Times of India Pricing Strategies PDF

NEWSPAPER PRICING MODEL: ITS
IMPACT ON READERS CHOICES
BY
SOHONG CHAKRABORTY (R01-09-012)

FOR
POST GRADUATE DIPLOMA IN MANAGEMENT

UNDER GUIDANCE FROM
Mr. RAKESH SINGH

Senior Manager, Marketing, Times of India
13/1 & 2, Govt. Place (East), Esplanade Mansion, Kolkata
AND
DR. T.K.GUHA
Dean, JSB, Kolkata
Jyotirmoy School of Business

Jyotirmoy Knowledge Park
Kalikapur, Sonarpur, Kolkata-743330
Newspaper Pricing Model: Its impact on Readers Choice Page 1

DECLARATION
The study on NEWSPAPER PRICING MODEL: ITS IMPACT ON

READERS CHOICES, submitted by us in partial fulfillment of the requirement
for PGDM from JSB, Sonarpur, Kolkata is an original work of my own. I declare
that this project has not been published previously elsewhere; it is the result of my
own effort & has been taken fully for academic purpose. All education materials
consulted in the course of the study have been declared in the reference. I have
done this work independently under guidance of our External Guide: Mr. Rakesh
Singh, Senior Manager of Bennett, Coleman & Co. Ltd, The Times of India Group
and our Internal Guide: Dr. T. K. Guha, Dean and Faculty of JSB, Kolkata. I am
also thankful to Dr. Atri Roy Sengupta, Asst. Professor, HR, JSB and Prof.
Krishanu Maitra, Professor, Marketing, JSB for their help and support provided
for the project. This work has not been submitted in full or part to any Institute or
University for the award of any degree or diploma.
___________________
Sohong Chakraborty

ABSTRACT
The success of any business entirely depends on marketing and research
on the consumer preferences and attitude towards the product.
Marketing plays a vital role in a business to make it a success. It is such
a topic which cannot be learned through books only. It needs to be
learned through practical exposure. In this project I have tried to find
out the way the company like Times of India uses marketing as a key to
success. I have put my best effort to complete this task on the basis of
the skill that I have achieved during my two months internship in The
Times of India and studies in the institute.
However, I would appreciate if any mistakes are brought to my notice
by the readers.
-Sohong Chakraborty
CONTENT
Introduction.............5
Pricing Model..5
How is pricing done in Newspaper Business?12
Price variation and related conditions.13
Company Details.....17
History....17
Various product of The Times Group..19
Objective and Hypothesis..21

Research Objective..21
Hypothesis...21
Method.....22
Result....23
Data Analysis....23
Findings........44
Discussion.45
Conclusion47
Limitation and Future scope of study....48
References.....49
Appendix..50
Questionnaire ..50
INTRODUCTION
Pricing is a key strategic tool in the battle for any goods and services offered in the market. It
generates two items; revenue for the company and other is the cost. Different pricing strategies
are adopted around the world for different consumer goods and services to increase customer
loyalty and profitability.
Pricing Strategy can be done after analyzing such factors for any given goods or services:
Set Pricing Objective

Estimate Demand
Estimate Costs
Analyze Competitors Prices
Select Pricing Policy/Method
Set Final Price
A diagram of different pricing strategies:-
Penetration Pricing:
This strategy is used for new products/services trying to penetrate the market, or existing
products/services entering new markets, by offering initial low prices. The price is deliberately

set at low level to gain customer's interest and establishing a foot-hold in the market. Such low
prices will attract the customer and through continued use and purchase, they may not be
discouraged by any future price increases and remain loyal to the product/service.
In other words, the initial low price that you offer may not even cover all associated costs, but
when you increase the price in the future, it will compensate for the loss you made or any profits
you missed out on.
For example, the first two or three editions of a monthly magazine may be offered at, say, Rs.50,
but after this the magazine price increases to, say, Rs.100. Because most people will have found
interest in the first editions of the magazine, they are likely to continue buying the magazine in
the future.
Competition-based pricing (Influence of Elasticity)

Setting the price based upon prices of the similar competitor products.
Competitive pricing is based on three types of competitive product:
Products have lasting distinctiveness from competitor's product. Here we can assume
The product has low price elasticity.
The product has low cross elasticity.
The demand of the product will rise.
Products have perishable distinctiveness from competitor's product, assuming the

product features are medium distinctiveness.
Products have little distinctiveness from competitor's product. assuming that:
The product has high price elasticity.
The product has some cross elasticity.
No expectation that demand of the product will rise.

Cost-plus pricing
Cost-plus pricing is the simplest pricing method. The firm calculates the cost of producing the
product and adds on a percentage (profit) to that price to give the selling price. This method
although simple has two flaws; it takes no account of demand and there is no way of
determining if potential customers will purchase the product at the calculated price.

This appears in 2 forms, Full cost pricing which takes into consideration both variable and fixed
costs and adds a % markup. The other is Direct cost pricing which is variable costs plus a %
markup, the latter is only used in periods of high competition as this method usually leads to a
loss in the long run.
Contribution margin-based pricing/Contribution Pricing

