distribution channel of the times of india
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Distribution Channel of
The Times of India
Ishpreet Singh – 12P139 J Abhinav– 12P140
Karan Jaidka – 12P141 Kshitij Agrawal – 12P142
Ladlee Rathore – 12P144
Group 10 – Sales and Distribution Management – Section B
PGPM 2012-14
Ishpreet Singh – 12P139 J Abhinav– 12P140
Karan Jaidka – 12P141 Kshitij Agrawal – 12P142
Ladlee Rathore – 12P144
Group 10 – Sales and Distribution Management – Section B
PGPM 2012-14
Methodology Analyzing the distribution structure of Times of India Identifying the roles (Primary and secondary) of all the
intermediaries Analyzing the promotion schemes followed by TOI Conducting a detailed study of the flow of the product
and relationship between these existing intermediaries Interviewing intermediaries to get insights about
problems in the existing system After identifying the inefficiencies in the channel,
conducting research for probable solutions Making recommendations
Company BackgroundOwned and managed by Bennett, Coleman & Co. Ltd.45 dailies and periodicals108 editions from 9 centres 16 Special Interest offerings targeted at groups of
consumers ranging from photography to education to annuals on beauty, fashion etc.
Readership of 76.43 lakhs Times of India is ranked as the top English daily in
India by readership
Industry OverviewMore than 1,30,000 printing presses in IndiaMore than 10m families involved in the industry INR 20 bn+ turnoverPer capita consumption of paper & boards - 4.5
kgsMachinery - new & second-hand -
predominately from China, France, England, Germany
Industry OverviewCirculation and Readership
Circulation [number of copies distributed (not same as sold)] one of the principal factors used to set advertising rates
Readership: number of people reading the publication
Advertising80% of the revenue comes from advertising & 20%
from sales
Distribution - StructureThe Times of India
Printing Press
Depots Agents
Vendors Vendors
Beat Boys Newspaper Stands
Beat Boys (3-4)
Newspaper Stands
Readers
Channel MembersPrinting Press
It takes the content from the editorial team and prints using high capacity advanced press machines that deliver the product in packaged condition
Situated in Ghaziabad for Delhi NCR region Capacity to print over 10 lac copies Printing starts around 1-1:30 am usually After Printing, stacking is done before dispatching newspapers to
depots Labeling done to match stacks with destination Usually stocks for depots situated the farthest are dispatched earliest
Channel MembersDepots
The distribution centre receives the copies from the transporter and stocks it for a short duration Close to 100 depots in Delhi Keep publications (newspaper + magazines) for various companies Serviced by salespersons who are company employees Unorganized – keep newspapers / magazines scattered on pavements or
on steps of some malls etc Records are kept at depots in the following format:-
Newspaper 1 Newspaper 2Vendor code Qty to be Delivered Qty Actually Delivered Qty to be Delivered Qty Actually Delivered
XY
Channel MembersAgents
Employed where distribution is not organizedExclusive agents of TOIWork on commission, themselves act as salesmenDelhi market- Working with depotGurgaon- Working with agency system
Channel MembersVendors
Like retailers. Link between depot and end consumerGo to nearest depot everyday. Pick out publications they
want They sell via : door-to-door beat boys/single point
newspaper standsMDI vendor serve in areas – Sector 14 and MDI. He collects
newspapers from Old Bus Stand Agent
Channel MembersBeat Boys
The delivery boys have demarcated regions/housing societies, which they serveHawkers are individuals who do not have established customers and sell at road sides, bus stands etc. They make small quantity purchases
Deliver required publications to proper destinationsHave route-wise list of addresses and their required
newspaper/publications 3-4 beat boys cover an area via their routes
Information FlowNew consumer/Existing consumer taking or terminating subscription
Inform their Vendor( increase/decrease his order by one )
Vendor Informs the distributor
Distributor informs the company.
