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Pricing practice in the postal industry


As a Roland Berger Research Fellow at INSEAD, a consultant from our Budapest Office examined the pricing practices of 17 postal operators

Postal markets under 50 g letter items, which represent the majority of mailing volumes, are monopolies in most EU countries. By 2013 at the latest, however, all EU postal markets will be fully liberalized, which will pose a fundamentally new situation to the current incumbent operators. The consultant's INSEAD research paper compiles lessons learnt from 17 postal operators all over Europe on pricing practices and evaluates to what extent they are prepared for full market liberalization.

In his paper, the consultant argues that understanding customer demand and the development of customer oriented solutions will become a central issue for postal operators in an open market. Part of this customer orientation will be a shift in pricing policies. These are often considered as purely a regulatory determined component in the revenue equation today, with the primary focus of commercial activity being on volume development rather than on innovative pricing and billing practices.

Price will be an important influencing factor for customers when new entrants with similar service levels appear. The study therefore surveys major trends on the European postal market with regard to the role of pricing in a liberalized environment and describes current pricing approaches obtained from structured interviews with selected operators. By comparing the study results with other information on a Western and Eastern European regional level, the study finally arrives at several key lessons learned.

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