Sales and Distribution (MBA)

1. Subject:
Sales & Distribution Channel
Project on:
Distribution Channel of a Newspapers
Archana Parthasarathy, Sanjay Gupta, Hardik Sheth
(SIESCOMS : EMBA-Marketing Sem-3)

2. Channel Distribution - Introduction
The chain of businesses or intermediaries through which goods or service pass until they reach the end consumer.
Includes wholesalers, retailers, distributors and even the internet.
It is divided into direct and indirect forms
– “direct" channel allowing the consumer to buy the good from the manufacturer
– "indirect" channel allowing the consumer to buy the good from a wholesaler.
Direct channels are considered "shorter“ than "indirect" ones.
Why use Channel Members
The use of intermediaries results from their greater efficiency

3. Channel Distribution – Types, Flow & Functions
Types
1. Conventional channel - Channel members independently owned.
2. Vertical channel (VMS- Vertical Marketing System) - Channel members act as a unified system.
3. Horizontal channel - Two or more companies on the same level join together for mutual gain.
4. Hybrid channel - Combination to serve different segments.
Flow
Forward –
Physical
transfer,
title,
promotion
Backward –
Order,
payment
Both
directions –
Information,
risk, finance
Use of scarce resources,
Performed better through
specialization.
Efficiency and
Effectiveness decides
who does which function
between company
and channel
Functions
Shift-able among channel
members
Information &Promotion,
Contact, Matching &
Negotiation, Physical
distribution, Financing,
Risk taking.

4. Channel Strategy
CHANNEL
STRATEGY
Channel
Selection
Market Factors
Producer Factors
Product Factors
Competitive Factors
Distribution
Intensity
Intensive
Selective
Exclusive
Channel
Integration
Conventional
Marketing Channels
Franchising Channel
Ownership

5. We are covering: Newspaper – Printing and Distribution
1. Newspaper Industry – brief overview
2. Analysing the distribution structure of Newspaper
3. Role of each member in Chanel distribution
4. Margins / Compensation
5. Revenue
6. Challenges
7. Conclusion
8. Q&A

6. Project Objective
Industry – Newspaper
To Study the distribution Channel of a Newspaper
The distribution division of a newspaper is charged with the responsibility of moving the finished
product to the consumer every day, usually before the reader wakes up in the morning.
We are briefly explaining the process of Circulation of Newspaper from Publication house Printing Press
to end consumer.

7. Facts on Newspaper Industry
• The second largest circulated daily : Ananda Bazar Patrika – Bengali – Kolkata – 12,63,259
• India is the second largest publisher of newspapers in the world and has a readership base of 350
million
• Total number of registered newspapers : 73,146 – according to the report of Registrar of Newspapers
for India (as on 31st March, 2013)
• Hindi - the largest number of newspapers and periodical registered in any Indian language and
statewise Uttar Pradesh - the largest number of registered newspapers and Delhi -the second largest
number of registered newspapers
• The total circulation of newspapers : 5,79,53,373
• The largest circulated daily : The Hindu – English – Chennai – 14,20,368

8. Facts on Newspaper Industry
• Apart from English and 22 languages listed in the constitution the newspapers are registered in 100
other languages and dialects
• Orissa has the distinction of publishing newspapers in 18 out of 22 principal languages
• As many as 20 highest-selling newspapers the world over are from India
• English newspapers readership are not growing as expected however, Indian language newspapers,
especially Hindi, Malayalam, Marathi and Telugu are seeing some phenomenal growth
• Indian newspaper industry is slated to grow manifold, with growth rate circling around 6%. Market
share is projected to grow from Rs. 56,300/- cr. to Rs. 92,900/- cr. by the end of 2013, as per the
research done by the Pricewaterhouse Coopers

9. Our Understanding about the Newspapers
• A periodical publication that contain news like local and national news on crime, business,
entertainment, society and sports, feature articles, editorials, and advertising
• Most papers also features an editors page which is written by an editor and columns that
express the personal opinions of writers, other than this a wide variety of material is published
such as editorial opinions/criticism, persuasion, obituaries, entertainment etc
• It’s funded by paid subscriptions and advertising

10. Key Players – Market Shares
Audit Bureau of Circulation
(http://www.auditbureau.org/)
Indian Readership Survey 2013

11. Key Players – Market Shares

12. Why Newspaper Circulation Is Our Project?
Delivery boys always dutifully patrol various societies each morning at the exact hour. During our lecture
in our class when our professor asked us “Do you know how a Newspaper reaches you?”
One would often think of this query as trivial. After all it is the news that matters; why worry how it
reaches us? But it is important to realise that news is of no use if it is not told, and if not said in a timely
manner.