We know,
Contribution = Selling Price Variable (direct costs)
Contribution margin-based pricing maximizes the profit derived from an individual product,
based on the difference between the product's price and variable costs (the product's contribution
margin per unit), and on ones assumptions regarding the relationship between the products
price and the number of units that can be sold at that price. The product's contribution to total
firm profit (i.e., to operating income) is maximized when a price is chosen that maximizes the
following: (contribution margin per unit) X(number of units sold).
Target pricing
Pricing method whereby the selling price of a product is calculated to produce a particular rate
of return on investment for a specific volume of production. The target pricing method is used
most often by public utilities, like electric and gas companies, and companies whose capital
investment is high, like automobile manufacturers.
Target pricing is not useful for companies whose capital investment is low because, according to
this formula, the selling price will be understated. Also the target pricing method is not keyed to
the demand for the product, and if the entire volume is not sold, a company might sustain an
overall budgetary loss on the product.
Marginal-cost pricing
In business, the practice of setting the price of a product to equal the extra cost of producing an
extra unit of output. By this policy, a producer charges, for each product unit sold, only the
addition to total cost resulting from materials and direct labor. Businesses often set prices close
to marginal cost during periods of poor sales. If, for example, an item has a marginal cost of
$1.00 and a normal selling price is $2.00, the firm selling the item might wish to lower the price
to $1.10 if demand has waned. The business would choose this approach because the
incremental profit of 10 cents from the transaction is better than no sale at all.

Absorption/Full Cost Pricing
Method of pricing in which all costs are recovered. The price of the product includes
the variable cost of each item plus a proportionate amount of the fixed costs. A form of cost plus
pricing
Full Cost Pricing attempting to set price to cover both fixed and variable costs
Absorption Cost Pricing Price set to absorb some of the fixed costs of production
Market Creaming or skimming

Selling a product at a high price, sacrificing high sales to gain a high profit, therefore
skimming the market. Usually employed to reimburse the cost of investment of the original
research into the product commonly used in electronic markets when a new range, such
as DVD players, are firstly dispatched into the market at a high price. This strategy is often used
to target "early adopters" of a product or service. These early adopters are relatively less price-
sensitive because either their need for the product is more than others or they understand the
value of the product better than others. This strategy is employed only for a limited duration to
recover most of investment made to build the product. To gain further market share, a seller
must use other pricing tactics such as economy or penetration. This method can come with some
setbacks as it could leave the product at a high price to competitors.
Value/Premium pricing
Premium pricing is the practice of keeping the price of a product or service artificially high in
order to encourage favorable perceptions among buyers, based solely on the price. The practice
is intended to exploit the (not necessarily justifiable) tendency for buyers to assume that
expensive items enjoy an exceptional reputation or represent exceptional quality and distinction.
Loss leader
Basic Concept In the majority of cases, this pricing strategy is illegal under EU and US
Competition rules. No market leader would wish to sell below cost unless this is part of its
overall strategy. The idea of selling at a loss may appear to be in the public interest and therefore
not often challenged. Only when the leader pushes up prices, it then becomes suspicious. Loss
leadership can be similar to predatory pricing or cross subsidization; both seen as anti-
competitive practices.

Psychological pricing
Pricing designed to have a positive psychological impact. For example, selling a product at
Rs.99.95 or Rs.99.99, rather than at Rs. 100.
Price Matching/ Going Rate Pricing

Many businesses feel that lowering prices to be more competitive can be disastrous for them
(and often very true!) and so instead, they settle for a price that is close to their competitors. Any
price movements made by competition is then mirrored by yourself: so long that you can
compensate for any reductions if they lower their price. An observation made of oligopoly
business behavior in which one company, usually the dominant competitor among several, leads
the way in determining prices, the others soon following.
Your business may be considered as one of the more dominant within its market because you
offer a service or product that is unique or popular (through branding). As a result, you may
have the power to set the price in which your competitors will attempt to follow.
Tender Pricing
Many contracts awarded on a tender basis.
Firms (or firms) submit their price for carrying out the work.
Purchaser then chooses which represents best value
Mostly done in secret.

Price Discrimination:
Price discrimination involves charging different prices for your product/service at certain times,
or to different types of customers. The classic scenario is telephone services charges off-peak
hours are much cheaper than peak hours. It means setting a different price for the same product
in different segments to the market. For example, this can be for different ages or for different
opening times, such as cinema tickets.
This is because they know that their service is in high demand during peak time (around 8am -
6pm) as they are the business operating hours.
Another common discrimination is offering your service at higher prices during the weekend
(Saturday and particularly Sunday) as customers may find it hard to find other alternative
services during this time.
The above examples are all to do with timing, but the other price discrimination is aimed at the
different types of customer. In this case, the best example would be offering students a discount
of, say, 10% for using your service or buying your product, you may even offer your
service/product cheaper to loyal customers, say, those that have been trading with you for more
than a year.
Destroyer/Predatory Pricing:
This strategy is used as an attempt to eliminate competition. It involves lowering your prices to
an extent where competition cannot compete and consequently, they go out of business.
By just reading the last sentence, it sounds very threatening to not only the competition, but also
to yourself: this is what you find with all competition based pricing strategies.
It is therefore important that you recognize how threatening the competition is and research how
competitive they can be with their prices: they may be able to compete with your price cuts and
consequently you both, or even just yourself may go out of business.
Predatory pricing can be said as an aggressive pricing intended to drive out competitors from a
market. It is illegal in some places.
The Other types of pricing strategies are as

follows:-
Pricing to Customer Expectations:

This would involve extensive market research, as the idea is to charge what customers are
willing to pay (within reason).
If your product/service is new or unfamiliar in the market, you can expect potential customers to
give it a low price. Alternatively, if your product/service is popular or unique in the market, you
can expect people to be more favorable toward its value.
If you adopt this strategy, you should review your research periodically, say, every six months
as customers may develop a different attitude toward your product/service. Consequently, in
time, customers may value your product/service differently and so you should change your price
to correspond with customer expectations, whether they are higher or lower.

