Pricing Innovation for a Transitioning Postal Administration
01 Jan 2003-pp 373-390
TL;DR: In this paper, the authors argue that the incumbent operator should seek pricing innovation and flexibility under current regulatory constraints, with the anticipation that these strategies will better position the entity for competition in the future, if and when constraints are lifted.
Abstract: This paper argues for the importance of pricing innovation in postal administrations that are transitioning gradually from highly regulated monopolies to less regulated, competitive entities. We argue that the incumbent operator ought to seek pricing innovation and flexibility under current regulatory constraints, with the anticipation that these strategies will better position the entity for competition in the future, if and when constraints are lifted. This paper offers a conceptual framework for pricing innovation based on established principles of market segmentation and value-based pricing. We illustrate the framework in the context of a Negotiated Service Agreement (NSA) that United States Postal Service (USPS) recently concluded with Capital One. The case study offers an opportunity to highlight the strategies, organizational changes, and resources needed for successful implementation of value-based pricing.
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TL;DR: In this article, the authors identify a link between demand based pricing and legislations which set up liberalization and a more flexible approach of cost orientation principles, and provide insights from postal operators' strategies and interactions with regulatory authorities concerning price, in a context of growing pressure from various stakeholders on postal operators marketing strategies.
Abstract: In a context of downward trends in mail volumes, recent postal reforms have allowed postal operators to build tariffs with a more balanced approach between cost based and demand based pricing. In the United States, some increased pricing flexibility was granted to the USPS in 2006 with the adoption of the Postal Accountability and Enhancement Act. In Europe, the adoption of the 2008 postal directive which liberalizes the postal sector confirmed the application of the subsidiarity principle, according to which European Union member states are free to determine the scope of regulated services, and consequently the degree of pricing flexibility for postal operators. In line with these regulatory changes, postal operators practice has been characterized by more innovations, both in the United States and in Europe. Analyzing recent product launch and commercial policies, we identify a link between demand based pricing and legislations which set up liberalization and a more flexible approach of cost orientation principles. Through increased market segmentation, postal operators have developed differentiated pricing in relation to specific products and specific customers. The paper provides insights from postal operators’ strategies and interactions with regulatory authorities concerning price, in a context of growing pressure from various stakeholders on postal operators’ marketing strategies.
3 citations
Cites background from "Pricing Innovation for a Transition..."
...Only at this stage does marketing enter the process with the task of demonstrating enough value in the product to justify the price to customers” (adra et al., 2004)....
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01 Jan 2005
TL;DR: In this article, the authors argue that volume-retention discounts of this kind, if reasonably calibrated to the competitive threat from the Internet, would be consistent with established legal standards for price discrimination.
Abstract: The growing competitive threat to the Postal Service’s role as a medium for electronic bill presentment and payment (“EBPP”) is similar to the competitive challenges that other regulated network industries—including the transportation, energy, and telecommunications industries—have faced from intermodal competition. Unlike other regulated industries, however, the Postal Service has not tried to meet this threat by offering targeted rate reductions aimed at stemming the loss of this high-margin business. The inaction appears to stem from the belief, widely shared in the postal community, that volume-retention discounts constitute undue discrimination, or are otherwise inconsistent with the Postal Service’s common carrier status. This paper has argued that volume-retention discounts of this kind, if reasonably calibrated to the competitive threat from the Internet, would be consistent with established legal standards for price discrimination.
1 citations
Cites background from "Pricing Innovation for a Transition..."
...lo For an explanation of how the Postal Service analyzes and negotiates proposed contract rates, see Adra, Ayub, Crum and Plunkett (2004) ....
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...For these reasons, the cost advantages of EBPP may be of greater importance to a utility such that marginal discounts may have no effect on the pace of electronic diversion." ( Adra, Ayub, Crum and Plunkett (2004) )....
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Book•
01 Jan 1987
TL;DR: In this paper, a comprehensive, managerially-focused, integrated, step-by-step guide to pricing analysis and strategy development is provided for MBA or advanced undergraduate courses in pricing or pricing and product policy.
Abstract: This volume is designed for MBA or advanced undergraduate courses in pricing strategy or pricing and product policy. Practical in focus and lively in style, the book provides a comprehensive, managerially-focused, integrated, step-by-step guide to pricing analysis and strategy development. New to this third edition are: an updated, practical guide to legal limitations on pricing; a chapter on pricing in and through channels of distribution; an expanded and revised chapter on managing value perceptions and price expectations; and more examples particularly relating to e-commerce.
A comprehensive, managerially-focused guide to formulating pricing strategy. Practical in focus and lively in style, this volume explains ideas and concepts that are essential to integrate pricing successfully into marketing strategy and that should be a part of every marketer's repertoire. Features numerous walk-through examples, illustrating how companies successfully implement pricing strategies.
Contents:
Ch. 1. Strategic planning : the Harvest of your potential
Ch. 2. Costs : how should they affect pricing decisions?
Ch. 3. Financial analysis : pricing for profit
Ch. 4. Customers : understanding and influencing the purchase decision
Ch. 5. Competition : managing conflict thoughtfully
Ch. 6. Pricing strategy : managing your market proactively
Ch. 7. Life cycle pricing : adapting strategy in a changing environment
Ch. 8. Value-based sales and negotiation : influencing customer behavior
Ch. 9. Segment pricing ; tactics for separating markets
Ch. 10. Pricing in the marketing mix : developing an integrated strategy
Ch. 11. Channel strategy : price management
Ch. 12. Competitive advantages : establishing foundations for more profitable pricing
Ch. 13. Measuring perceived value and prices sensitivity : research techniques to supplement judgement
Ch. 14. Ethics and the law : understanding the constraints on pricing.
