Newspapers in India, as elsewhere in the world, are habit-forming products. Readers grow used to a certain format and style along with their morning cup of tea or coffee, and it takes a lot to make them change. In Kolkata, The Telegraph, a daily produced by the Ananda Bazar Patrika group, had to fight for years to overtake The Statesman, which had earlier been the city’s dominant English language daily. The trade unions, which refused to allow the latter to modernize, had a role to play in this. Similar battles are taking place among daily newspapers in other cities. In Delhi, The Times of India (ToI) is battling it out with Hindustan Times (HT). Both sides claim victory. In Chennai, the Hindu has beaten back its challengers.
In Mumbai, one of the most competitive markets and the richest in terms of advertising revenue, ToI still is the dominant daily — but it faces a rival that has been shaking up the market for the past three years. Daily News & Analysis (DNA), which was launched in the city on July 30, 2005, has built a readership of 622,000, according to data from the 2008 Indian Readership Survey (IRS). ToI is ahead with 1,571,000 and is followed by stable mate Mumbai Mirror (737,000). But Mirror piggybacks on ToI — you can buy the two of them at a combination price — so some people question the readership numbers. DNA is No. 3, ahead of old-timers like Mid-Day (538,000) and newcomers like HT (381,000), which started its Mumbai edition in mid-July 2005.
DNA’s battle with the ToI in Mumbai offers insights into the model that the Rs3,000 crore ($600 million) Bhaskar Group uses to penetrate new markets. DNA is the first English venture of the Bhopal-based conglomerate, which owns several Indian language newspapers such as Dainik Bhaskar in Hindi and Divya Bhaskar in Gujarati. Experts interviewed by India Knowledge@Wharton say that the Bhaskar Group’s growth strategy can teach important lessons on the growing market for Indian language publications as well as the importance of market research in India’s media industry.
“When we looked around, we saw that the vernacular (or Indian language) markets were taken for granted,” says Girish Agarwaal (who spells his name with an added ‘a’), a director of DB Corp., a newly formed company that oversees the group’s media interests. (DNA is run by a different company — Diligent Media, a joint venture of the Bhaskar Group and Subhash Chandra, founder of Zee TV.) “Publishers just assumed that readers wanted certain things,” Agarwaal continues. They gave them just that through the least expensive means. He gives an example. Gujaratis are very business minded. The assumption in the Gujarati press was that business should dominate Page 1. A little research showed that the folks in this western Indian state were just as keen on movies and cricket — which are practically religions in India — as readers from other Indian states.
Market Research — or what some people in Bhaskar describe as MR — is crucial to the story of this publishing house. The Bhaskar group started in 1955 with a Hindi morning daily called Prakash. It sold some 2,000 copies and soon folded. The driving force was Girish’s grandfather and father of current chairman Ramesh Agarwal. “I was the odd-job boy,” recollects Ramesh.
Dainik Bhaskar, which is today India’s No. 2 Hindi daily with an IRS figure of 31.9 million (Dainik Jagran leads with 56.6 million) was launched in 1965. When the new generation of Agarwals — Girish, his elder brother Sudhir and younger brother Pawan — started getting involved, the pace of growth picked up. The inflexion point was perhaps the launch of the Indore edition in 1983. “At that time Nai Duniya was the market leader with a circulation of 120,000,” says Ramesh. Dainik Bhaskar started with an initial print run of around 30,000. It stepped that up rapidly. It offered the readers new types of content. It became No. 1 in months. Since then, Dainik Bhaskar has chosen its new markets well. “In every city we have gone after that, our approach has been to be No. 1 from day one,” says Girish, who has been handling sales and marketing. Sudhir, who is managing director, oversees editorial content while Pawan is responsible for technology, human resources and new initiatives. Ramesh oversees the group’s non-media businesses. The conglomerate is involved in solvent extraction (revenues: Rs1,289 crore — US$265 million) and textiles (Rs228 crore — US$47 million) plus several other smaller businesses which don’t contribute much today. Publishing (Rs782 crore — US$160 million) is less than a third of the business.
