What has been the impact of the internet on the USPS? Provide specific examples for how the internet has reduced revenues for the USPS.
The internet has been an evolving entity since tits advent and popular use in the 1980s. However in the last few decades leading to the year 2007 the internet has been able to evolve extensively, whereby changing the way business is conducted today.
One of the main effects that the internet has had on the US economy is putting the USPS almost out of business. The United States Postal Service has suffered a severe set back form the introduction and the widespread use of the internet technology. This is mostly because of the fact that the internet has made the method of communication easier, faster, speedier, more efficient and less costly than ever before. It is now possible for us to chat with people all around the United States as well as all around the word in real time though the internet by employing the use of net meeting software and online chatting software. Video and audio streaming of the conversation is possible. Aside from this the ease with which people can email each other and send each other gift in a much cheaper, affordable and convenient manner form the comfort of their living rooms has made the service offered by USPS redundant.
The evolution of the internet pertaining to the increase in online shopping, trade of online and electronic greeting cards as well as online malls, grocery and departmental stores has enabled people to transfer their parcels by booking them though the internet only. Moreover the integration of banking functions with the internet has now also reduced the need for the people to transfer and pay their bill through the USPS. This has reduced the demand and the utilization of the United States police Service by The population of the United States, resulting in a large and substantial decrease in the revenues for USPS. “On of the first issues Henderson covers is the USPS’s loss of about $700 million dollars in revenue for that fiscal year (Annual-1999 8). It seems that the Internet was knocking profits out of commodities at a very rapid pace, and people were using electronic services more than other purchasing methods. The new consumerism in America was taking its toll on the USPS.” (Albright, 2001)
Place yourself in the chair of the Director of Marketing for the USPS, responsible for revenue generation via skilful marketing practices. Share insight as to the kinds of mail that are being sent via the USPS in 2007 and what you project will be the kinds of mail that will be sent five to ten year from now. As Director of USPS, what are your possible concerns as you look to the future and the next five years and beyond?
The kind of mail that is being sent though the USPS includes greeting cards, post cards, letters of correspondence. The kinds of mail that are being sent through the USPS in 2007 pertain to the correspondence between civil and government bodies with the population. Aside from this the corporations also make use of the postal service to send bulk letters, pamphlets and memos. The USPS is also handling the courier of parcels and packages for government and corporate clients. However their clients use both private couriers services as well as USPS.
The out of road and remote towns still tend to use the USPS, however this is mostly for delivery of non critical items and mails. The people in the rural and remote location of the United States also tend to make use of specialized courier services like Federal Express and Western Union for the transfer of money and critical items.
However if the company USPS does not take any action, regarding attracting the customers and providing them with up to date and diverse portfolio of services, then it is possible that the company may have very limited clientele left. The only people who would be utilizing USPS in the future then would be the corporations and the government societies and business who would be looking for a discounted method of sending bulk mail. However even the size of these contracts would be limited due to the adoption of technology by the business in the economies around the world. No the other hand if the company is to adopt technology then it is possible for the company to handle mail, courier and message/parcel delivering service in real time from the internet as well as on the grounds.
What business STRATEGY (not marketing tactics) would you suggest the USPS Director of Marketing embrace in the profitable if the USPS is to be profitable in the year 2012? In effect, what would you suggest should be the services that the USPS should offers that given the impact of the loss of First Class Postage revenues? Make a recommendation that reflects where the USPS has been, is now, and where it needs to go so as to embrace the Marketing Concept.
The business strategy that the USPS Company will have to adopt the communicative and integrative technology available in order to compete with the private business in the industry as well as internet based business. The company will have to focus on increasing the revenue. This means that the company will have to explore the niche discounts that are available in order to continue keeping the rates below inflation while increasing the overall trade therefore increasing the revenue of the company. Aside from this the company will also have to focus on increasing the USPS jobs by getting more business. One of the important sectors is the direct mail and advertising sector which can be employed by USPS as its target market. By providing them with customized and internet savvy service the company can turn the competitive advertising dollars in to USPS revenue as well as divert the competitive dollars for the electronic competitors.
Moreover it is also possible for the company to make use of the multiplier effect of the mainstream members. By getting even a few customers, the company will be attracting up to 50 additional people who are associated with customers. This will increase the word of mouth marketing for the USPS. Right now the staff and management at USPS are worried about their jobs. However if they provide a customer friendly service which is compatible with the internet as well then they will not just be performing efficiently and raising revenues but will also be generating job satisfaction, therefore eliminating the need to protect jobs.
By 2012 internet based delivery of packages and parcels will become paramount in the market. As a result the company will have to employ internet friendly services from right now starting with delivery rates that match the internet based business propositions. The neat and clean packaging and the reliable service with enable the company to attain a large share of the package delivery and courier service in the future.
References
- “Chapter 2 – Postal operations”. Web.
- Albright, C., “Politics and Technology – U.S. Postal Service Metamorphosis”, (2001).
- Krizner, K, “Technology proves a boom, not a bust for the USPS”, Frontline Solutions, (2000), Vol. 1 Issue 5, p9, 3p, 1c.