Limit pricing
A limit price is the price set by a monopolist to discourage economic entry into a market, and is
illegal in many countries. The limit price is the price that the entrant would face upon entering as
long as the incumbent firm did not decrease output. The limit price is often lower than the
average cost of production or just low enough to make entering not profitable. The quantity
produced by the incumbent firm to act as a deterrent to entry is usually larger than would be
optimal for a monopolist, but might still produce higher economic profits than would be earned
under perfect competition. The problem with limit pricing as strategic behavior is that once the
entrant has entered the market, the quantity used as a threat to deter entry is no longer the
incumbent firm's best response. This means that for limit pricing to be an effective deterrent to
entry, the threat must in some way be made credible. A way to achieve this is for the incumbent
firm to constrain itself to produce a certain quantity whether entry occurs or not. An example of
this would be if the firm signed a union contract to employ a certain (high) level of labor for a
long period of time.
Market-oriented pricing
Setting a price based upon analysis and research compiled from the targeted market. Also with
the cost price.
Dynamic pricing
A flexible pricing mechanism made possible by advances in information technology, and
employed mostly by Internet based companies. By responding to market fluctuations or large
amounts of data gathered from customers - ranging from where they live to what they buy to
how much they have spent on past purchases - dynamic pricing allows online companies to
adjust the prices of identical goods to correspond to a customers willingness to pay. The airline
industry is often cited as a dynamic pricing success story. In fact, it employs the technique so
artfully that most of the passengers on any given airplane have paid different ticket prices for the
same flight.
How is pricing done in newspaper business?
Cost of manufacturing a single product like newspaper depends on the cost of printing, cost of
buying rolls of paper sheets (raw material), transportation cost, electricity used, administrative
cost, cost of collecting of daily news and photographs by the press, machinery usage, labor
usage and various other indirect cost factors. The total cost of producing/publishing of
newspaper on a given month divided by the total products manufactured on that particular
month gives the per unit cost of the newspaper. Hence, the output of these factors results into a
price which cant be acceptable by daily consumers of newspaper, ie., the cost of manufacturing
a single news paper is much higher than its MRP (maximum retail price). To reduce the price,
space selling for advertisements is required as it acts as revenue for the newspaper business.
This effort makes the daily newspaper affordable for daily consumption by the consumers.
The pricing model followed by the newspaper business is known as dynamic pricing strategy.
Let us discuss what dynamic pricing is: A flexible pricing mechanism made possible by
advances in information technology, and employed mostly by Internet based companies. By
responding to market fluctuations or large amounts of data gathered from customers - ranging
from where they live to what they buy to how much they have spent on past purchases -
dynamic pricing allows online companies to adjust the prices of identical goods to correspond to
a customers willingness to pay. The airline industry is often cited as a dynamic pricing success
story. In fact, it employs the technique so artfully that most of the passengers on any given
airplane have paid different ticket prices for the same flight. News paper business also follows
the same pricing model where we see to different kind of pricing according to the day. If MRP
of a newspaper cost Rs.2/- on the weekdays then on the weekend we find the MRP of the same
newspaper around Rs.5/-.
Price Variations and related conditions

Cover pricing
The price of a newspaper or magazine which is printed on the cover and paid by the final
purchaser. It is the market rate (MRP) at which it is sold. It depends on various factors like:-
1) What price customers are willing to pay?
This condition depends on the customer who is willing to pay the price for the final good.
Consumers like buying good quality material at low price. The expected price should match the
consumers confidence to afford the good and pay the price. For daily consumption of
newspaper the price should be always set to a reasonable rate.

Generally loyal customers dont think of the price and affords it even in a price rise situation till
it becomes unaffordable.
2) What kind of market condition where the goods are sold?
Market condition depends upon economical factors of the geographic location such as inflation,
depression, post war affected areas, Oil price hick which ultimately increases the transportation
cost of most business, price increase of raw material, perfect competitors in the same business,
shortage of goods availability because of huge increase in demand due to popularity or affects of
any breaking news regarding political turmoil, massive accidents, fluctuations in share market,
etc
3) Strategic position of the company
The strategic position of the company depends upon many factors and is a key issue in the
business environment. The companies are not isolated entities but operate in the context of an
external environment. It is therefore imperative to not only evaluate oneself on an absolute scale
but more so in relation with what is happening on the exterior. One of the foremost prerequisites
in defining an organization's strategic orientation is the knowledge of the organization's current
positioning. An organization operates within certain bounds that are created by its direct
competitors and industry of operations (the immediate neighborhood) as well as the macro-
environment. To estimate the current positioning, these elements have to be analyzed separately
and in unison to understand the possible effects and develop a clearer image of strategic
positioning.
Over the years, various frameworks have been provided by researchers to make the analysis
simpler. To begin stepwise, first we have to understand the macro environment and then the
industry and competitors. It is common understanding that a country's economic health is
inseparably conjoined with its political environment. We are aware of the repercussions of the
world wars, the current hyperinflation in Zimbabwe and many other such examples from the
history that have validated this notion. So without even going into the nuances of the political
impact, one can empirically claim that political environment should be necessarily studied to
assess the strategic position of the organization. In what ways it has a bearing is manifold and
specific to the industry; for the polity being both the legislative and executive body for the entire
nation.