Surprising the Reader
The Bhaskar Group launched Divya Bhaskar — a Gujarati daily — in 2003. Today, it has a readership of 6 million. (Sandesh has 6.9 million and Gujarat Samachar 8.8 million.) Is Divya Bhaskar No. 1? According to the Agarwals, in most of the markets in which it is available, the answer is “Yes”. Competitors don’t necessarily agree. But the Agarwals have achieved something that goes beyond quibbling over numbers. They have put the reader on center stage. “The vernacular Press in India has been rather static in its approach to the market, its sets of consumers and their changing needs, wants, aspirations and desires,” says Harish Bijoor, brand specialist and CEO of Harish Bijoor Consults, a Bangalore based consulting firm.
“Indian newspapers were ignoring readers until the advent of the Internet,” notes Sridhar Samu, assistant professor of strategic marketing at the Hyderabad-based Indian School of Business (ISB). “Once the Internet came, they started to serve the computer-savvy market slightly better by creating and maintaining a website. However, they still continued to neglect the rest of the market and the bulk of this was in the rural areas. This rural market not only suffered because of the content (or lack of content), but also because of distribution and pricing issues.”
The Bhaskar Group has had a different approach. It tries to learn what the market wants, and instead of outsourcing this task to a market research agency, it does this largely in-house. For example, when Dainik Bhaskar made its Rajasthan entry in 1996 with its Jaipur edition, it surveyed 200,000 potential readers. Before launching DNA in Mumbai, it went one better; some 600,000 people were surveyed in the first round. “For us, this is much more than market research; it is a way of involving the reader,” says Girish. Adds Pawan: “We have always looked at what our consumers want. We have always looked at things that are latent rather than what they already know. This has been our primary differentiator in our approach to content. We look at how we can surprise our reader rather than just please him.”
The number of readers that the Bhaskar Group surveys is massive. “If a survey of 500,000 people were done by an outside agency, the interviews alone would cost Rs1.25 crore (US$250,000),” says Bijoor. And the number crunching would further inflate the bill. “At any point of time, I can call upon 500 people and they’ll be there,” says Ramesh. This small army — the core research team — is drawn from both the media arm and the group’s other businesses. But does this group deliver? Girish says they are trained and they have more commitment. The survey is done over a couple of months, so it’s not a big strain. It also makes a difference that a person from Dainik Bhaskar is administering the questionnaire. It’s not a college student making some pocket money but an employee aware of the product. Most prospects — who are potential readers — are interviewed twice.
This approach has worked, and observers say it goes well beyond traditional market research. “I would consider this part of a relationship-building process,” says Samu of ISB. “Increasing the level of involvement of consumers with any product or brand can lead to higher levels of commitment to the product and a continued engagement with it. Customer relationship management is a well-established field within marketing and has been used by international companies, such as Unilever with their Dove brand.”
“This is not plain old market research,” says Bijoor. “I believe it is intrusive marketing. It is marketing of the paper and its appeal intrusively from Day 1. It is a way of interactive marketing as well. The reader gets involved in putting together the formula for her paper, right in her own home. This becomes a talking point. The newspaper gets created amidst large sets of consumers and not dipstick sample sizes. To that extent it is intrusive, interactive, involving and lowbrow. Readers and consumers love this. The first one that does this gets remembered and gets away with it. If someone else repeats it, the benefit is less.”
Bhaskar Group executives say the purpose of the exercise is not just to create awareness, but to get readers involved in designing the newspaper. Ramesh gives an example. When they launched Diyva Bhaskar in Gujarat, their research discovered that readers preferred a mixture of English and Gujarati (the easily understood language of the ordinary man) rather than the pure Gujarati (which had little presence outside the textbooks). “That’s what we gave them,” he says. Adds group editor Shravan Garg: “The story of successful newspapers should not be different from the box-office hits of Bollywood.” (In India’s film capital and ad world, the language of the movies is Hinglish — an amalgam of Hindi and English. Even American icon Pepsi launched in India with the line: “Yehi hai right choice, baby.”)
