Deutsche Post among finalists for INFORMS Edelman Award

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HANOVER, MD, March 26, 2010 – Deutsche Post DHL’s Global Branding Unit is among six finalists that will compete for the INFORMS 2010 Franz Edelman Award for Achievement in Operations Research and the Management Sciences in Orlando on April 19 at the Hilton Bonnet Creek.

The finalists for the competition, sponsored by the Institute for Operations Research and the Management Sciences (INFORMS®), include:

Deutsche Post DHL, with the University of Passau, for “Global Brand Assessment.”

The Problem: Following deregulation of monopolies in the European Union, the state-owned German postal service, Deutsche Post, was transformed into a private corporation in the early 1990s. Top management decided to build a global logistics business to complement the traditional domestic mail services business. Part of this vision was acquiring DHL, a worldwide Express company founded in America in 1969. Management needed to establish a truly global brand to unify and migrate other national brands that had been acquired. Building from scratch requires huge brand investments and determining the optimal investment level by country. The challenge is to identify the target brand elements and activities that are consistent with the global brand positioning and concept but also adaptable to the specific requirements of the local market.

The O.R. Solution: The approach is based on hierarchical customer development process and its brand-related drivers. The fundamental assumption is that customers pass through a stylized hierarchical purchase process that represents different stages of customer development and value to the firm. In DHL, these stages are Brand awareness à Brand consideration à Brand usage à Choice of main provider à Choice of sole provider. Customers generate different returns depending on the stage, with sole provider customers contributing the largest share to sales and profits. The impact of brand and marketing efforts on customer behavior along this funnel comes from estimating discrete choice models. A constrained profit-maximization approach produces recommendations for allocating marketing resources across different brand investment categories.

The Value: The impact of the global brand assessment tool on DHL was significant. Within less than 10 years, DHL developed into a truly global brand that shares common core brand features among customers across the continents. The global success story is reflected in the substantial increase in brand asset value. DHL made it to the top 100 global brand list of Millward Brown in 2009 when it was valued at USD $9.7 billion. The tool has also made a strong impact on strategy and the organization as a whole.

The six 2010 Franz Edelman finalists are:

  1. The Delaware River Basin Commission for “Improving Water Release Policies on the Delaware River through Operations Research”
  2. Deutsche Postal DHL
  3. Indeval for “Indeval develops a new operating and settlement system using Operations Research”
  4. New Brunswick Canada Department of Transportation for “Achieving Transportation Asset Management via Operations Research”
  5. Procter & Gamble for “Inventory Optimization at Procter & Gamble: Achieving Real Benefits Through User Adoption of Inventory Tools”
  6. Sasol for “Stochastic Operations Models at Sasol”

 This is the 39th year of the prestigious Franz Edelman competition. The winner will be announced at a special awards banquet on April 19 at Applying Science to the Art of Business: the 2010 INFORMS Conference on OR/MS Practice.

Additional information about the 2010 Edelman Competition can be found online at URL. Additional information about the INFORMS Orlando conference is at http://meetings2.informs.org/Practice2010/.

About INFORMS

The Institute for Operations Research and the Management Sciences (INFORMS®) is an international scientific society with 10,000 members, including Nobel Prize laureates, dedicated to applying scientific methods to help improve decision-making, management, and operations. Members of INFORMS work in business, government, and academia. They are represented in fields as diverse as airlines, health care, law enforcement, the military, financial engineering, and telecommunications. The INFORMS website is www.informs.org. More information about operations research is at www.scienceofbetter.org.

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