Tuesday, October 14, 2008

Brand Update : India Post

Its more than two years since I posted the critical analysis of India Post. I had criticized about the wastage of immense potential of a service which had unmatched distribution reach across the length and breadth of India.

In 2008, Indian Government had decided to restructure the entire postal department. The restructuring exercise is called Project Arrow. The project aims to make India Post a logistics giant by leveraging the core strengths of the institution. The restructuring is being done in consultation with Mckinsey.

As a part of the restructuring exercise, the institution has redefined its business. According to Professor Theodore Levitt, Every business should ask this fundamental question : What Business are You In ? The answer to this question can throw up lot of opportunities for growth. Narrowly defining the business can create Marketing Myopia which may wipe out the business in the long run.

From just a postal institution , the department has reframed its business to be in the logistics service rather than just a postal service. The move is a significant step in broadening the scope of services that could be handled by this giant.

It is important to reinvent the business definition since the postal service is facing competition which could make its business irrelevant. The e-mail and the rise of affordable private courier services has taken away a significant chunk of profitable business of this institution. Since it is a government department, India Post could'nt change fast to accommodate the changing environment.

In line with the restructuring exercise, the department has also rebranded India Post by launching a new logo. The rebranding was done by O&M.

The new logo retains the signature red color but has made significant changes to the logo. The new logo sports a yellow color which signifies happiness , hope and joy. Red stands for passion. The wings from the old logo has been retained with some modification. The new look brand take Passion, Power and Commitment as the core brand values.

According to the press reports, 50 post offices will be refurbished to make it a new-look hi-fi post offices in the first phase of Project Arrow. The number will be scaled up to 500 post offices in the near future. The new post-offices will be technologically enabled to provide faster service to the customers. A lot of new products have also being created for meeting the new demands of the customer.

It gives me joy to see that the brand has slowly waking up to the new realities. I was surprised to find that India Post was losing almost Rs 1300 crore every year on its operations. This is despite the fact that India Post handles 10 crore Money orders and 17 crore savings accounts with deposits over Rs 5,40,000 crores. The deparment has 1,55,000 post offices out of which 89% is in the rural areas. India Post is the largest postal service in the world.

The government hopes that with this restructuring, India Post will be able to make profits rather than bleed the exchequer .

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  1. Anonymous5:43 PM

    India Post is changing and diversifying by capitalising on its rich and wide network throughout the length and breadth of the country. Like the role of Lalu Prasad Yadhav towards Indian Railways, it is good that India Post is changing for the better. Two years back the Postal Department Marketing Team visited our bank branch Office at Mumbai to canvass the free pick up of Registered Post letters at our doorstep. In Mumbai, if we had to send a Registered Post, the delivery postman who visits the branch would accept the covers, money and issue receipt rather than our going to the post office for booking Registered Post letters. The necessity to diversify and survive has percolated right down upto the delivery postmen level employee as was eveident from 2 weeks back at Chennai when the postman along with letters delivered the notice advertising the newly launched electronic instant money transfer with PIN facility and he was keen to promote the new product though it was costly when I compared it with the rates on offer in our Bank through channels like NEFT / RTGS / or DD. For a value of Rs.5000/- they charge Rs.150/- as service charge but money can be disbursed at the very next minute to the right person in another IMO centre at the other end. Post offices today are not the same as they were in my childhood days 20 30 years back. Rarely we go to post offices these days. But post offices today issue Postal Department identity cards, they sell Passport applications (i think), at their select post offices they offer packing facility for our parcels at a nominal cost, and this new Instant Money Order Service and I read that the post offices are going to sell gold coins. When banks are selling gold coins why not the post office. With competition and choice, the customer is at an advantage to choose the best one that suits him. With wafer thin margins, the competition is heating up and the one that gives more service at lesser price (value) will survive provided the cost of operations permit.
    ashok r


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