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Imagine you're with the U.S. Postal Service. On one hand, you have Federal Express trying to take away your package business and, on the other e-mail, starting to sap your normal postal business.

That's the worry of Lauren E. Smith, USPS senior VP-chief marketing officer.

That difficult marketing dilemma has brought forth a seemingly unprecedented strategy for a governmental agency.

"We are trying to raise revenues, not rates," says Mr. Smith, 58, who's also spent time in brand management posts at General Foods Corp. and Colgate-Palmolive.

To generate more revenues, Mr. Smith has concocted various products and services, and developed their marketing. That's led to comparison ads against FedEx and efforts including selling T-shirts and key chains.

Sometimes the programs tend to get some private competitors a bit angry. To Mr. Smith, however, building those other revenues is the key to keeping the Postal Service healthy.

"We are not growing at the rate the market is with Priority Mail," he admits. Another program the Postal Service is trying in several cities, FastNet, offers local businesses next-day delivery at rates below courier services.

"We are leveraging an asset in our delivery system," he says.

Mr. Smith says such competitive thinking has to be encouraged. USPS now has several products that compete against each other as well as private industry.

Mr. Smith has dealt with that-by adding agencies and increasing advertising.

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