1. 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
2. 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
3. Company Background
Owned and managed by Bennett, Coleman & Co.
Ltd.
45 dailies and periodicals
108 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
4. Industry Overview
More than 1,30,000 printing presses in India
More than 10m families involved in the
industry
INR 20 bn+ turnover
Per capita consumption of paper & boards -
4.5 kgs
Machinery - new & second-hand -
predominately from China, France, England,
Germany
5. Industry Overview
Circulation 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
Advertising
80% of the revenue comes from advertising &
20% from sales
6. Distribution - Structure
The Times of India
Printing Press
Depots Agents
Vendors Vendors
Beat Boys Newspaper
Stands
Beat Boys
(3-4)
Newspaper
Stands
Readers
7. Channel Members
Printing 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
8. Channel Members
Depots
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 2
Vendor code Qty to be Delivered Qty Actually Delivered Qty to be Delivered Qty Actually Delivered
X
Y
9. Channel Members
Agents
Employed where distribution is not organized
Exclusive agents of TOI
Work on commission, themselves act as salesmen
Delhi market- Working with depot
Gurgaon- Working with agency system
10. Channel Members
Vendors
Like retailers. Link between depot and end consumer
Go to nearest depot everyday. Pick out publications
they want
They sell via : door-to-door beat boys/single point
newspaper stands
MDI vendor serve in areas – Sector 14 and MDI. He
collects newspapers from Old Bus Stand Agent
11. Channel Members
Beat 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
Deliver required publications to proper destinations
Have route-wise list of addresses and their required
newspaper/publications
3-4 beat boys cover an area via their routes
12. InformationFlow
New consumer/Existing consumer taking or terminating subscription
Inform their Vendor( increase/decrease his order by one )
Vendor Informs the distributor
Distributor informs the company.
13. Channel Margins
Margin given by TOI to channel members is
around 30%
More or less uniform rate across the industry
Agents get 5-10%, salesmen on payroll get fixed
salary
Vendor 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%)
14. Credit Periods
30 day credit period to distributor is offered,
subject to 3 month security deposit
For 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
15. Promotion Schemes
Trade 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
16. Promotion Schemes
Reader Schemes
Directed at final consumer/reader. Mainly to draw in new
customers
Varies depending on location & demography
Could include trials, discounts, freebies, combo offers etc
Subscription Sales
Offer choice of publication for a certain amount of time
at a lump sum discount price
Purpose- gaining new customers and making customer
switch
18. 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
19. 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
20. Payment & Claim Delays
Informal Credit terms between distributor &
vendor
Chances of default are higher
Probability is higher towards month end when
vendors are cash-strapped
Could translate into distributor defaulting on
payment to TOI
Challenge for distributor to balance sales & credit
based promotion
21. 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
22. Return Policy
TOI allows up to 2% returns with full refund of
costs
In case it exceeds the limit, channel members
bear the loss
Distributor also allows the same 2% returns
for vendors
Issues arise when inventory increases above a
certain level due to poor forecasting or
unforeseen reasons
23. 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
24. 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
25. 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