The U.S. Postal Service recorded $2.8 billion in revenue from international products and services in fiscal year (FY) 2015, which was 4 percent of its total revenue. Postal Service international products and services include Global Express Guaranteed, Priority Mail Express International, Priority Mail International, First-Class Mail International, and First-Class Package International Service.
To market its international offerings, the Postal Service relies on a variety of strategies and media channels such as networking, print, and digital. The Global Business, Brand Marketing, and Sales groups work together to develop the marketing strategy for international products and services.
Effectively marketing its international services is becoming increasingly important for the Postal Service. The international mailing and shipping industry continues to grow, with global eCommerce topping $1.3 trillion in 2014 and a projected growth of 20 percent in 2015.
A 2010 presidential executive order requiring the use of federal resources to support continued growth of U.S. exports furthers the opportunity for the Postal Service in this market. However, the Postal Service faces significant competition from domestic and international private delivery companies and other foreign posts. To capitalize on this opportunity and address its ongoing financial challenges, the Postal Service must adequately invest in its international products and services, including marketing productively and efficiently.
Our objective was to evaluate the Postal Service’s marketing of its international products and services.
What the OIG Found
The Postal Service’s marketing of international products and services is not providing sufficient customer awareness in a growing, competitive international marketplace. International mailers and the Postal Service have indicated that the Postal Service’s international marketing efforts are not creating enough customer awareness. Customers and businesses do not regularly associate the Postal Service with international shipping.
Instead of using a comprehensive international strategy, the Postal Service’s current marketing strategy focuses on enhancing its brand, educating the sales force about international products and services, and implementing specific international marketing initiatives with a limited reach.
The Postal Service could benefit from a comprehensive international marketing strategy to effectively promote customer awareness of its international offerings. Leading practices emphasize the importance of having a comprehensive international marketing strategy when conducting global business. Such a strategy would assess marketing efforts, identify areas for improvement, and help demonstrate the need for additional marketing funds.
We also found the Postal Service was unable to provide certain reports and data spelled out in its marketing contracts that should have key information on the global mailing and shipping market. Being able to access and use this information would help the Postal Service craft an effective international marketing strategy.
The lack of a comprehensive international marketing strategy will continue to put the Postal Service’s ability to capture revenues and grow market share in the global marketplace at risk. We estimate a comprehensive international marketing strategy could enhance the Postal Service’s global marketing efforts and help it capture an additional $20.3 million annually during FYs 2016 and 2017.
What the OIG Recommended
We recommended the Postal Service develop a comprehensive marketing strategy for its international products and services to include specific actions for promoting customer awareness.