MARKETING STRATEGY ASSIGNMENT TIMES OF INDIA Distribution problems and their solutions. Submitted By: Aarushi Babbar Roll Number: 1830PRESENTATION HIGHLIGHTS I * Distribution Channels * About Times of India * The distribution structure of the DISCUSS Times of India. ¢ The roles of all Intermediaries. * The promotion scheme structure followed by TOI. * Problems in the current system * Solutions and strategy.DISTRIBUTION CHANNELS 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 direct" channel allowing the consumer to buy the good from a wholesaler. Direct channels are considered "shorter’ than "indirect" onesDISTRIBUTION CHANNELS CHANNEL DISTRIBUTION - 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DISTRIBUTION CHANNELS IMPORTANCE OF DISTRIBUTION The newspaper sales involve distributing highly perishable products under severe time constraints. The printed newspapers have to be dispatched to various distributors acrossthe region. The revenue of the newspaper distributor is based on a commission on the sale of every newspaper. The circulation is normally through salesmen appointed and are paid by the distributors, who in turn pass it on to the hawkers. Hawkers, vendors and book stall owners are the last link of the supply chain before newspaper reaches its readers. Responsiveness and efficiency play an important role in newspaper distribution channel.BT TT COMPANY BACKGROUND OMatts Tae Mn TaET: (CoM A= (tan eel tat a Re Re] 45 dailies and periodicals He) Rete eM ieee aToecy ol tor Mae Usd Uae Ieee -te ke groups of consumers ranging from photography to Prete er aCR alana Readership of 76.43 lakhs Srna CMC) Seen Rol el ae Ta aI PNaCe eatBT TT INDUSTRY OVERVIEW More than 130,000 printing presses in India IVelc a aT Clam CTu EMC CMM oN] INR 20 bn+ turnover [oral Te Reto a total I eC-ta aster Ice er Sod ors IVE Tag aC Ae aero Mae Bem Neola gL Miceli Colne Mar talents elas eC anaBT TT INDUSTRY OVERVIEW Circulation [number of copies distributed (not same as sold)] one of the principal f advertising rates Readership: number of people reading the publication Advertising: 80% of the revenue comes from Ero Uat el aon WL i celaaelDISTRIBUTION STRUCTURE OF TIMES OF INDIADISTRIBUTION STRUCTURE OF TIMES OF INDIA Cet NS =o 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DISTRIBUTION STRUCTURE OF TIMES OF INDIA Cet NS =o 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 oron steps of some malls etcDISTRIBUTION STRUCTURE OF TIMES OF INDIA Cet NS =o Agents e¢ 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 C3510 8)DISTRIBUTION STRUCTURE OF TIMES OF INDIA Cet NS =o Vendors e 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DISTRIBUTION STRUCTURE OF TIMES OF INDIA Cet NS =o 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ROLL OF EACH MEMBER 1. Printing Press DUN ee nee Me Mea Re Meee a Rng e Nelsen lM ea lara aie laa) ees ee aah Wee tate Balle ec ce aha eee ana Nae tcl Ca) Ferteetee Rectate isi) 2. Transporters Der tet MN Ce eas act Reon Ream Oe REM Micaras eg og Teeter Toa at SAAN 1 Colello Lar 1eR ole LO PRN LOM ee Te RPM OY Eada lL dC alte PL Ll Ne ahd Sime Uae Ne eee ena Re an a Rea Cn aa cots Saag crea) Pera MRE ae ae MONON NT NC tale Tale Ma eR eM cola a Ree ee Med CNC Va ae om Sell aN oS PANN IE BE Clee Ra co co att aa eo mea Me ag Te Coen ca] CON aaa oR ae ele ote ele ae en ee Raat le ett CIN yo ae Rs iat cert Beto ea oe aoa REM Cee MC ET eR at Ca Tages coe te Rae ee Tats eae (oe ee Talc nT ea eia rea RrsDISTRIBUTION STRUCTURE OF TIMES OF INDIA 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%)DISTRIBUTION STRUCTURE OF TIMES OF INDIA 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 he end of the day can be returned backPROMOTION SCHEMES erie” »~ © 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PROMOTION SCHEMES Discounts © Mainly for institutional sales ° Eg. Bulk sale at schools at discount rates 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PROMOTION SCHEMES Subscription Sales * Offer choice of publication for a certain amount of time at a lump sum discount price e Purpose- gaining new customers and making customer switchASR) aa 1.TIMELY DELIVERY 2.PAYMENT & CLAIM DELAYS. 3.RETURN POLICY 4,.MANUAL PACKAGING SYSTEM TIMELY DELIVERY Important™to.deliver’on time at each T=} Dispatch first to depots that are-farthest Companyemight 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:downsiete OQwnértship.is transferred once paper leaves press Inecasevof-delay, agitatédyvendorsand stall.owners. might:switch to substitutes to satisfy their customersASR) aa 1.TIMELY DELIVERY 2.PAYMENT & CLAIM DELAYS. 3.RETURN POLICY 4,.MANUAL PACKAGING SYSTEM RHE aN 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 distributomte,balance sales &-credit-based promotion,ASR) aa 1.TIMELY DELIVERY 2.PAYMENT & CLAIM DELAYS. 3.RETURN POLICY 4,.MANUAL PACKAGING SYSTEM Pata ey TOlallows up to 2% returns with full refund of costs. In.case itrexceeds the limit; channel members.bear.the loss, Distributoralso allows the same2% returns for. vendors. Issues arise when inventory increases abovea. certain level due tospoor, forecasting-or unforeseen’ reasonsASR) aa 1.TIMELY DELIVERY 2.PAYMENT & CLAIM DELAYS. 3.RETURN POLICY 4,.MANUAL PACKAGING SYSTEM DTV Te eT Automatic & manual packaging, both are used in industry Manual.Packaging has lot of inefficiencies associated Delays - could cascade on to delays.in loading, délivery Human Errors:-could-lead.to.incorrect quantities or editions*being»spacked Onus to make-up is of distributor, as error is detected Ustally.afterleaving printing premises Distributomhas to bear costs of transporting replenishments tovaggrieved vendorsSOU EU aaaTIMELY DELIVERY RECOMMENDATIONS POSSIBLE ROADBLOCKS Local Knowledge about routes e Additional costs due to etc. can be helpful. operational inefficiency to be Timely delivery at important borne by TOI. locations * Routing is not under control of Benchmarking competition, TOI. especially managing routing * Could lead to complete system properly. failure Distributors should take care of * Distributor must be capable of critical vendor locations. handling this taskPAYMENT & CLAIM DELAYS RECOMMENDATIONS POSSIBLE ROADBLOCKS * Formal credit system can be * It can happen that distributor is introduced bearing costs which may not « Higher incentives for timely work payment ¢ Vendors may not be comfortable * Credit period could be with formal credit system extended to Distributor when possible which can be passed on to VendorRETURN POLICY RECOMMENDATIONS POSSIBLE ROADBLOCKS * Benchmarking competition, like HT, the market leader (Gurgaon * Higher costs to TOI region) allows 10% returns with * Would need tighter monitoring full refund by TOI to prevent misuse * TOI too should offer comparable return rates. * Increase flexibility for channel members, which could lead to boost of sales.MANUAL PACKAGING 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OTHER SOLUTIONS AND STRATEGIES 1. Rescheduling of production process. 2. Relocating drop points. 3. Finding the weakest link in the distribution chain and making it better.THANK YOU