SALES AND DISTRIBUTION

PROJECT REPORT ON HINDUSTAN TIMES AND INDIA TODAY

GROUP 6

PANKAJ
PIYUSH
RAHUL

2. EXECUTIVE SUMMARY
The project tries to analyse the sales and distribution structure of two companies Hindustan
Times and India Today. The project main objective is to make a comparative study with the
help of information from the companies. The main objectives of the study are

The study of the sales force structure and the competitive environment they are
working. The project tries to determine the effect of challenger sales force on the
follower sales force.
The levels of distribution in the two companies and suggest ways to make them
efficient. The project also tries to highlight dynamics of the distribution level.

The main findings of the study are that:

The wholesaler level of the India Today distribution channel can be eliminated within
a limited region where the penetration of the company is high.
The compensation of the sales force of India Today could be linked to the sales
volume as we see that competitive pressure over the magazine has increased.

Table of Contents
2. EXECUTIVE SUMMARY

3. INTRODUCTION

3.1 INDUSTRY GROWTH OVER THE LAST FIVE YEARS

3.2 COMPANY AND INDUSTRY FORECAST FOR THE NEXT 3 YEARS (2014-2017)
3.3 ENVIRONMENTAL SCAN FOR LAST TWO YEARS:
3.4 IDENTIFICATION OF MAJOR CHANGES IN TARGET MARKET PROFILE AND CONSUMER BEHAVIOUR
3.5 SWOT ANALYSIS OF HINDUSTAN TIMES AND INDIA TODAY

4
6
7
9
10

4. HINDUSTAN TIMES

11

4.1 SALES ORGANISATION AND TERRITORY DESIGN:

11
4.1.1 SALES FORCE ORGANIZATION:
12
4.1.2 RANKING OF SKILL SETS REQUIRED BY THE SUPERVISOR FOR THE SALES STAFF:
13
4.1.3 RECRUITMENT AND SELECTION
14
4.1.4 EFFECTIVENESS OF DIFFERENT TRAINING METHODS FOR SALES STAFF:
14
4.1.5 COMPENSATION STRUCTURE WITH AIM OF FINDING RATIO OF FIXED AND VARIABLE AND
EFFECT ON MORALE:
15
4.1.6 METHOD OF PROSPECTING AND REPORTING WITH THE DEGREE OF SALES FORCE AUTOMATION:
16
4.2 DISTRIBUTION
17
4.2.1 MARKETING FLOWS CONSIDERED IMPORTANT BY THE CUSTOMERS FOR THE CATEGORY
17
4.2.2 ROUTE BACK FROM RETAILER TO MANUFACTURER TO DETERMINE LEVELS AND INTENSITY OF DISTRIBUTION
18
4.2.3 IDENTIFY AREAS OF VERTICAL AND HORIZONTAL CONFLICT AND POSSIBLE SOLUTIONS
19
4.2.4 IMPACT OF MODERN RETAIL ON DISTRIBUTION
20
4.2.5 TRADE MARGINS AND OTHER DISCOUNTS
20
4.2.6 IMPACT OF INTERNET ON DISTRIBUTION
21
4.2.7 SUPPLY CHAIN OF THE INDUSTRY
21
4.2.8 LEVEL OF COOPERATIVE ADVERTISING
21
4.2.9 DAILY SCHEDULE OF THE CENTRE MANAGER (THE EXECUTIVE)
22
5. INDIA TODAY

23

5.1 SALES
5.1.1 ORGANISATION AND SALES STRUCTURE
5.1.2 SALES ORGANISATION AND TERRITORY DESIGN. PLEASE REVIEW THE ADVANTAGES/DISADVANTAGES OF THE

23
23

PRESENT SYSTEM

23

5.1.3 RANKING OF SKILL SETS REQUIRED FOR SALES STAFF BY SUPERVISORS AND SALES STAFF TO SEE WHETHER THEY
MATCH

5.1.4 RECRUITMENT AND SELECTION OF SALES PEOPLE

5.1.5 EFFECTIVENESS OF DIFFERENT TRAINING METHODS FOR SALES STAFF
5.1.6 COMPENSATION STRUCTURE WITH AIM OF FINDING RATIO OF FIXED AND VARIABLE AND EFFECT ON MORALE
5.1.7 METHOD OF PROSPECTING AND REPORTING WITH DEGREE OF SALES FORCE AUTOMATION
5.2 DISTRIBUTION