The second important aspect that needs to be analyzed is the economic health of the country of
establishment and the world market. For this, regular scrutinizing has to be done to decipher the
influence of economic decisions made by the government on the industry and possible
turbulences in the external world. Polity has a tremendous bearing on economics and their
exchange has to be thoroughly studied to figure out strategic position. Once we have analyzed
the political and economic environment, we should begin to understand the social factors. The
social fabric of the society is of tremendous significance in shaping up an organization.
Extensive research goes into figuring out the needs and demands of the people and their
expectations, which by itself is quite a task for market research companies. Not just that, the
culture of the place, the traditions, the history everything contributes to the making of the
social fabric. It is within the dynamics of this fabric that an organization directly interacts with
making it one of the key macro environmental factors for assessment. The final analysis deals
with the current technology and its relevant future advancements. Over the years, we have seen
how this world has changed due to the development in science and technology. Many companies
that failed to adapt to the changing environments either perished through major defaulting or
were hostilely acquired by other companies.
As Darwin's theory suggests, the world is all about survival of the fittest. To remain strong in
today's competitive world, technological update is of prime relevance and organizations need to
be aware of it. All these factors when studied together, we gate a complete picture of the
strategic position of a company which can be denoted by a graphical representation.
Stand alone pricing

Method that allocates a portion of common costs to each user by applying a ratio equal to the
stand-alone cost of providing benefits to that user divided by the sum of the stand-alone costs for
all users.
Stand alone pricing is done after the stand alone cost is allocated with a minimal margin. Stand
alone pricing is generally done with bundle pack offers for a limited period. The limitations of
the period are fixed by the company itself and hence demand of the products increases for a
short period. For example, a 100 g soap, a 200g Shampoo and a 150g Talcum Powder, bundle
together (packed in a single package) comes at Rs.80/- whereas, if each of the single product
purchased adds up to Rs 100/-. Now it is up to the customers who get an option of buying the
product according to his will and requirement.
Subscription Pricing
This type of pricing is typically done for adding new customers without subsidizing existing
customers. Subscription of newspaper tends to be low priced then usual as customers pay the
price for a period of time on an upfront basis, ex., monthly or yearly or seasonal. It comes in a
package which ultimately becomes cheaper for new buyers while saving time and money for a
customer. The main issue in newspaper or magazine business is those subscriptions are paid up
front, and this might actually prevent some customers from signing up. But it also helps in
gaining new loyal customer too. Renewal of subscription is also done for the buyers who want
the subscription repeated after completion of the previous subscription contract. An agreement
of subscription has an added advantage for the organization as they can directly interact with the
customer avoiding the vendors. This helps the organization in increasing customer database
marketing as well as personalized marketing thus selling agreement of subscription in a
customized manner to different individuals with different needs. For example, an individual
agrees to subscribe Times of India on a daily basis for a year while the individuals neighbor
wants a subscription of Times of India to be delivered seven days a week as well as Economic
times to be delivered five days a week exceeding the weekends for a period of three years.
Invitation Pricing
Generally, for a new product launched in a given market is always set to a low price to attract
consumer and create a market share of the product. This helps in gaining new customer base as
well as levels over priced product of similar quality. After gaining popularity and creating a
customer base, the price is raised to an affordable rate to generate more profit for a company.
Now days, generally invitation pricing is not in use. An example of invitation pricing is The
Crescent weekly magazine from the Times of India group which has been introduced in the
eastern sector of India recently with a nominal price of Rs. 6/- per copy.

Company Details
The Times Of India was founded on November 3, 1838 as The Bombay Times and Journal of
Commerce, during the British Raj era. Published every Saturday and Wednesday, The Bombay
Times and Journal of Commerce were launched as a bi-weekly edition. It contained news from
Britain and the world, as well as the Subcontinent. The daily editions of the paper were started
from 1850 and in 1861, the Bombay Times was renamed The Times of India. In the 19th century
this newspaper company employed more than 800 people and had a sizable circulation in India
and Europe. It was after India's Independence that the ownership of the paper passed on to the
then famous industrial family of Dalmiyas and later it was taken over by Sahu Shanti Prasad
Jain of the Sahu Jain group from Bijnore, UP.
India's press in the 1840s was a motley collection of small-circulation daily or weekly sheets
printed on rickety presses. Few extended beyond their small communities and seldom tried to
unite the many castes, tribes, and regional subcultures of India. The Anglo-Indian papers
promoted purely British interests. Robert Knight (18251892) was the principal founder and the
first editor of the Times.
The son of a London bank clerk from the lower-middle-class, Knight proved a skilled writer and
passionate reformer. Knight helped create a vibrant national newspaper industry in British India.
When the Sepoy Mutiny erupted, Knight was acting editor of the Bombay Times and Standard.
He broke with the rest of the English language press (which focused on Indian savagery and
treachery) and instead blamed the violence on the lack of discipline and poor leadership in the
army. That angered the Anglo community, but attracted the Times's Indian shareholders, who
made him the permanent editor. Knight blasted the mismanagement and greed of the Raj,
attacking annexation policies that appropriated native lands and arbitrarily imposed taxes on
previously exempt land titles, ridiculing income taxes, and exposing school systems that
disregarded Indian customs and needs. Knight led the paper to national prominence. In 1860, he
bought out the Indian shareholders and merged with the rival Bombay Standard, and started
India's first news agency. It wired Times dispatches to papers across the country and became the
Indian agent for Reuters news service. In 1861, he changed the name from the Bombay Times
and Standard to the Times of India. Knight fought for a press free of prior restraint or
intimidation, frequently resisting the attempts by governments, business interests, and cultural
spokesmen.
The Times of India (TOI) is an English-language broadsheet newspaper that is widely read
throughout India. It has the largest circulation among all English-language newspapers in the
world, across all formats (broadsheet, tabloid, compact, Berliner and online). It is owned and
managed by Bennett, Coleman & Co. Ltd. which is owned by the Sahu Jain family. Indu
Jain belongs to the Sahu Jain family and is the current chairperson of India's largest media
group, Bennett, Coleman & Co. Ltd., which owns the Times of India and other large
newspapers. Her net worth is said to be US$4.4 billion, making her the 17th richest Indian in the
world. She is widowed with two sons.
In 2008, the newspaper reported that (with a circulation of over 3.14 million) it was certified by
the Audit Bureau of Circulations as the world's largest selling English-language daily
newspaper, placing as the 8th largest selling newspaper in any language in the world. According
to the Indian Readership Survey (IRS) 2010, the Times of India is the most widely read English
newspaper in India with a readership of 13.4 million. This ranks the Times of India as the top
English newspaper in India by readership. According to Com-Score, TOI Online is the world's
most-visited newspaper website with 159 million page views in May 2009, ahead of the New
York Times, The Sun, Washington Post, Daily Mail and USA Today websites.
Fact 1: World Top Ten English Dailies (net sales)

