Friday, November 27, 2009

Marketing Management - DHL and SLSNZ

DHL & SLSNZ Marketing Management Memo

The Key issue:
No one has assessed if the partnership between DHL and SLSNZ is of benefit. To quote Walker (2009); “Market Research has indicated that the public perceptions of both brands are high, and the relationship has not been detrimental to either” (p394)

Why is this concern?
While the decision on SLSNZ’s part was that of financial return, with brand balance – DHL is not receiving any direct tangible benefit for its participation. So it can be assumed that they are doing this for multiple reasons:

- Brand awareness
- New potential for emerging “goodwill marketing”
- Strategic Planning

However how do you put a figure on these things? How can it be shown to be beneficial to DHL? There would clearly be a financial expenditure on DHL’s part for this marketing exercise – how can this be accounted for?

So how does this fit with DHL
Brand Awareness
DHL is already a well established brand, but it has maintained a dominant market presence. This needed to be reflected in its sponsorship of SLSNZ. This is why not only is it ‘mentioned’ with kind regards, but also DHL being the juggernaut that it is, is mentioned everywhere. On the backs of surf lifesavers shits, on the posters on the wall.

Emerging “Goodwill” Markets
SLSNZ has well structured procedures to protect its own brand name and view in the public eye – which will always positive connotations associated with it. Therefore, having related social values and ethical principles (Walker, 2009, p 35) as SLSNZ (due to being effectively ‘partners’) will give DHL a new-economy strategy (Walker, 2009, p 259) for this new ‘morals and ethics’ market that has been established recently.

Strategic Planning
There is the possibility for DHL to use their ‘goodwill’ credits as an emotional leverage on the market – to offset distaste in the market caused by some of DHL’s operations. Previous sponsor of SLSNZ, BP, did this quite well. Likewise this can be similarly attributed to Marlborough and racing, or Caltex and Solar Energy.
There also would be a significant blocking strategy – as only a few services (that require public sponsorship) are considered ‘lifesaving’. By partnering with SLSNZ, DHL has gained the advantage, blocking its competitors from using such a high key player in the stakes of the ‘ethics’ market.

Where is the problem then?
The problem that exists is very simple – How do you test to see if this is in the best interests of the DHL?
Should this much resources be allocated to a task that has no returns? (Walker, 2009, p295)
Is partnering with SLSNZ, any better than partnering with St John Ambulance? Will more brand awareness occur?
This has to be considered a long term (and very expensive) investment. As the results will start off as intangible for quite some period of time.

Walker, O, Gountas, J, Mavondo, F, Mullins, J. (2009). Marketing Strategy: A Decision-Focused Approach
N.S.W. Australia: McGraw-Hill

Indirect References:
Pride, W, Ferrell, O, Elliott, G, Rundle-Theile, S, Waller, D, Paladino, A,. (2008). Marketing : Core Concepts & Applications
Qld, Australia : Wiley