Supplementary memorandum submitted by
Question 205: Break down of changes in costs between
1999-2000 and 2000-01
1999-2000 TO 2000-01
||£m||% increase on 1999-2000 costs
|1999-2000 Net Operating Costs (before Exceptional items)
|Inflation on non-staff costs1
|Costs assocaited with growth in mail volumes2
|Investment in mails staff efficiency initiatives
|Investment in technology infrastructure
|International conveyance (REIMS) increases
|2000-01 Net Operating Costs (before Exceptional items and
|New staff costs from acquisitions||
|Non staff costs of acquisitions||
1 RPI for the financial year 2000-01 was 3.0 per cent.
2 Traffic growth in inland letters was 2.7 per cent in the year.
Questions 278, 287 and 288: What is the differential unit costs
between rural and urban services?
Differential Unit Costs between Rural and Urban Mail Delivery
The average end to end (ie from initial collection to final
delivery) of an item of mail in offices with less than 20 per
cent of routes that are defined as rural is 23 pence.
The average end to end cost to deliver an item of mail in
office where 80 per cent or more of routes are defined as rural
is 48 pence.
The cost of the delivery element alone (the "final mile")
is 7 times more expensive in rural areas, at 29 pence,
than in urban areas, at 4 pence.
These figures do not incorporate any adjustment for relative
fuel consumption on urban/rural deliveries.
These figures are averages, and are derived by using a sampling
methodology. The costs of delivery of a letter will depend on
the precise posting as well as delivery location.
Questions 375 and 389: Growth in revenue and costs over the
last five years?
Growth in Consignia Revenues and Costs over Five Years
||Year on Year
|Year on Year|
|Year on Year|
Question 549: Consultation conducted prior to introduction
of the "Consignia" name
Consultation Conducted Prior to Introduction of the Consignia
Stage 1Initial Market Research
An initial research programme was conducted to understanding
attitudes our existing corporate and customer-facing brands. This
External stakeholders: business customers (all brands),
suppliers, Chief Executives of blue chip companies, MPs, union
leaders, 8 general public discussion groups (84 interviews in
Internal stakeholders reseach: employees in discussion
groups and senior management interviews (28 interviews in total)
The findings of this research were that:
there was widespread confusion between The Post
Office Group and individual business brands which was impeding
the development of the customer-facing brands;
the potential in the market was in the full scope
of distribution and associated;
there was a need for a cross business brand for
new ventures and partnerships in the future;
there was an increasing need to differentiate
clearly against global competitors; and
employee involvement was primarily with their
own brand (ie Royal Mail, Parcelforce, Post Office Counters).
In addition, there were specific detailed recommendations
on overall brand positioning and attributes that were drawn on
to develop the new name at a later stage.
Stage 2International Market Research
There was further research conducted in respect of international
markets, through 78 interviews with business customers, partners
and postal administrations. The findings of this research were
that there was a need for a brand to: suggest universal reach,
support concept of distribution, achieve clear differentiation
against other national postal administrations, be protectable
in international markets.
Stage 3Qualitative Research into Suitability of the name
The earlier stages of research provided the platform for
generating new names which echoed the themes of distribution,
universal reach, and trust. A candidate name was researched against
a description of the organisation for suitability and associations
omnibus sample of the general public in the UK,
and a boosted sub sample of directors and professionals for suitability
omnibus samples in France, Spain, Italy, Germany,
Stage 4Further Consultation
Further detailed consultation was carried out with leaders
of the main unions, as a result of which:
the strapline, "the new name for The Post
Office Group" was introduced alongside the new identity;
it was reiterated that the new name would not
replace Royal Mail, Parcelforce or post offices as the UK consumer
brands, and that the role of Consignia would be as the overall
holding company, for relations with the top 50 corporate clients
and for potential use internationally.