Another example, says Ramesh, is that in the past, stock market quotes in all Gujarati papers were listed according to the Gujarati names of the companies. Nobody could find a company without a lot of searching. (People were used to referring to them by their English acronyms.) “We started listing them in English,” says Ramesh. “Now everybody does that.” Girish adds: “When you get your readers involved in the creation process, you create a sense of ownership.”
“It depends on the level of involvement the company is able to create,” says Samu of ISB. “It is possible for consumers to identify with the product (normally more with a brand rather than a product) when they feel that the company is responsive to their suggestions. This is typically referred to as “brand community” and is part of the marketing of some well-known international brands such as Harley Davidson.” Adds Bijoor: “Consumers identify with the product, particularly if you keep harping about it all the time, as the Bhaskar group has done. You must not only do it, but you must also keep reminding readers that you have done it.”
There were other launch innovations, too. Among them: an invitation price lower than the normal rate and a six-month subscription offer at a discounted rate. “If people willingly pay the full price for a car and then wait several months for delivery, why shouldn’t they do it for a newspaper?” asks Pawan. Some of these techniques, however, have been tried out by others.
“Pre-selling of a paper is a price bundling strategy,” says Bijoor. “When you adopt this, you adopt a discounting strategy. This helps because it does wonders to the working capital requirement of the publication and costs less than market-borrowed funds, ensures a six-month loyalty period for a newspaper in an individual home, ensures lock-in of the reader, helps facilitate an environment of sameness of publication in an individual home which results in reduction of dissonance with the brand due to repeat use alone, and most importantly is a barrier to entry for other publications into the home.”
“On a scale of 1 (not innovation) to 10 (high level of innovation), I would rank pre-selling as a 3 or 4,” says Samu. “So it is not really a significant innovation. Magazines have been doing this for a long time. However, this was one of the first examples of a newspaper doing this and it has certainly worked very well for them.”
What about the invitation price? “An invitation price goes back to theories of learning,” Samu explains. “When consumers are given an opportunity to buy something at a low invitation price, they are more likely to buy the product. After a few purchases, consumers learn to like the product and they continue to purchase it even after the price reverts back to its normal level. Of course, there is a significant drop-off if regular prices are much higher than the invitation price.”
India’s leading publishing house, Bennett Coleman & Co., which publishes The Times of India, has experimented with these marketing tactics. With several publications, its marketing executives have also tried combination subscription pricing for various publications and have extended the concept to ad rates. What makes the Bhaskar Group’s approach different is the massive consumer survey, which has made it the subject of various Indian case studies. According to a report by Erehwon Innovation Consulting, “The Dainik survey is an awesome experience. They build their own teams of part-timers from scratch. For instance, in Ahmedabad [for the Divya Bhaskar launch], they used 1,050 surveyors, 64 supervisors, 16 zonal managers and four divisional managers. Dainik surveyed 1,200,000 households — possibly the single biggest consumer contact program in history. And they met each household twice.
“Intense training was conducted on grooming, etiquette, body language, social skills and methods of engagement…. The surveyors did so well that when they went back for the second round, they were greeted like long-lost friends and offered refreshments…. Their morning begins with a prayer… with over 200 people standing in straight lines and singing in unison… Then after a short briefing, they hit the road.”
Divya Bhaskar has also been the subject of a case study by the Indian Institute of Management (Ahmedabad), and Dainik Bhaskar’s Jaipur launch has been likewise written up by the Mudra Institute of Communications, also in Hyderabad. “The strength of the group has been its [ability to] connect at the ground level with not only the channel that distributes its publications, but the readers in the end-home as well,” says Bijoor.
Sudhir Agarwal has a problem, however, with all these case studies that celebrate the group’s “marketing” achievements. “In my view, ‘case studies in marketing’ should not be misunderstood in the editorial context,” he says. “Making a product successful requires a holistic approach. When you reach a new market or a new reader, what matters most are the company’s name, its goodwill, its past successes and the kind of emotional connectivity it can offer. The reader is yet to see the product editorially. In a world dominated by corporate competition, the best of editorial content may fail to see the light of day if not marketed properly. But, at the same time, it should also be accepted that marketing alone will not help any product sustain itself for a long time. The successes of Dainik Bhaskar and Divya Bhaskar should be considered case studies in editorial marketing.”