1. The Times of India (India): 3,433,000
2. The Sun (UK): 3,046,000

3. USA Today (USA): 2,293,000
4. Daily Mail (UK): 2,194,000
5. The Wall Street Journal (USA): 2,012,000
6. The Daily Mirror (UK): 1,400,000
7. The Hindu (India): 1,331,000
8. The Hindustan Times (India): 1,189,000
9. The Deccan Chronicle (India): 1,003,000
10. The New York Times (USA): 1,001,000
Various Products of The Times Group
The Times of India

The Times of India is the flagship brand of the Group. It is India's premier English daily and
worlds largest circulated English broadsheet daily. It is published from ten cities across India,
has a circulation of over 21,44,842 copies, and is read by over 4.42 million people.(Website:
www.timesofindia.com)
The Economic Times

The Economic Times, started in 1961, is India's largest and among the world's top three English
business dailies. The Economic Times is published simultaneously from seven cities across
India, has a circulation of 400,000 copies, and is read by over 1 million people every day.
(Website: www.economictimes.com).
Navbharat Times
Navbharat Times, launched in 1950, is a widely read and influential Hindi daily. It is published
from Delhi and Mumbai, and has a combined circulation of over 430,000 copies and a
readership of over 1.7 million. (Website: www.navbharattimes.com)
Maharashtra Times

Maharashtra Times is a Marathi newspaper published from Mumbai. It has a circulation of over
200,000 copies, and a readership of over a million. (Website: www.maharashtratimes.com)
Filmfare
Filmfare has evolved as an entertainment medium in itself. The monthly magazine Filmfare
covers the gamut of happenings in show biz, including movies, music and television. The
magazine also sponsors the annual Filmfare awards for excellence in Indian cinema. (Website:
filmfare.indiatimes.com)
Femina
The No. 1 women's magazine in India, Femina caters to the woman of substance. Femina also
organizes and sponsors the Miss India pageant annually. The winners of these contests represent
India in the Miss Universe, Miss World, and Miss Asia-Pacific contests. (Website:
femina.indiatimes.com)
Indiatimes
Indiatimes.com is India's online nerve centre for new, information, entertainment, cricket,
shopping, services and much more. The USP is Content, Commerce and Community. And with
over a billion page views a month.
Fact 2: Current Weekly Billing comparison of different Print Media

Dailies in Kolkata
Ananda Bartaman Aaj

Statesma bazar Kaal
TOI Telegraph n Patrika
Mon 2.50 2.50 2.50 3.50 2.50 3.00

Tue 2.50 2.50 2.50 3.50 2.50 3.00
Wed 2.50 2.50 2.50 3.50 2.50 3.00
Thurs 2.50 2.50 2.50 3.50 2.50 3.00
Fri 2.50 2.50 2.50 3.50 2.50 3.00
Sat 2.50 2.50 2.50 3.50 3.00 3.50
Sun 4.00 5.00 3.50 5.00 4.00 4.00
Wk Billing 19.00 20.00 18.50 26.00 19.50 22.50
Objective and Hypothesis

Research Objectives:
The objective of the project is to figure out that the drop in sales of newspaper is due to price
increase and not due to the quality and service provided. The impact of increase or decrease in
demand of newspaper varies due to such pricing adjustments. Therefore drop in demand leads to
decrease in sales.
Research Questions: The research question is based on a survey of Current Readership

behavior of Kolkata Market assuming that Kolkata newspaper readers take both English and
Bengali newspaper on a daily basis.
Hypotheses:
The hypotheses for the research are:
1) Readers with high satisfaction with the quality and service will be more likely to
continue with the current paper even at a moderate price increase.
2) Readers with a low satisfaction level with quality and service will be less likely to
continue with the current paper even at a moderate price increase.
3) In majority of cases where readers decide to drop newspaper, Bengali newspapers will be
retained.

Method
Method of Data collection:
Sample size: 50 Newspaper Readers
Details of Participation: Chosen randomly by visiting houses (door to door) in Kolkata.
Sampling Technique: Convenience Sampling- We used the Convenience sampling technique,

because we collected all the information from those members of the
population who were conveniently available to provide it. It is not
advantageously placed to get information required.
Research Instrument: Questionnaire designed under the guidance of my Company guide.
Instruments to Measure: Reading habits of newspaper reader
Awareness on price increase
Action taken on such condition

RESULT
Data Analysis (Hypotheses Testing)

Which newspapers do you buy?
I was mainly concerned about the consumer preferences while buying newspaper. So, according
to my objectives, the first thing, which I asked them which newspaper they buy.
According to the response I got this statistics:-
66% of the consumer choose both English and Bengali newspaper
24% of the consumer chooses only English
10% of the consumer chooses others
How do you buy your newspapers?

The next thing was how they buy their newspaper. The mode of buying news paper differs
according to their preferences.

