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| MP60032 |
| MAPS BUSINESS POSTAL SERVICES : SEPTEMBER 2002 |
| Overview |

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This report covers: business postal services, express delivery, services,
Companies covered include: Business Post Group, Consignia, Hays, Datarun, Deya, London Underground, Securicor Omega Express, Special Delivery Services, TNT UK,UK Mail, Express Ltd., Speedmail International,
| 1 | Executive Summary 1 |
| 2 | 1. Introduction 6 |
| 3 | THE FOCUS 6 |
| 4 | THE POSTAL SERVICES ACT, 2000 6 |
| 5 | COMPETITION TIMETABLE 7 |
| 6 | THE UNIVERSAL POSTAL SERVICE 8 |
| 7 | Definition 8 |
| 8 | 2. Strategic Overview 9 |
| 9 | MARKET DYNAMICS AND SEGMENTATION 9 |
| 10 | DISTRIBUTION 9 |
| 11 | COMPETITIVE STRUCTURE 10 |
| 12 | MARKETING AND ADVERTISING 11 |
| 13 | THE CONSUMER 11 |
| 14 | Table 1: Comparison of Delivery Performance Between UK and European Liberalised Universal Service Providers ( percent), 2000/2001 12 |
| 15 | Table 2: Target Mail Delivery Times in the UK and Selected Other European Countries, 2001 12 |
| 16 | MARKET FORECASTS 13 |
| 17 | 3. Sector Analysis: Business-to-Business 14 |
| 18 | BACKGROUND 14 |
| 19 | MARKET SIZE 15 |
| 20 | Table 3: Volume of Inland Mail Handled by The Royal Mail (million), Years Ending March 1997-2001 15 |
| 21 | Figure 1: Volume of Inland Mail Handled by The Royal Mail (million), Years Ending March 1997-2001 16 |
| 22 | Table 4: Consignia Revenues from Postal Packets by Weight (£m), Financial Year 2000-2001 16 |
| 23 | CONSUMER TRENDS 17 |
| 24 | MARKETING and ADVERTISING 17 |
| 25 | DISTRIBUTION 17 |
| 26 | 4. Sector Analysis: Periodicals 19 |
| 27 | BACKGROUND 19 |
| 28 | MARKET SIZE 20 |
| 29 | Table 5: The Top 20 Customer Magazines in the UK Ranked by Circulation, July-December 2001 20 |
| 30 | CONSUMER TRENDS 21 |
| 31 | MARKETING and ADVERTISING 22 |
| 32 | DISTRIBUTION 22 |
| 33 | 5. Sector Analysis: Bulk Mail 23 |
| 34 | BACKGROUND 23 |
| 35 | MARKET SIZE 23 |
| 36 | Table 6: UK Direct Mail by Volume (million items), 1997-2001 23 |
| 37 | Figure 2: UK Direct Mail by Volume (million items), 1997-2001 24 |
| 38 | Table 7: Advertising Expenditure by Media Sector at Current Prices (£m), 1997-2001 24 |
| 39 | Table 8: Advertising Expenditure by Medium (£m), First Quarter 2002 25 |
| 40 | Figure 3: Advertising Expenditure by Medium (£m), First Quarter 2002 26 |
| 41 | CONSUMER TRENDS 26 |
| 42 | Table 9: Top Ten Companies by Expenditure on Direct Mail (£m), March 2002 27 |
| 43 | Figure 4: Top Ten Companies by Expenditure on Direct Mail (£m), March 2002 27 |
| 44 | Table 10: Top Ten Companies by Volume of Direct Mail Sent (number of items), March 2002 28 |
| 45 | DISTRIBUTION 28 |
| 46 | 6. An International Perspective 29 |
| 47 | MARKET DEVELOPMENTS 29 |
| 48 | Table 11: Share of Selected Postal Markets Held by Incumbent Post Offices After Liberalisation by Country, 1993-2000 29 |
| 49 | Table 12: State of Liberalisation of the European Postal Markets by Country by Weight (grams), June 2001 30 |
| 50 | COMPETITOR ENVIRONMENT 31 |
| 51 | CONSUMER BEHAVIOUR 32 |
| 52 | 7. PEST Analysis 33 |
| 53 | POLITICAL FACTORS 33 |
| 54 | ECONOMIC FACTORS 33 |
| 55 | SOCIAL FACTORS 34 |
| 56 | Risks to the Introduction of Effective Competition 34 |
| 57 | Risks to the Regulation of Consignia Pending Effective Competition 34 |
| 58 | TECHNOLOGICAL FACTORS 35 |
| 59 | 8. Consumer Dynamics 36 |
| 60 | BACKGROUND 36 |
| 61 | WOULD YOU PAY MORE? 36 |
| 62 | Table 13: Attitudes Towards Value for Money from The Royal Mail ( percent of respondents), 2002 37 |
| 63 | ROYAL MAIL FOR SALE? 39 |
| 64 | PLEASE, MR POSTMAN, WHO ARE YOU? 39 |
| 65 | Table 14: Attitudes Towards Privatisation of The Royal Mail ( percent of respondents), 2002 40 |
| 66 | Table 15: Understanding of The Royal Mail and Attitudes to Competition ( percent of respondents), 2002 42 |
| 67 | WHO'S THAT KNOCKING ON MY DOOR? 44 |
| 68 | OFFERS YOU CAN'T REFUSE 44 |
| 69 | Table 16: Attitudes Towards Delivery Times ( percent of respondents), 2002 45 |
| 70 | Table 17: Attitudes Towards Direct Mail ( percent of respondents), 2002 47 |
| 71 | LAST POST 49 |
| 72 | WINNING POST 49 |
| 73 | Table 18: Attitudes Towards Reduction in The Royal Mail's Services ( percent of respondents), 2002 50 |
