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Deutsche Post: Lower Postage Prices Will Cut Earnings

Deutsche Post AG, Europe's largest postal and transport services company, said this month that it expects earnings to decline $294 million a year from 2003 to 2007 due to the approval by Germany's postal regulator of lower stamp prices effective Jan. 1.

The price of a standard letter up to 20 grams will drop to 0.55 euro from 0.56 euro (One euro equaled 98 cents as of last week). Prices of direct mail products will change as well. The cost to mail a standard-size catalog will rise from 0.41 euro to 0.45 euro, and standard catalogs with higher thickness and weight will drop from 0.92 euro to 0.90 euro.

Deutsche Post also recently announced the results of a study it sponsored, Direktmarketing Deutschland 2002. It found that the number of companies using direct mail in Germany dropped from 554,000 in 2000 to 549,000 in 2001. The average direct marketing expenditure for a company was the same in 2001 and 2000 at $38,200. Overall DM expenditures were $20.5 billion in 2001, down 1 percent from the previous year.

E-mail was the only medium to record a clear spending increase in 2001, up 8 percent to $1.27 billion, according to the study.

The study predicted about 1 percent growth in direct marketing spending for 2002. Spending on Internet and banner advertising were predicted to rise 6 percent.

The study involved 3,500 surveys and 250 follow-up interviews.

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