74% of the consumers buy Subscription pricing mode
24% of the consumers buy Stand alone pricing mode
2% of the consumer chooses any others mode/ways like buying from the street hawker or
vendors in the railway station
Are you satisfied with the quality of the newspaper you read?
After they buy the newspaper, are they really satisfied with the quality of the newspaper they
read.
80% of the consumers are satisfied with the quality.
14% of the consumers are neutral about the quality.
6% of the consumers are very satisfied about the quality.
There is no level of dissatisfaction in consumers regarding quality.
Are you satisfied with the price you pay for the newspaper?

The next things asked to the customers are about the price they pay for the newspaper.
63% of the consumers are satisfied with the price.
21% of the consumers are neutral about the price.
12% of the consumers are very satisfied about the price.
4% of the consumers are dissatisfied regarding the price
There is no level of very dissatisfaction in consumers regarding quality.
How much are you satisfied by the service provided by your newspaper
brand?
The next question was if they are satisfied by the service provided by the newspaper brand.
72% of the consumers are neutral with the service.
14% of the consumers are satisfied about the service.
10% of the consumers are very satisfied about the service.
4% of the consumers are dissatisfied regarding the service.

There is no level of very dissatisfaction in consumers regarding quality.
If the current price of your newspaper is increased by 25%, will you continue
reading your existing newspaper?
When I asked them, if they will continue reading their current newspaper if price is increased by
25%,
88% of the consumers will continue with the increased price.
12% of the consumers will not continue.
If the current price of your newspaper is increases by 50%, will you continue
When I asked them, if they will continue reading their current newspaper if price is increased by
50%,

62% of the consumers will not continue.
26% of the consumers will continue with the increased price.
2% of the consumers are indifferent with the increased price.
Suppose there is an increase in price on both of your favorite newspapers

from the current level, which one will you like to drop /stop taking the
newspaper.
52% of the consumers will drop Bengali newspaper.
44% of the consumers will drop English newspaper.
4% of the consumers are indifferent.

The preference (reading habits) and the buying pattern of the consumers
changes according to the Income
The perception of the consumer lot depends upon the income group they fall into. The Income
range is given in alphabets. There are 4 ranges: A(5000-25000), B(25100-45000),C(45100-
65000), D(65100 & above). Among the 50 samples the data collected shows the study of are as
follows:
Choice of Newspaper:
21 consumer preffer to read both english and bengali ,4people preffer only english and 1
in others in income group A.
9 people preffer English and bengali, 4 people preffer only english and 2 consumer
preffer others in income group B.
1 people preffer English and Bengali, 2 consumer preffer only english and 1consumer
preffer other in the income group C.
2 consumer preffer English and bengali both ,2 consumer preffer only english and 1
preffer others in income group D.
Choice of Mode:
19 consumer preffer subcription, 7 preffer stand-alone in the income group A.
11 consumer preffer subcription, 8 preffer stand-alone and 1 others in the income group
B.
3 consumer preffer subcription, 1 preffer stand-alone in the income group C.
4 consumer preffer subcription, 1 preffer stand-alone in the income group D.
Choice of Quality:
21 consumer are satisfied, 3 are nutral and 2 are very satisfied with the quality in the
Income group A.

11 consumer are satisfied, 3 are nutral and 1 consumer is very satisfied with the quality
in the Income group B.
3 consumer are satisfied, 1 are nutral with the quality in the Income group C.
5 consumer are satisfied, with the quality in the Income group D.
Price they pay:

18 consumers are satisfied, 5 are nutral, 2 are very satisfied and 1 consumer is
dissatisfied regarding the price they pay in the income group A.
7 consumers are satisfied, 4 are nutral, 3 are very satisfied and 1 consumer is dissatisfied
regarding the price they pay in the income group B.
3 consumers are satisfied and 1 are nutral regarding the price they pay in the income
group C.
4 consumers are satisfied, 1 are nutral, regarding the price they pay in the income group
D.
Service they get:

17 consumers are satisfied, 4 are nutral, 4 are very satisfied and 1 consumer is very
dissatisfied regarding the sevice in the income group A.
11 consumers are satisfied, 3 are nutral, 1 are very satisfied regarding the sevice in the
income group B.
3 consumers are satisfied and 1 is dissatisfied regarding the sevice in the income group
C.
5 consumers are satisfied regarding the sevice in the income group D.
By 25% price increase:

22 consumer say yes for continuing existing paper and 4 consumer say no when the price
is increased for the income group A.
14 consumer say yes and 1 consumer say no when the price is increased for the income
group B.
group C.
5 consumer say yes when the price is increased for the income group D.
By 50% price increase:

group A.
group B.
group C.
group D.
Drop Newspaper:
15 consumers drop english, 11 will drop bengali in the income group A.
5 consumers drop english, 8 will drop bengali and 1 consumer have indifferent decission
in the income group B.
1 consumers drop english, 2 will drop bengali and 1 consumer have indifferent decission
in the income group C.
5 will drop bengali in the income group D.

According to the prefference of Female consumers the following data has
been obtained:

Among the 50 sample collected 16 newspaper readers are female.
10 preffer English and bengali, 4 preffer only English and 2 female consumer preffer
other newspapers.
13 preffer subcription, 2 preffer stand-alone and 1 preffer other mode of buying

newspaper.
11 are satisfied, 4 are nutral and 1 is very satisfied with the quality of the newspaper.
10 are satisfied, 4 are nutral, 1 is very satisfied and 1 is dissatisfied with the price of the
newspaper.

10 are satisfied, 5 are nutral and 1 is very satisfied with the service provided by the
newspaper.
15 consumer says yes and 1 say no with the 25% increase in price of newspaper they
read.
7 consumer says yes and 9 say no with the 50% increase in price of newspaper they read.
7 consumer says drop english and 9 say drop bengali if both the prices are increase in
price of newspaper they read.