24
25
26
26
26
26
2

5.2.1 A TYPICAL DAY OF DISTRIBUTION BOYS OR DELIVERY BOYS

28
5.2.2 MARKETING FLOWS CONSIDERED IMPORTANT BY THE CUSTOMERS FOR THE CATEGORY.
29
TRACING THE ROUTE BACK FROM RETAILER TO MANUFACTURER TO DETERMINE LEVELS AND INTENSITY OF DISTRIBUTION
29
5.2.3 TRACE ANY MAJOR CHANGES IN THE DISTRIBUTION POLICIES OVER THE LAST 5 YEARS AND THEIR IMPACT.
30
5.2.4 IDENTIFY AREAS OF VERTICAL AND HORIZONTAL CONFLICT AND POSSIBLE SOLUTIONS.
30
5.2.5 IMPACT OF MODERN RETAIL ON DISTRIBUTION.
30
5.2.6 TRADE MARGINS AND OTHER DISCOUNTS.
31
5.2.7 IMPACT OF INTERNET ON DISTRIBUTION.
31
5.2.8 SUPPLY CHAIN OF THE INDUSTRY
31
5.2.9 LEVEL OF COOPERATIVE ADVERTISING
32
6. REFRENCES

33

7. ANNEXURE

34

3. INTRODUCTION
Newspaper, a publication containing news and other informative articles, is a very prominent part of
print media and entertainment industry. M& E industry consists of many different segments such as
television, print and films. Newspapers have been an important source for gaining information and
latest day-to-day happenings around the world. As per FICCI-KPMG (2014) industry report, M&E
industry grew from INR 821 billion in 2012 to INR 918 billion in 2013, registering an overall growth
of 12.7%.

3.1 Industry growth over the last five years

Over the last five years, M&E industry has been growing. Following bar graph clearly depicts the
growth among all the segments of the industry from 2009-2013.

In INR Billion

M&E Industry Growth

450
400
350
300
250
200
150
100
50
0

2009
2010
2011
2012
2013

Segments of M&E Industry

Print Media Segment growth in India

Print Media, a segment of M&E Industry, includes newspaper and magazines. The revenues earned
through advertising is increasing whereas revenues through circulation of magazines and newspapers
have been decreasing on year-on-year basis but overall growth has been positive due to growth in
advertising . Till 2013, print industry has been of INR 243.1 billion size and overall growth in revenue
has been8.5% in this industry but market share of print industry have been declining.

Revenue Growth of Print Industry

(2008-2013)
300

In INR Billion

250
200
150

Newspaper

100

Magazine
Total

50
0
2008

2009

2010

2011

2012

2013

Years

Decline in market share of print industry

Revenue of Print Industry has been growing for last 5 years but not its market share. Following bar
chart depicts the market share of print industry over last 5 years and indicates that the market share of
print industry has been increasing on year-on-year basis till 2010 but after that slight decrease in
market share has been observed. After 2010 market share for print industry is 28.6% in 2011, 27.3%
in 2012 and 26.4% in 2013.
120
OOH

100

Digital Advertising
80

Gaming
Animation & VFX

60

Music
Radio

40

Films
20

Print
TV

0
2009

2010

2011

2012

2013

3.2 Company and Industry forecast for the next 3 years (2014-2017)
Indian Print Industry Overview

INR Billion

201 2012
2 (growth)

2013

2014
(projected)

Total
advertising
Total
circulation
Total industry
size
Total
newspaper
revenue
Total
magazine
revenue
Total industry
size

2015
(projected)

CAGR
(20122017 17)

2016
(projected)

(projected)

150

11.00%

162

179

200

222

248

10.60%

75

4.00%

79

77

74

72

68

-9.33%

224

7.30%

241

256

274

294

316

6.84%

211

7.60%

228

242

260

281

302

7.19%

13

3.80%

14

14

14

13

14

0.90%

294

316

6.84%

224

7.30%
241
256
274
Table1: Indian Print Industry overview

The compounded annual growth rate of 6.84% for the period 2012-2017 shows that the print
industry have some obstacles in its growth. This is a nominal growth rate which has been
mainly due to growing increase in advertising expenditure. Research from the Marketing
Whitebook 2013-2014 says that non-working people of our country spend more time in the
print media rather than working people. This is highly encouraging fact for the industry.

