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United States Postal Service - Essay Example
One of the major areas in which the US Postal services has gone wrong is in its initial pricing policy that charges uniform rates for inland services regardless of recipient’s location. This has adverse economic effects owing to the ownership and operation of the agency…
The pricing approach therefore restricts revenues as uniform rates increment will be uneconomical to users, especially in short distance remittance, and have consequences such as further loss of market control. Retaining the pricing strategy over a long period is another weakness that the agency has communicated and beginning to change it after the long period will elicit a hostile response from the public (Carbaugh and Tenerelli 129). The Postal Service has also gone wrong in its response to counteract its declining revenues. Its approach to use price-oriented strategy as opposed to customer target strategies was a weakness and led to further decline in revenues. In response to its deteriorating income, The Postal service increased rates chargeable to its consumers but this exerted more pressure on the already low revenues.
The strategy seems to have scared more customers to alternative communication channels and competing firms because the magnitude of the organization’s handled mails declined. The organization’s move to reduce quality of its services by withdrawing first class services in order to reduce its cost was another mistakes that could send off clients who had been attracted by the involved quality services of the first class package (Carbaugh and Tenerelli 131- 134). ...