According to the prefference of Male consumers the following data has been
obtained:
Among the 50 sample collected 34 newspaper readers are male.
23 preffer English and bengali, 8 preffer only English and 3 male consumer preffer other
newspapers.
24 preffer subcription, 10 preffer stand-alone mode of buying newspaper.
29 are satisfied, 3 are nutral, 2 is very satisfied with the quality of the newspaper.
22 are satisfied, 7 are nutral, 4 is very satisfied and 1 is dissatisfied with the price of the
newspaper.
26 are satisfied, 2 are nutral, 4 is very satisfied and 2 are dissatisfied with the service
provided by the newspaper.

29 consumer says yes and 5 say no with the 25% increase in price of newspaper they
read.
11 consumer says yes, 22 say no and 1 is indifferent with the 50% increase in price of
newspaper they read.
15 consumer says drop english, 17 say drop bengali and 2 are indifferent if both the
prices are increase in price of newspaper they read.
Multiple Regression Analysis

Variables Entered/Removedb
Model Variables Entered Variables Removed Method

1 SATS Enter
SATQa
a. All requested variables entered.
b. Dependent variable: S150
Model summary
Model R R square Adjusted R Std error of

Square the
estimat
e
1 .148a .022 -.020 .5398
a. Predictors: (Constant),SATS,SATQ
Anovab
Model Sum of Squars df Mean Square F Sig.
1 Regression .305 2 .152 .523 .596a
Residual 13.695 47 .291
Total 14.000 49
a. Predictors: : (Constant),SATS,SATQ
Coefficientsa

Model Unstandardized Coefficients Standardized t Sig.
Coeffic
ient
B Std. Error Beta
1 (Constant) 2.009 .706 2.846 .007
SATQ 2.831E-02 .197 .024 .143 .887
SATS -.134 .140 -.157 -.958 .343
a. Dependent Variable: S150
After multiple regression was done by SPSS, the result obtained is as follows:
The regression model is not significant.
Quality and Service satisfaction will not have any significant impact on consumer
decision, if the prices go up by 50%.
Variables Entered/Removedb
Model Variables Entered Variables Removed Method
1 SEXa Enter
a. All requested variables entered.
Model summary
Model R R square Adjusted R Std error of

Square the
estimat
e
1 .183a .034 .013 .5294
a. Predictors: (Constant),SATS,SATQ
Anovab
Model Sum of Squars df Mean Square F Sig.
1 Regression .458 1 .458 1.634 .207a
Residual 13.175 47 .280
Total 13.633 48
a. Predictors: : (Constant),SEX
Coefficientsa

Model Unstandardized Coefficients Standardized t Sig.
Coeffic
ient
B Std. Error Beta
1 (Constant) 1.886 .227 8.299 .000
SEX -.210 .164 -.183 -1.278 .207
a. Dependent Variable: S150
Gender and buying decision are not significant according to SPSS analysis.
FINDINGS
According to the survey:
Consumer choice/preference depends on income and gender.

Quality and service satisfaction does not impact consumers decision while buying
newspaper.
Price plays a huge part while buying decisions are made by the consumer.
Most of the consumers are satisfied with the service provided by the newspaper
companies.
80% of the consumers are satisfied with the quality of the newspaper.
About 74% consumers prefer to buy in a subscription based pricing model.
Consumers do not have language preference while buying newspaper.
Discussion
Logic behind the Finding

We have already divided the income of consumers into 4 different categories.

In the discussed, income range A (5000-25000) category, falls perfect with 24 consumers
who are young in the industry or retired personals. The income range is low but
preference wise the tendency to gather knowledge is more for the young and retired
persons who are above 60 yrs of age. The young consumers are energetic and have fresh
mind and has a regular reading habit. Whereas retired people has less work and more
leisure time to spent which they utilize by reading newspapers.
In the income range B (25100-45000) category are middle level executives dont get
ample of time to spent at home due to work pressure. The middle level executives
generally read newspaper which is supplied in their own office desk or what they get in
the client places. News from internet can be a substitute for these middle level executives
to save time.
Quality and Service do not impress consumers discussion as they are assumed to be
good enough but depends upon the price they pay for the product. Reading a newspaper
is a kind of addiction of gaining knowledge and daily updates because of its quality of
news. Consumers generally get their newspaper by early morning which is supplied by
the newspaper vendors. They have a tendency to read it while having their morning tea
or breakfast. A consumer does not change his/her newspaper brand because of service.
Rather practically changes the vendor who supplies the daily newspaper due to lack of
service. If the price of the consumers newspaper brand goes beyond limit of afford, then
he/she might change the brand in this situation. Very negligible amount of consumers are
dissatisfied by the service provided.
Subscription based pricing model is much preferred by the consumers then stand alone
pricing. Subscription based pricing is much cheaper and affordable compared to
standalone based pricing model.
Consumers do not have language preferences while buying newspaper but more depends
on the quality of the news printed on the daily basis. The logic behind this goes back to
the reading habits and preferences which are already mentioned.
Gender differentiate the reading habits as female generally likes cookery section,
decoration, shopping information, short stories, zodiac columns and movie gossips etc.
while male are more prone to politics, stock market updates, major accidental news,
sports news etc. So the logic behind reading a newspaper brand is also dependent upon
topics covered by that particular newspaper.