402 citations
01 Jan 2000
TL;DR: In this paper, the authors present a cost analysis of the Universal Service Obligation in the United States Postal System and present a simulation model to estimate the cost of Universal Service for posts.
Abstract: Preface and Acknowledgements. Universal Service Obligation. 1. Liberalization and the Universal Service Obligation in Postal Service M.A. Crew, P.R. Kleindorfer. 2. Measuring the Cost of Universal Service for Posts M.D. Bradley, J. Colvin. 3. The Cost of Universal Service in the Postal Sector H. Cremer, et al. 4. Universal Service without a Monopoly R.H. Cohen, et al. 5. Worksharing, Residential Delivery, and the Future of the USO M. Kolin. 6. Liberalization of the Postal Market and the Cost of the Universal Service Obligation: Some Estimates for the UK R. Robinson, F. Rodriguez. 7. In France, Mail Goes Where the Money and Businesses Are F.L. Berthelemy and Joelle Toledano. Cost Analysis. 8. Cost Estimation and Economically Efficient Prices M.A. Crew, P.R. Kleindorfer. 9. Simulation Modeling for Cost Estimation R. Waterman, et al. 10. Postal ABC: What are the Reasonable Expectations? S. Awerbuch, A. Preston. Empirical Studies. 11. The Demand for Targeted Communication in Different Customer Groups H. Nikali. 12. Technical Efficiency in CTT-Correios de Portugal A.A. Pimenta, et al. Market Power Issues. 13. Antitrust versus Regulation Issues in the Postal Sector: Lessons from the Italian Hybrid Mail Case V.V. Comandini. 14. Defining Postal Markets: an Antitrust Perspective M. Plum, C. Schwarz-Schilling. 15. An Introduction to EC Competition Rules in the Postal Sector T. Reeves. 16. LiberalizingEuropean Postal Markets: The Advantages Of Reducing The Weight/Price Threshold I. Reay. 17. Hiding in Plaint Sight: The Quiet Liberalization of the United States Postal System M.S. Elcano, et al. 18. Access Pricing in the Postal Sector: Complexities and Practicalities of the United States Experience J.T. Pickett, et al. Transactions Costs and Contracting. 19. Economic Effects of an Information-Rich Mailing System Including Work Sharing T. Biasi, et al. 20. Controlling Postal Retail Transaction Costs and Improving Customer Access to Postal Products J. Haldi, J.T. Schmidt. 21. Long-term Business Relationships between Consignor and Trucking Carrier in Japan N. Kasuga, A. Torii. Strategic Issues. 22. Strategy And The Posts: the Case of the USPS R.A.F. Reisner. 23. The Current and Fugure Use of Mergers, Acquisitions, Joint Ventures, and Strategic Alliances in the European Postal Industry P.A. Halberg, K.M. Hansen. 24. Globalization, Posts, and the Universal Postal Union: a Functional Critique T. Walsh.
74 citations
01 Jan 2001
TL;DR: In this paper, the authors present a critique of the Theory of Incentive Regulation (TIR) and present a framework for regulating and liberalizing the post service in the European Union.
Abstract: Authors. Sponsors. Preface and Acknowledgements. Regulation and Liberalization. 1. Difficulties of Deregulation When Wage Costs are the Major Cost M.L. Wachter, et al. 2. Estimation of the Potential Impact of Cross-Border Liberalization I. Reay, et al. 3. A Critique of the Theory of Incentive Regulation M.A. Crew, P.R. Kleindorfer. (*) 4. Preparing the Postal Service's Rate Structures for Competition R.W. Mitchell. 5. Regulatory and Governance Changes in Liberalized, Commercialized Postal Environments R.M. Campbell. Universal Service Obligation. 6. Funding Universal Service Obligations: The Costs of Liberalization J.C. Panzar. 7. Whither the USO under Competitive Entry: A Microstructure Approach M.A. Crew, P.R. Kleindorfer. 8. Uniform Pricing and Postal Market Liberalization P. De Donder, et al. 9. The Role of the Monopoly Product in the Cost of Universal Service M.D. Bradley, J. Colvin. 10. The Regulatory Framework for Postal Markets in Germany C. Schwarz-Schilling. Analysis of Demand and Cost. 11. An Analysis of Some Specific Cost Drivers in the Delivery Activity C. Cazals, et al. 12. Mail Use by Firms M. DeRycke, et al. 13. The Demand for Direct Mail in Portugal R. Goulao Santos, S. Chilra Lagoa. 14. Postal Profits Arise where People Are G. Scarfiglieri, V.V. Comandini. International. 15. Reforming the Universal Postal Union J.I. Campbell Jr. 16. Reform in the Universal Postal Union and the World TradeOrganization M.S. Elcano, A. Alverno. 17. GATS and the Postal Sector: The Next Round of Negotiations H. Smit. Competition Law. 18. The Significance of the Microsoft Antitrust Litigation for Postal Services Operators W.E. Kovacic. 19. Market Definition in EC Competition Law concerning Postal Services R. Eccles. Future Technologies. 20. Lifetime Addresses: A New Postal Paradigm for the 21st Century C. Bradford, J. Mayer. 21. Legislation Relating to Electronic Web Commerce Created at the European Union Level P. Leskinen. (*)ERRATUM: The equations in Chapter 3, 'A Critique of the Theory of Incentive Regulation', are printed out incorrectly. The corrected version can be downloaded free of charge from either the website of Kluwer Academic Publishers or the Center for Research in Regulated Industries whose URL's follow below. Kluwer's website: www.wkap.nl/kaphtml.htm/ELECPROD CRRI's website: www.rci.rutgers.edu/~crri/Post.htm The Editors and the Publisher apologize for any inconvenience caused.
49 citations