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Girish Agarwal |
February 18, 2005
Whenever Dainik Bhaskar, a media group, enters a new market, it uses direct marketing to establish a leadership position from day one. Here is the story on the transformation that happened inside the organisation because of this strategy.
In 1996, when we began transforming our group into a customer centric organisation it was difficult for us to accept the fact that someone called the consumer exists and that he would henceforth have a greater influence in the way we publish the newspaper.
To cite an instance, during the launch of the Chandigarh edition of the Dainik Bhaskar, the pre-launch customer preference survey showed that readers in that area preferred a newspaper in Hinglish (the spoken language, a mixture of Hindi and English) to pure Hindi.
To gain popularity we had to adapt that language in the newspaper. So in this case the customers actually decided the language the edition would carry. This was a new experience for us, especially the journalists and editors, and had a huge impact on the organisation, its processes and its structure. Certain changes have now become a norm in our organisation.
Mind the gap
Involving the customer from the word go is a radical change in strategy, but we have adopted it across the Dainik Bhaskar group for all our projects. We realised that there is a gap between the entrepreneur's perception of the market requirements and the actual market needs. This gap may actually be quite minor and inconsequential from the management's view-point but it can make a huge difference in the way customers perceive the product. Bridging this gap then becomes essential to win customer trust.
In our case, instead of designing the newspaper and then hoping to generate sales, we involve the customers, collect their requirements, their suggestions and then design the project accordingly. This strategy has made the difference between success and failure in many instances.
Let me illustrate. When we planned to start our Chandigarh edition, we looked to buy a property in a suburb called Panchkula as it was economical and also suited our needs. But during the course of a conversation with a reader from Chandigarh, I came to know that if we wanted readers to perceive our paper to be as prestigious as the Tribune, we should operate from an imposing building in the centre of the town and not the outskirts. So this set us thinking, and in the end, we invested in a Rs 3.5 crore (Rs 35 million) property in the city centre as against the Rs 50 lakh (Rs 5 million) we had actually planned. This extra investment ensured that people perceived us as a Chandigarh paper right from day one and not just as any other newspaper.
Pricing against the market
I strongly believe that the market is no one to set the prices. As entrepreneurs engaged in the day-to-day running of the organisation, only we know the pros and cons of what price the customers will accept for our product, of how much we can take and how much we cannot.
Pricing is ultimately the entrepreneur's decision based on the market affordability and the nature of his product. Take telecom rates as an example. An owner of a telecom company once told me that two and a half years ago, his company prepared a report, which said that if they priced below Rs X per minute the company will be doomed. Today even after selling at half that price the company is making three times more profit than what it was earning three years ago.
There will be times when you may want to introduce a premium product at a price point which the current market pricing will not accommodate. But if you are firm in saying that you want this price and are confident of it, you will definitely get it. In the newspaper industry, pricing plays a huge role, but we have realised that pricing is not a standalone element. Quality is as important in deter-mining success. Customers will never accept average quality; they want value addition in their product. They expect their rupee to go the extra mile and give them the best quality.
Flexibility is key
No system or plan is sacrosanct. Systems and plans are essential but they should be flexible enough to undergo a last minute change. Otherwise they become a bottleneck. This was an important lesson we learnt during the Ahmedabad launch. We had initially planned two city supplements for Ahmedabad as Ahmedabad is a city of 5mn readers. One edition would cover eastern Ahmedabad and the other the west, thereby providing more local news. So we planned our processes to accommodate two editions. But a reader survey revealed that though readers residing in the eastern suburb may not frequently travel to the west, they like to be up-to-date on happenings in the western part of the city and stay connected with their social circle residing there. Acceding to market demands we had to combine the editions and make the necessary changes in our systems.
Customer choice played a similar role in Chandigarh. Here we planned a feature based city supplement to our main paper. It was to be printed earlier than the main paper, saving costs. However, we discovered that customers preferred a news based supplement. We had to change our process and print it along with the main sheet. This called for a major process change and we had to reschedule our activities.
Nothing comes cheap
Haryana is just about six hours drive from Chandigarh. So when we conceived the Haryana project we planned to print the edition from Chandigarh. But much to our surprise, we discovered that readers in Haryana resented a paper printed from Chandigarh. There was a feeling that, "I am Haryana, I am Panipat, I am Karnal and why should Chandigarh play boss to me". So we had to change our plans: we infused fresh capital and set up two presses at Panipet and Hissar. The extra investment made in Chandigarh to feed Haryana was a setback. But we had to do it because the market demanded that. But in the end the success of the Haryana edition made it worthwhile.
Sometimes we have no option but to invest in extra infrastructure to get an edge over competition. In printing, editorial matter is laid out, color separated and printed on acetate sheets (called positives), which are then photosynthesised onto metal rollers, which are mounted on the printing presses.
We are now contemplating investing in the latest printing process where editorial material transfers straight from the computer to the plate, without going for positives. This saves about fifteen minutes time. To save those fifteen minutes for the customer we are contemplating a move, which involves changing the entire process.
But we have to do it; we just have no other choice, especially in our business where time is of the essence and we compete with a dynamic media like television. A normal household generally goes to sleep by 11 o'clock in the evening and any news between 11pm and the time we wake up will catch the customer's interest. So we have to continuously extend the time we can work, see until how late into the night we can cover events.
Ultimately it is your call
You can conduct a survey, get customer feedback, get advertisers' feedback, the works. But ultimately it is your decision. Your customer can say he wants X, Y and Z. But to what extent you want customer needs incorporated in your plan is up to you.
This is the biggest decision and it depends on the entrepreneur's or the marketer's skill. At times you may try to short change your customer based on your convenience. Sometimes you may be able to get away with it, but personally we do not think it is possible. You can put your foot down and say I will give in only this much to customer demands. Or you can take a call on your costing, growth and other needs and try and find a compromise.
And this decision differs from company to company. Some companies may say I will not let my profitability be affected. Some will take more risk and see how it works. Some will strive to achieve a balance. I will try to satisfy a part of the customer's demand. If the customer is asking 100 per cent, I shall give 50 per cent. That's a call that companies have to take.
There is no fixed formula and there cannot be also because it is so subjective, so dependent on human vagaries. In some markets a price cut works wonders and in others, it doesn't.
Recently in two of our markets the competition started a price war by slashing prices. In one market we also reduced the cover price and we doubled numbers but in the other one we grew the numbers without the price slash. It is not just luck. Broadly speaking luck is the environment around you. Earlier you may not have studied it properly. It all depends on the marketer's perception.
Girish Agarwal is director of marketing
Design: Rahil Shaikh
Published with the kind permission of The Smart Manager, India's first world class management magazine, available bi-monthly.