13. Distribution Process of Newspaper Industry
1. The newspaper sales involve distributing highly perishable products under severe time constraints.
2. The printed newspapers have to be dispatched to various distributors across the region.
3. The revenue of the newspaper distributor is based on a commission on the sale of every newspaper.
4. The circulation is normally through salesmen appointed and are paid by the distributors, who in
turn pass it on to the hawkers.
5. Hawkers, vendors and book stall owners are the last link of the supply chain before newspaper
reaches its readers.
6. Responsiveness and efficiency play an important role in newspaper distribution channel

14. Newspaper – Various Stages
The entire process works in three main stages
1. Content Gathering and Layout
2. Printing
3. Distribution

15. FORMAT OF THE
NEWSPAPER DISTRIBUTION CHANNEL
The process of this is very tricky.
Even if they get delayed in any one of the process then it affects the
whole system.
We will explain you in detail of how the process of bundling and
delivery happens and importance of each member in this cycle in the
coming slides

16. Distribution - Structure
Newspaper i.e. TOI
Printing Press
Depots Agents
Vendors Vendors
Beat Boys Newspaper
Stands
Beat Boys (3-4) Newspaper
Stands
Readers

17. Distribution - Structure
Printing Press
1. It takes the content from the editorial team and prints using high capacity advanced press machines that deliver
the product in packaged condition.
2. Printing starts around 1-1:30 am usually.
3. After Printing, stacking is done before dispatching newspapers to depots
4. Labelling done to match stacks with destination. Usually, stocks for depots situated the farthest are dispatched
earliest
Depots / Distribution Points (4 am to 5am)
1. The distribution centre receives the copies from the transporter and stocks it for a short duration
2. Keep publications (newspaper + magazines) for various companies
3. Serviced by salespersons who are company employees
4. Unorganized – keep newspapers / magazines scattered on pavements or on steps of some malls etc
5. Records are kept at depots.

18. Distribution - Structure
Agents (5am-6am)
1. Employed where distribution is not organized
2. Exclusive agents of Organisation such TOI
3. Work on commission, themselves act as salesmen
4. Working with depot
Vendors (5am to 6am)
1. Like retailers. Link between depot and end consumer
2. Go to nearest depot everyday. Pick out publications they want

19. Distribution - Structure
Beat Boys (6am to 7am)
1. The delivery boys have demarcated regions/housing societies, which they serve Hawkers are individuals who do
not have established customers and sell at road sides, bus stands etc. They make small quantity purchases
2. Deliver required publications to proper destinations
3. Have route-wise list of addresses and their required newspaper/publications
4. 3-4 beat boys cover an area via their routes
5. Margin given by TOI to channel members is around 30%
6. More or less uniform rate across the industry
7. Agents get 5-10%, salesmen on payroll get fixed salary
8. Vendor receives 20-25%, to cover the costs incurred due to travel, beat boys etc. It depends on the type and
language of newspaper.

20. Role of each Member
1. Printing Press -The press prints the required units for the day according to the production plan. It takes
the content from the editorial team and prints using high capacity advanced press machines that deliver
the product in packaged condition.
2. Transporters -The packaged newspapers are transported through contracted trucks and vans to different
distribution locations. Each truck / van has a capacity for about 20,000 to 25,000 newspapers.
3. Distribution Centre / Depot / Agents -The distribution centre / Agents receives the copies from the
transporter and stocks it for a short duration before handing it over to the various vendors and hawkers
who source it from the centre. A centre typically employs three persons. The payment for the goods is on a
daily basis.
4. Vendors and Hawkers -Vendors and hawkers source their newspapers from the distribution centre and
deliver them to the customers. Vendors are larger in scale than hawkers and employ delivery boys. The
delivery boys have demarcated regions/housing societies, which they serve. Hawkers are individuals who
do not have established customers and sell at road sides, bus stands etc. They make small quantity
purchases.