Conclusion
At the end of the Summer Internship Project the ultimate understanding what I got during these
two months, that this has been a life time opportunity and a great learning experience for me.
Regarding the report after all the data analysis work I understood that the newspaper pricing
models which are discussed in the report has a steady impact on readers choices/preferences.
Consumers prefer buying newspaper in subscription mode as it becomes affordable, cheaper and
with good amount of discounted rate. Consumption pattern differs between male and female

because of the quality of the contents covered. Young executives and retired personals are the
most serious readers. While the middle and upper level executives have different preferences or
buying pattern. With quality and service satisfaction will not have any significant impact on
buying pattern of consumers if the price goes up by 50%. But with 25% of increase consumers
will continue their existing newspaper. So with affordable price consumers will continue buying
their favorite brand till the new price revision impacts the buying decision of the consumer.
Limitations and future scope of study
The limitation of the report:
The sample size can be increased in future
Bias decision of consumers can have a hugely impact on the research work.
Consumers who are not interested to give their demographic details like income can have
a impact on the research work.
Data collection of consumers falling under C or D income category can be increased

subsequently to get a better view of their preferences.
All customers did not respond to our survey.
The collected samples are based on posh localities of South Kolkata who are well settled
but the consumers who live in the outskirts or suburbs can give a brighter view of
preferences.
In future the scope of the study can be done in a better way by exploiting the limitations to get a
better view.
References
Websites:
www.wikipedia.com
www.indiatimes.com
www.allstats.com
www.timesofindia.com

Books:
Statistical Tools for Managers, D.P. Apte
Appendix
Questionnaire used for conducting survey:
Dear Sir/Madam,

I am a PGDM student working on my summer internship project. This data collection is
being done purely for academic purpose only and your responses will be treated in strict
confidentiality.
Thank you very much for your time.
Tick in the following according to your newspaper consumption and reading habits:
1) Which newspapers do you buy?
a) Telegraph b) Anandabazar Patrika c) Times of India d) Bartaman e) Aaj- Kaal f)

Any others, please mention .
2) How do you buy your newspapers?
a) Stand-alone pricing b) Subscription pricing c) Any others ways
3) Are you satisfied with the quality of the newspaper you read?
1) Very dissatisfied 2) Dissatisfied 3) Neutral 4) Satisfied 5) Very satisfied
4) Are you satisfied with the price you pay for the newspaper?
5) How much are you satisfied by the service provided by your newspaper brand?
6) If the current price of your newspaper is increased by 25%, will you continue
a) Yes b) No
7) If the current price of your newspaper is increases by 50%, will you continue
a) Yes b) No
8) Suppose there is an increase in price on both of your favorite newspapers from the
current level, which one will you like to drop /stop taking the newspaper.
a) English Paper b) Bengali paper
9) Customer Details:
Name:
Address: ................................
..Pin:...
Telephone:..Mobile No:.
Occupation:....Income:...
Age:Sex:.....


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NEWSPAPER PRICING MODEL: ITS

IMPACT ON READERS CHOICES

SOHONG CHAKRABORTY (R01-09-012)

POST GRADUATE DIPLOMA IN MANAGEMENT

Mr. RAKESH SINGH

Jyotirmoy School of Business

Newspaper Pricing Model: Its impact on Readers Choice Page 1

The study on NEWSPAPER PRICING MODEL: ITS IMPACT ON

Newspaper Pricing Model: Its impact on Readers Choice Page 2

How is pricing done in Newspaper Business?12

Price variation and related conditions.13

Various product of The Times Group..19

Objective and Hypothesis..21

Set Pricing Objective

A diagram of different pricing strategies:-

Newspaper Pricing Model: Its impact on Readers Choice Page 5

Competition-based pricing (Influence of Elasticity)

Competitive pricing is based on three types of competitive product:

The product has low price elasticity.

The product has low cross elasticity.

The demand of the product will rise.

Products have perishable distinctiveness from competitor's product, assuming the

Products have little distinctiveness from competitor's product. assuming that:

The product has high price elasticity.

The product has some cross elasticity.

No expectation that demand of the product will rise.

Newspaper Pricing Model: Its impact on Readers Choice Page 6

Contribution margin-based pricing/Contribution Pricing

Contribution = Selling Price Variable (direct costs)

Newspaper Pricing Model: Its impact on Readers Choice Page 7

Market Creaming or skimming

Newspaper Pricing Model: Its impact on Readers Choice Page 8

Price Matching/ Going Rate Pricing

Many contracts awarded on a tender basis.

Purchaser then chooses which represents best value

Mostly done in secret.

The Other types of pricing strategies are as

Pricing to Customer Expectations:

Newspaper Pricing Model: Its impact on Readers Choice Page 10

How is pricing done in newspaper business?

Price Variations and related conditions

1) What price customers are willing to pay?

Newspaper Pricing Model: Its impact on Readers Choice Page 12

2) What kind of market condition where the goods are sold?

3) Strategic position of the company

Newspaper Pricing Model: Its impact on Readers Choice Page 13

Stand alone pricing

Newspaper Pricing Model: Its impact on Readers Choice Page 15

Fact 1: World Top Ten English Dailies (net sales)

2. The Sun (UK): 3,046,000

Newspaper Pricing Model: Its impact on Readers Choice Page 17

4. Daily Mail (UK): 2,194,000

5. The Wall Street Journal (USA): 2,012,000

6. The Daily Mirror (UK): 1,400,000

7. The Hindu (India): 1,331,000

8. The Hindustan Times (India): 1,189,000

9. The Deccan Chronicle (India): 1,003,000

10. The New York Times (USA): 1,001,000

Various Products of The Times Group

The Times of India

The Economic Times

Newspaper Pricing Model: Its impact on Readers Choice Page 18

Fact 2: Current Weekly Billing comparison of different Print Media