricing Structure: Current Structure

Fixed Monthly Fee

Volume based discounts

Weighted half kilogram Complexity of pricing structure

Different weight breaks across geographies for parcels

Discount structures

Local profit- cost analysis

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Price Setting Responsibility: Centralized vs Decentralized vs Hybrid

Regional manager responsible for regional profits

Most of the price discount negotiations happen at locallevel

Uniform structure across organization will improveinformation systems effectiveness

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PRISM (Pricing Implementation Strategy Model):

Software to analyze costs, determine prices

Historical pricing data analysis for future profitability

Not able to consolidate profits for customers spread across

countries Managers perceive it as complex, avoid its use

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Pricing strategy

Continue to be Price Leader

Charge premium prices & deliver a superior value.

Communicating value proposition to customers

Mixed pricing structure Merging the monthly handling fee with a discount

structure.

Discounts

Based on volume

Based on revenue contributed by the customer.

The parcel delivery and document delivery should havedifferent rates,

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A subsidized pricing strategy for the MNCs Costs for different lanes are different, the pricing and

discounts for specific routes should be different.

Special services -urgent or secure deliveries for

nominal fee. The price setting responsibility adopted should be

composite having

Region managers for local market conditions,

Representative of Head quarters

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DHL could acquire local courier services in new markets. PRISM

needs to be modified

Use at all DHL offices.

should be made simpler

DHL should try to convert more handshakecontracts toformal contracts

Increase penetration in customer segment of monthlybilling > $15000 [Exhibit 8]

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Group 9