Is Royal Mail Justified In Offering And Promoting Its Direct Mail Services?

The UK’s largest former monopoly postal service Royal Mail has been operating in the market more than 360 years. It is a unique company by making every person living in the UK its customer. Royal Mail is influenced by a number of factors. One of which is the rise of internet users which means an increase of e-mail usage leading to the decline in personal letter sending. As well lack of motivation among the workforce, one of the reasons for that is a large pension fund deficit that has later caused workers to go on strike in the beginning of June 2007 (UK direct mail, 2007) Another reason for these short-term strikes happening at that time was вЂ?’a round of substantial job cuts.вЂ™Ð²Ð‚™ (UK direct mail, 2007) that was due to Royal Mail cutting costs because of extreme pressure, leading to closure of their Post Office branches mainly in rural areas. This in turn terminated delivery of letters and parcels allowing other existing competitors (DHL, FedEx) gain an increased advantage in overcoming the company at this time. All these factors resulted in high political pressure on Royal Mail to increase revenue. One of the results is that Royal Mail has introduced direct mail.

3.1 Direct mail-what is it?

In order to justify Royal Mail in offering and promoting direct mail on a broad scale, first we have to identify it. Direct mail is defined as вЂ™Ð²Ð‚™a marketing effort that uses a mail service to deliver a promotional printed piece to your target auditors.вЂ™Ð²Ð‚™ (Direct Mail, ). The way direct mail works according to Royal Mail: business customers it has give promotion of their goods/services in the direct mail letters and for every Ð'Ј0.31p spent, Ð'Ј14 is returned to them. However there are numerous difficulties with this service, which will be highlighted throughout the report.

3.2 The size of the increase in volume of direct mail in the near future

In the last 13 years overall volume of direct mail has increased by 139 % revealed Royal Mail. Forecasts can be made based upon direct mail figures of a continuous increase in volume; although in current day reality it is found already to be very successful. However, there are social implications associated with rise of volume that drives down the figures. вЂ?’Direct mail, in its present form, is facing an increasingly tough future with the inexorable advance of email, SMS messaging and other mobile communications.вЂ™Ð²Ð‚™(Royal Mail, 2007)

3.3The commercial and social effects on this increase

From a commercial point of view direct mail volume increase will indicate that businesses are, вЂ?’building their brand loyalty and educating their customers on their products and services as well as actually driving sales.вЂ™Ð²Ð‚™ (Royal Mail, 2006) By world leading research companies it has been proven that for businesses direct mail is one of the most successful ways of promotion. Moreover, now companies are developing new strategies and techniques to draw more interest to their products by adding samples such as shampoo’s