KEY DECISION MAKER:

Ali Sarrahfzadeh, DHL’s worldwide sales and marketing manager, had to present his
recommendations on pricing at DHL’s annual director’s meeting. 

KEY ISSUES REMARKS

 Pricing strategy PRICE LEADERSHIP STRATEGY
Charge premium prices and deliver
superior value.
MARKET RESPONSE STRATEGY
Independent in each country
 Pricing structure Weekly , monthly in all countries.
Same price charged between 2 cities.
Different price for parcel and documents.
Different price for different industries
Special prices to MNCs
 Discount program Volume discount
Based on units, weight or revenue
Frequency discount
 Price setting responsibility Centralized
Headquarters set all the prices around the
world.
Decentralized
Regional managers set all prices,
headquarters offered counsel and support
Hybrid
Pricing committee including managers
from headquarters and regions would set
the prices.
 Decision making unit The unit was different for 2 services.
 Customers split their Air Express Their business was split between
business among several firms geographical regions.
DMU was often different for 2 services.
 Formal Vs handshake contracts Only 15%comprised of formal contracts.
 Problem with PRISM It could not consolidate the profit of given
customer from different countries , it was
not extensively used by all DHL offices.
 CONCLUSION
 DHL reliability is 8.4 which is more as compared to any of the competitors and their
value for money is rated 8 which is more then others except UPS but UPS has a
drawback of limited reach in global market.
 Emphasis has to be paid on coordination between documents and parcel services and
also between geographical regions.

RECOMMENDATION
DHL have a good strategies for the pricing policies. Although have a highest price,
DHL can hold out the market share by improve the quality of their service, so DHL
should continue this strategy. But, DHL still have an attention with the competitor do
and to the customer needs.
Pricing Strategy – Price Leadership
• Past and current – DHL charge premium price for delivering superior service.
•Maintain image in the eyes of customers DHL delivers superior value.
•Decline in price might be seen as decline in quality of service – may switch to other
provider.
Pricing structure
•Difference in price charged for documents and parcels. Should be differentiated
because of
additional costs incurred for parcel shipping.
•Difference in price across different industries. Shipping fee should be the same for
customers across different industries
•Offer special price for multinational corporation seeking to cut deals if they allow
DHL to
handle all of their express shipping accounts.

Should be exercised and must help retain and gain large accounts for DHL’s
marketing team.

The problem of coordination between services and geographical region can be cured
by hybrid pricing strategy.