21. Financial Transactions and Credit Terms
1. Transporter - Transporters follow contractual terms and conditions. They are paid on per km basis. They
adhere to strict time schedules and penalties are imposed based on the delay in delivery to distribution
centres.
2. Distribution Centre / Depot / Agents -The distribution centre / Agents make payments on weekly /
Monthly basis and receive money from Vendor wither daily or Weekly depending upon business received
and relationship maintained with Vendor from Daily to weekly to fortnightly.
3. Vendors - Vendors buy a fixed, large amount of newspapers daily and pay in cash on a day-to-day basis.
Any paper which remain unsold at the end of the day can be returned back to Newspaper Organisation like
TOI etc.
4. Hawkers - Hawkers typically buy a small quantity (around 100 newspapers) and may not be regular basis.
On paying cash at a cash counter, they can collect the newspaper. There is no arrangement to take back
the unsold stock.

22. Revenue
1. For Organisation like TOI - 80% of the revenue comes from advertising & 20% from sales
2. Distribution points (Company appointed)
3. AGENTS – 5-15%
4. Vendor receives 35-40%, to cover the costs incurred due to travel, beat boys etc. It depends on the type
and language of newspaper.
5. Vendors also make money by inserting pamphlet (Rs. 100 per 500 pamphlets)
6. Beat Boys are normally employed between Rs. 800 to Rs. 1000 per month.
There are various discounts, incentive and bonus schemes by individual organizations such as TOI, DNA etc

23. OUTCOMES OF OUR VISIT TO
TIMES OF INDIA,
BUSINESS STANDARD
AND
GUJARAT SAMACHAR
PRINTING PRESS AND DISTRIBUTION OFFICE

24. POINTS PUBLICATIONS
TIMES OF INDIA / SAMANA BUSINESS STANDARD GUJARAT SAMACHAR
FOUNDED IN THE
YEAR
1838 1975 1932
Published by Bennett, Coleman & Co. Ltd and
owned by Sahu Jain family
Business Standard Ltd (BSL) & Kotak Mahindra Bank
(Owner)
Lok Prakashan Ltd.
Type English daily Premier Business Daily Daily newspaper
Languages English English & Hindi Gujarati
Ranked as 1st in the English dailies 2nd in the business dailies 8th in Regional Dailies
Published from /
Editions
All major cities Weekdays published in al locations, but on Sundays,
only from Mumbai, Delhi, Kolkata and Bangalore
Ahmedabad, Vadodara, Surat, Rajkot,
Bhavnagar, Mumbai, Mehsana, Bhuj and
New York
Readership 3.14 million 6,87,000 4.5 million (in Gujarat)
Circulation 31,40,000 daily more than 1000 cities across the country, i.e, 217,000 10,40,619 daliy
Editorial content Daily news, international news,
business pages, local and
international sports, weekend leisure
reading
Financial and general news Financial and general news
Competitors Hindustan Times, DNA, The Hindu Economic Times, Mint, The Hindu Business Line, The
Financial Express, Financial Chronicle,
Lokmat, Dinakaran, Malayala Manorama
Margins /
Compensation
Margin given by TOI to channel
members is around 30%
1.50 paise per paper to its vendors 2.50/- paise per copy to its vendors

