Express delivery company DHL is going to spend $1 billion with UPS to have its packages transported across North America, and parent company Deutsche Post "...says the vast majority of its customers on the ground won't notice the difference."
So what, exactly, does DHL do?
It serves 4.3% of the U.S. express delivery market with drop-offs, packaging, forms and, until this announcement, airplanes, all of which are branded with DHL's distinctive yellow with red highlights. It paid over a billion dollars in 2003 for the privilege of applying its branding to Airborne, a competitor.
Take away the planes, however, and you're left with a logo in search of reality.
UPS won't deliver DHL packages any better, faster, or more often than it does its own, any more than FedEx handles the U.S. Postal Service's outsourced delivery contract any differently than its does its own business.
Package tracking will be dependent on what UPS can offer, perhaps even complicated or limited by its integration into whatever system DHL uses (DHL ran into major operational woes when it tried to merge with Airborne's systems, and it owned that company).
Pricing won't diverge significantly from that of its former and current competitor, as they'll be based on the same functions (not similar, which also leads to pricing near-parity across the industry).
Maybe DHL can slash the portions of the business it still operates -- store personnel, the thinness of paper used for customer forms, whatever -- but those are the very tools that differentiate it from its competition/new partners.
So, like I said, what does DHL do?
Branding depends on customer preference; I buy one thing over another because I sense, or rely upon consciously or otherwise, a difference between the two (or the many).
There's a ratio of sorts in the business-to-business category, which I've never heard a guru name or quantify, but it goes something like this: buyers value the perceptual or emotional associations of brand less in direct proportion to how much more they have to rely on their purchase choices for objective, functional benefits.
That means B2B branding is about functional differentiation far more that it is about identity. In the expedited parcel delivery business, I bet that means some very tangible, measurable things about how work is ordered, input, processed, tracked, delivered, and serviced.
But DHL believes its customers are dumb enough to think that all it means is yellow branding, with a dash of red.
Am I the dim bulb on this one?
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