Channel MarginsMargin given by TOI to channel members is around
30%More or less uniform rate across the industryAgents get 5-10%, salesmen on payroll get fixed salaryVendor receives 20-25%, to cover the costs incurred
due to travel, beat boys etc. It depends on the type and language of newspaper. (Hindi – 25%; English – 20%)
Credit Periods30 day credit period to distributor is offered,
subject to 3 month security depositFor Vendors, on an informal basis, 1-2 days is
offered. Vendors buy a fixed, large amount of newspapers daily and pay in cash on a day-to-day basis
2% of the papers which remain unsold at the end of the day can be returned back
Promotion SchemesTrade Schemes
Offered to channel members Incentive to increase sales Challenge for channel member: Balance reader interest while
trying to increase sales to avail benefits of the scheme Discounts for purchase of larger volumes by vendor Bonus of 50 paise for each new account generation by vendor
Discounts Mainly for institutional sales Eg. Bulk sale at schools at discount rates
Promotion SchemesReader Schemes
Directed at final consumer/reader. Mainly to draw in new customers
Varies depending on location & demographyCould include trials, discounts, freebies, combo offers etc
Subscription SalesOffer choice of publication for a certain amount of time at
a lump sum discount pricePurpose- gaining new customers and making customer
switch
Issues Identified
Timely DeliveryPayment & Claim DelaysReturn PolicyManual Packaging system
Timely Delivery Important to deliver on time at each level Dispatch first to depots that are farthest Company might go against norms- For eg. deliver first in
areas of early risers Unnatural events could affect on-time delivery Most common reasons are traffic jams, monsoons, break-
downs etc Ownership is transferred once paper leaves press In case of delay, agitated vendors and stall owners might
switch to substitutes to satisfy their customers
Recommendation Local Knowledge about routes etc. can be
helpful Timely delivery at important locations Benchmarking competition, especially
managing routing properly. Distributors should take care of critical vendor locations
Possible Roadblocks Additional costs due to operational inefficiency
to be borne by TOI Routing is not under control of TOI Could lead to complete system failure Distributor must be capable of handling this
task
Timely Delivery
Payment & Claim Delays
Informal Credit terms between distributor & vendor
Chances of default are higherProbability is higher towards month end when
vendors are cash-strappedCould translate into distributor defaulting on
payment to TOIChallenge for distributor to balance sales &
credit based promotion
Recommendations Formal credit system can be introduced Higher incentives for timely payment Credit period could be extended to Distributor
when possible which can be passed on to Vendor
Possible Roadblocks It can happen that distributor is bearing costs
which may not work Vendors may not be comfortable with formal
credit system
Payment & Claim Delays
Return PolicyTOI allows up to 2% returns with full refund of
costsIn case it exceeds the limit, channel members
bear the lossDistributor also allows the same 2% returns for
vendorsIssues arise when inventory increases above a
certain level due to poor forecasting or unforeseen reasons
Recommendations Benchmarking competition, like HT, the market
leader (Gurgaon region) allows 10% returns with full refund
TOI too should offer comparable return rates Increase flexibility for channel members, which
could lead to boost of sales
Possible roadblocks Higher costs to TOI Would need tighter monitoring by TOI to
prevent misuse
Return Policy
Manual Packaging Automatic & manual packaging, both are used in industry Manual Packaging has lot of inefficiencies associated
Delays – could cascade on to delays in loading, delivery Human Errors – could lead to incorrect quantities or editions being
packed
Onus to make up is on distributor, as error is detected usually after leaving printing premises
Distributor has to bear costs of transporting replenishments to aggrieved vendors
Recommendations Try the use of automatic system Eventually phase out use of manual packaging
systems TOI should adopt tight monitoring mechanisms Maintain beat boys at distributor to handle any
errors
Possible roadblocks Costs in setting up automated systems might
be prohibitive Distributor may not be willing to maintain beat
boys
Manual Packaging
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