| 74 | Table 19: Attitudes to Alternative Suppliers to The Royal Mail ( percent of respondents), 2002 52 |
| 75 | NEITHER A SENDER NOR A RECEIVER BE 54 |
| 76 | Table 21: Frequency of Mail Usage ( percent of respondents), 2002 55 |
| 77 | POST MORTEM 57 |
| 78 | 9. Company Profiles 58 |
| 79 | BUSINESS POST GROUP PLC 58 |
| 80 | Corporate Strategy 58 |
| 81 | Products 58 |
| 82 | New Product Development 58 |
| 83 | Distribution 58 |
| 84 | Profitability 59 |
| 85 | CONSIGNIA holdings plc 59 |
| 86 | Corporate Strategy 59 |
| 87 | Products 59 |
| 88 | New Product Development 60 |
| 89 | Advertising 61 |
| 90 | Distribution 61 |
| 91 | Profitability 61 |
| 92 | Table 21: The Royal Mail's Profitability (£m), 2001/2002 61 |
| 93 | HAYS plc 62 |
| 94 | Corporate Strategy 62 |
| 95 | Products 62 |
| 96 | New Product Development 62 |
| 97 | Distribution 62 |
| 98 | Profitability 63 |
| 99 | Table 22: Financial Results for Hays PLC (£m), 2000 and 2001 63 |
| 100 | SECURICOR OMEGA EXPRESS 63 |
| 101 | Corporate Strategy 63 |
| 102 | Products 63 |
| 103 | New Product Development 64 |
| 104 | Distribution 64 |
| 105 | Profitability 64 |
| 106 | Table 23: Financial Results for Securicor PLC (£m), 2000 and 2001 64 |
| 107 | TNT UK Ltd 64 |
| 108 | Corporate Strategy 64 |
| 109 | Products 64 |
| 110 | New Product Development 65 |
| 111 | Distribution 65 |
| 112 | Profitability 65 |
| 113 | Table 24: Financial Results for TPG (Em), 2000 and 2001 65 |
| 114 | 10. The Future 66 |
| 115 | THE ROYAL MAIL 66 |
| 116 | COMPANIES LICENCED BY POSTCOMM 67 |
| 117 | Consignia PLC 67 |
| 118 | Datarun 67 |
| 119 | Deya Ltd 67 |
| 120 | Hays PLC 67 |
| 121 | London Underground Ltd 68 |
| 122 | Securicor Omega Express Ltd 68 |
| 123 | Special Delivery Services Ltd 68 |
| 124 | TNT UK Ltd 68 |
| 125 | UK Mail Ltd 68 |
| 126 | Express Ltd 68 |
| 127 | Speedmail International Ltd 68 |
| 128 | 11. Glossary 70 |
| 129 | 12. Further Sources 71 |
| 130 | Associations 71 |
| 131 | Publications 71 |
| 132 | General Sources 72 |
| 133 | Bonnier Information Sources 72 |
| 134 | Government Publications 73 |
| 135 | Other Sources 74 |
There is an increasing demand for postal reform across all nations. In many countries, including the UK, national telecommunications and postal services have already been split, with telecommunications provision being completely privatised.
Initial reforms in the UK do not make provision for privatisation of postal services, i.e. the introduction of competition to the provision of services notably, the collection and delivery of letters weighing under 350 grams and costing under £1, hitherto reserved for the national carrier. In the UK, The Royal Mail has been responsible for all letter collection and delivery under its Universal Service Provision obligation.
The Postal Services Act 2000 decreed that The Royal Mail would be permitted to act as if it were a private company - although all its shares would be retained by the Government - but that competition should be introduced in such a way that the universal service would not be compromised. At the same time, a new body - known as The Postal Services Commission (Postcomm) - was appointed to implement these changes.
Many companies operating within the mail services arena - those outside of that reserved for the national carrier - welcome this initiative and, through the granting of licenses by Postcomm to provide specific, but limited, services within the reserved area are able to test their services prior to full market liberalisation.
Postcomm has a difficult path to tread. If private operators are allowed to `cherry-pick' the more lucrative services, and these lie mainly in high-volume business mailings, The Royal Mail, having a legal obligation to provide a universal service, might not be able to offset costs from its less profitable areas against those that are more profitable.
As Consignia plans to rename itself Royal Mail Group in late 2002, and as the Post Office network does not come under the jurisdiction of Postcomm, this report will refer to all of Consignia's mail activities as The Royal Mail.
Text © 2002 MAPS
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© 2002 www.the-list.co.uk Ariadne
Last updated by Amanda Porteous 2002