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  Delivering Global Brands   Delivering Global Brands  Edwin Colyer  
         
 
Delivering Global Brands If you don't trust the national mail system, commercial delivery is an easy, and readily available, alternative. Whether you go with the brown of UPS or purple of FedEx, you can send a package to Tallahassee or Taipei. And if you haven't heard of TNT or Exel, take a closer look the next time you pass a delivery truck on the road.

Over the past few years the logistics and express industries have witnessed tremendous consolidation on a global scale. "More and more of our customers are operating on a global playing field. They are consolidating, therefore we have to consolidate supply chains too," explains Rebecca Salt, head of group PR and marketing at Exel.

Dr. Clemens Beckmann, head of corporate strategy at Deutsche Post, agrees that most of the impetus is on the customers' side. "There's globalization, and the increasing complexity in companies' supply chains. They prefer to have fewer logistics partners. There is also a move towards total outsourcing, where a company cooperates with one partner who has much more responsibility for supply chain operations. One main reason driving consolidation comes from the logistics service providers themselves, and that's economies of scale. If you have a network you need a certain volume."

Most of the logistics operators also agree that it takes a global brand to establish a global service. "You can't have one without the other," says Salt. "I want to give you one name and one number. This is the key thing; we're here to provide a global integrated service. From a client's perspective we offer an end-to-end solution."

Global expansion has come through a combination of organic growth, mergers, acquisitions and the formation of strategic partnerships. Together these strategies help to build geographic reach and "plug the gaps" in service offerings.

 
Exel, for example, was formed three years ago from the merger of Exel Logistics and Ocean Group, a freight forwarding company. Since then the company has made seven additional acquisitions. With so many companies to integrate, it quickly becomes apparent why a single brand simplifies the marketing process.

But such persistent merger and acquisition activity creates some serious headaches too. Most of the small logistics and express specialists have a high profile in their niche markets or home countries. How do you rebrand them without losing either brand equity or customers?

A transitional plan usually allows the newly acquired company to retain its own identity. In the case of Exel's purchases this usually means tagging "an Exel company" to its name and logo. "We don't take every vehicle and change the livery immediately, but do it on a gradual basis. For example, when the company's letterhead runs out we replace it with Exel," Salt explains.

TNT has taken a similar approach. "We had an issue with our service provision in France. We bought a French company, Jet Services in 2000, which we merged into the group in 2002," says Andrew Huestis, marketing and communications director of TNT Express. "The company is called TNT Jet Services. Eventually it will become just TNT, but Jet Services had a better brand recognition than TNT, and we didn't want to lose the brand equity."

Although in these acquisitions the identity of the acquired company eventually disappears, the strength of the old company's brand is still important. UPS spokesperson Steve Holmes points to his company's acquisition of Fritz. "Fritz... was a very strong brand in the freight-forwarding arena. We felt comfortable with bringing Fritz under the UPS Supply Chain Solutions name because we knew its operational network was strong. Associating it more closely with the UPS name strengthened the breadth of value they offer because it is now combined with UPS’ global network and other expanded capabilities. Typically we leverage the UPS brand or we work to build it where it is not as well recognized as we would like it to be."

For Deutsche Post, however, the strength of the DHL brand when they bought the express delivery firm in was central to their strategy. "If we acquire medium or small companies the most important aspect is their service quality fitting in with our core brand values. In local companies, the brand is not strong and brand building is weak," says Beckmann. "We still analyze their brands and try to migrate their values to the global brand."

"We want to establish one global brand," says Deutsche Post's head of corporate marketing, Wolfgang Giehl. "That's one important aspect of buying DHL. Now we are putting all our activities under the one brand. At the end of the day it is easier to build one brand."

Deutsche Post merged all its logistics (previously Danzas) and express operations (DHL and Euro Express) under the single DHL brand on April 1. However, the transition period began months before when the Danzas brand symbols were redesigned in yellow. Now DHL has joined the yellow Deutsche Post family too.

 
"We don't believe that re-branding under DHL is risky," says Giehl, "because we trust in DHL as a strong and reliable brand. It is much easier than complete re-branding with an artificial name like Royal Mail trying to become Consignia.

With all these identity changes, it is not just the customer, however, who needs convincing. "You also risk losing the loyalty of employees who have an identity with the old brand," says Deutsche Post's Beckmann. "That’s why we have built up an internal communications program, so everybody is going to feel part of the new brand family."

These new families now have thousands of members spread around the globe. Their company brand holds them together and unites their purpose. "If you're operating on a global basis there's no excuse for not having a global brand," asserts Exel’s Salt.    

[30-Jun-2003]

 
  
  

Edwin Colyer is a science and technology writer based in Manchester, UK.

     
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