25. Price Monday to Friday – Rs 6/- along with
Mumbai Mirror / Economic Times /
Maharahstra Times
Saturday - Sunday - Rs 7/- along
with Sunday Mumbai Mirror
Monday to Friday – Rs 3 / 5
Saturday – Rs 6/ 7
Sunday – Rs 10/-
Their supplements like Smart Investors; The Strategists
gives a rise in their newspaper distribution.
Weekday’s price of the newspaper is less and
Weekends are more because printing cost is more
Monday to Friday – Rs 4/-
Saturday – Rs 5/-
Sunday – Rs 7/-
Channel Strategy
Channel Selection :
Distribution
Intensity:
Channel
Integration:
Market Factors
Intensive
Ownership
Product & Competitor Factor
Selective S e l e c t i v e & I n t e n s i v e ( G u j a r a t , B a r o d a ,
Rajkot)
Product variety
Sister Newspapers: The Economic
Times, Navbharat Times,
Maharashtra Times and Ei Samay.
Education Times, Times Wellness,
Zig Wheels, Times Life supplement
on Sundays
Have supplements like Smart Investors, The Strategists,
Two monthly magazines - Indian Management and
Business Standard Motoring & Asian Management
Review. BS has a books division, which publishes books
under the BS Books imprint.
Dharma Lok, Sahiyar, Hello Mumbai,
Chitralok, Shatadal, Ravipurti
BSL’s website properties include bshindi.com,
bsmotoring.com, and smartinvestor.in. This last is a
dedicated information-cum-trading site for investors.
Negotiation It takes place as when the
newspapers price increases, the
commission price also increases
It takes place as when the newspapers price increases,
the commission price also increases
It takes place as when the newspapers
price increases, the commission price also
increases
POINTS PUBLICATIONS
TIMES OF INDIA BUSINESS STANDARD GUJARAT SAMACHAR

26. Newspaper Strategies & Distribution Channel
DISTRIBUTION STRATEGYOF “TOI”
There are three ways to sell the “TOI”
1. CASH SALES: Take newspaper from ‘panwala’ or any shop in cash.
2. SUBSCRIPTION SALES: Pay money in advance and read “TOI”
3. LINE SALES: Maximum % of sales comes from this method. Money collection works in reverse order.
DISTRIBUTION STRATEGY OF “BUSINESS STANDARD”
1. BS is sold to specific consumers and are available at all the centres
2. They provide subscription for Business Schools Students
3. They also have consumers who still continue with their old subscription plan
4. They don’t have any new subscription plan for the consumers

27. Promotion
• Business Standard keeps its copies at Kotak Mahindra Bank (all branches) and also initiating the same
at other banks as they want consumers to know about their presence
• From Monday to Saturday, they circulate their newspaper at B Schools for students at a minimal cost
(Rs 325/- approx) and it’s distributed by their area vendor. Also B schools needs to mention the
amount of newspaper. They don’t circulate on Sundays as the B Schools are closed. They don’t have
any schemes for part time MBA students

28. Challenges in Distribution
and how they have been overcome
• Managing vendors is a big challenge which they face on almost daily basis. They have good hold on
vendors, depot managers and have unions at each centre
• Gujarat Samachar had a major conflict with one of its vendors at Mulund area and there was no
distribution of Gujarat Smachar for 3 weeks

29. Service Output Expectations
• Bulk Breaking:
Bulk breaking is done at various levels:
– Printing press
– Vendors
– Agents
– Beat boys
• Spatial Convenience:
– High convenience as the newspapers are delivered at the doorstep
• Waiting Time:
– Moderate

30. Consumer Segments
Gujarat Samachar have in total 4.4 million readers
as per Livemint news - March 2014
Times of India has in total More than 13.5 million readers
as per TOI site

31. Channel – Segment Mapping
CONSUMER (HIGH INVLOVEMENT)
CONSUMER (LOW INVLOVEMENT)
HIGH
CONTENT
QUALITY
LOW
CONTENT
QUALITY

32. Operations of Distribution Channel
(Relationships and Expectations)
Organisation - The Organisation is at the head of the value chain and is clearly the Channel Leader. The
customers come to the vendors and/or hawkers with an intention of buying a particular newspaper which
clearly indicates that the brand of the product is important and not the vendor or hawker as such.
Thus, from the point of view of the vendor/hawker, the supplier power is relatively high. The dealers
(vendors/hawkers) expect the following from the company:
1. Timely delivery of the newspaper each morning in all weather conditions.
2. Proper quantity to be delivered each day as per their demands.
3. Newspaper which are not sold the prior day to be returned and reimbursed.
4. Their commissions to be maintained in the long run and not reduced especially as the newspaper
circulation picks up.
5. Make it easier for them to collect newspapers

