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

17.
Issues Identified
Timely Delivery
Payment & Claim Delays
Return Policy
Manual Packaging system

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

26.
THANK YOU