33. Operations of Distribution Channel
(Relationships and Expectations)
Dealers / Agents - The dealers (vendors/hawkers) are the company’s sole touch point to the customers. The
company’s relationship with hawkers is temporary since they have a fluctuating demand and hence the
important dealers from the company’s perspective are the vendors who typically have a committed demand
based on the number of customers they serve. The company expects the following from these vendors: To
deliver the newspapers on time to the customers.
1. To ensure that they do not overcharge the customers making it expensive for the customers.
2. To ensure that any supplement/promotional material being sent along with the newspaper by the
company being delivered to the customers without any pilferage (e.g. at times newspaper stick samples
of products on pages in their advertiser’s promotion campaigns).

34. Interview of local Vendor
(Sanpada-NM) Mani Subramanian (91 9820380717)
Q: Cost of the Printing according to you for Newspaper like TOI
A: According to me, It would cost Rs. 60 to TOI but they sell at Rs. 3 (TOI always bundle with other papers like
MM, ET etc) so the actual cost would be Rs. 6, HT, DNA would be at Rs. 3
Q: How do you source Paper?
A: We source Newspaper from Agents i.e. Orbit is Agent for TOI group, Dangad for Lots of newspaper like
Samana, Navsagar, Hindustan times, Lokmat etc and Ambika for DNA, They all come together at Sanapda Railway
station from 4:00am to 5:30am.
Q: How many Newspaper you normally pick up?
A: We pick around 2000 newspaper of various Publications and TOI we source exact 220 as they do not take
it back.
Q: What is your margin?
A: In TOI we get around Rs 2.15 to Rs 2.35 out of Rs 6 depending upon our volume. HT and DNA give us fixed
Rs.1.25 out of Rs 3 (i.e. we source it at Rs 1.75). We prefer selling more other newspaper than TOI due to their
return policy. We also sell TOI at cheaper rate in afternoon if we source to cover our cost.

35. Interview of local Vendor
(Sanpada-NM) Mani Subramanian (91 9820380717)
Q: How many beat boys do you employee?
A: We employee 5 beat boys to service various nodes (Sectors) and societies.We provide them Cycle along with
Monthly salary which varies between Rs. 800 to 1200 per month.
Q: How much do you charge for pamphlet?
A: We charge Rs. 200 per thousand for small or Rs. 300 for large ones.
Q: How do you make payments?
A: We pay monthly to our beat-boys as we collect monthly from our customers. To our agents we either make
weekly or fortnightly or Monthly payments depending upon our relationship.
Q: How much do you make every month?
A: We make around Rs. 30,000 to 40,000 every month but we have to work around 360 days out of 365 days in
year.

36. Interview of local Vendor
(Sanpada-NM) Mani Subramanian (91 9820380717)
Q: What are your timings of work?
A: a) We start in morning at around 4am.
b) We collect pamphlets in the night itself, so organising the paper areas wise, house wise our responsibilities
(I have two boys ding the same at Rs. 1000 per month.
c) We insert pamphlets depending upon customer request for an area.
d) Beat boys get papers by 6am to complete deliveries by 7am.
e) After handling the papers to beat boys, I go at my stand / stall to sell newspapers, magzines till 12 noon.
f) From 12 to 2 pm I eat and carry out calculation of my earnings.
g) From 2:30pm to 5:30pm, I sleep every day and then again from 6 to 8pm I work at my newspaper stand /
stall.
h) From 8 to 10pm I spend time with family and then go to sleep again to get up at 4am sharp to go to
Sanpada railway station.

37. Conclusion
• This Presentation hence finds answer to the question it had raised – “Do you how a newspaper
reaches you?” In course of its unfolding it attempts to show how this simple question has such
complicated answers to make.
• We end the presentation by a small movie prepared by us

38. Queries??

39. References
• Personal experience
• www.slideshare.net
• Google.co.in (For studying various article)
• Audit Bureau of Circulation (http://www.auditbureau.org/)
• Indian Readership Survey 2013

40. Archana Parthasarathy, Sanjay Gupta, Hardik Sheth
(SIESCOMS : EMBA-Marketing Sem-3)