The Indian print industry can be an exciting venture for business houses. There are distinct
opportunities in the form of next phase growth engines, viz. growth in Tier II, Tier III cities,
growing literacy, growth in Hindi and regional languages, to mention a few.

Print media market (In

INR billion)

2012

2013
(projected)

English Market
Advertising
Circulation
Hindi Market
Advertising
Circulation
Vernacular Market
Advertising
Circulation

86
59
27
68
45
24
69
46
24

90
62
28
75
49
26
76
51
26

2014
(projected)

92
65
27
81
54
27
83
56
27

2015
(projected)

97
68
29
88
60
28
89
62
27

2016
(projected)

100
71
29
95
67
28
99
71
28

CAGR
2017 (2012-17)
(projected)

101
70
30
105
78
27
110
81
29

2.30%
6.00%
2.10%
8.00%
12.00%
2.50%
8.20%
13.30%
5.80%
6

Total industry size

223
241
256
274
Table2: Indian Print Media Market

294

316

8.70%

The higher compounded annual growth rates in the Hindi and Vernacular Markets than the English
Market goes on to reinstate the growing concerns of the major publishing houses of English dailies in
the country. Newspapers like Dainik Jagran and magazines like Matrubhoomi are enjoying a
relatively higher market share and growth in India than their English counterparts.
Hindustan Times Circulation figures:
Year

2010

2011

2012

2013

2014

2015

2016

2017

HT

14

13.5

13.21

11.62

11.43

11.20

10.97

10.75

Circulation
per day(in
lakhs)
Table3: Circulation figures of Hindustan Times in the period 2010-2017
From the sources in Wikipedia and Audit Bureau Circulation website, we have found that the
circulation of Hindustan Times has decreased from around 14 lakhs in 2010 to around 11.62 lakhs in
2013. This comes to be about roughly 6% decrease in the compounded annual growth rate of the
newspaper. Additionally, from the previous table we found that the English newspaper market is
growing at a CAGR of 2.5%. Hence, we have considered the CAGR of the company to decrease at a
rate of around 2% in the coming years i.e. 2014-2017. This way, we reach the figure of 10.75 lakhs of
newspaper circulated per day for Hindustan Times in the year 2017.
India Today Circulation figures:
The circulation figures for India Today stands at 11 lakhs. While digital segment and the number of
mobile registered users are increasing every year in the country, the CAGR in the revenue from
magazine segment has been projected to increase at a very low rate of 0.90%. Hence, going by these
figures, we have assumed the circulation of India Today to decrease at a rate of -1 % per year. Thus
the magazine is expected to reach a circulation figure of around 10.67 lakhs by the year 2017.

3.3 Environmental Scan for Last Two years:

Political Environment
1. The political condition of India was highly uncertain and unstable due to various scams in the
UPA government. Also as it was a coalition government many decisions were pending. But
with BJP winning the LokSabha Elections with full majority we will see some consistency in

the Government policies which will effect the industry as a whole, be it print media or any
other industry.
2. The government has also imposed an FDI cap of 26% on Print Media ( includes newspapers )
affecting limited investments from foreign investors.
Economical Environment
1. Due to global crisis and recession, corporates have controlled their expenditures on
advertising in newspapers. This directly affects the earning of the newspapers as advertising
contributes more than 60% of their income.
2. Although, according to a KPMG report, the advertising revenue is set to touch 80% by 2017.
3. Regional Newspapers have revenue share by advertisement more than hindi or English
newspapers
4. The fortunes of the media industry are linked to the growth of the economy. India is set to
grow at a rate of at least 6-7% in long term. Rising incomes in the hands of people encourage
them to spend more on discretionary items like media and entertainment. However, the trend
is shifting more towards the online medium.
Social Environment
1. Newspapers are seen as for bringing radical change in society. They help form opinions (good
or bad) by their reports and news.
2. Newspaper has helped people bring issues to the front and continue as medium of
information.
3. Sometimes, advertisers give untrue and misleading information. It can take quite a number of
forms like making a claim which it cannot fulfill, publicizing false benefits, use of ambiguous
phrases, etc. This not only effects the image of the company but also of the newspaper as it
publishes such advertisements.
4. India is a home to many languages. Newspapers have to be published in national as well as
regional languages in order to cater to the whole public.
Technological Environment
1. Advent of internet and mobile services like 2G and 3G have greatly impacted newspaper
reading.
2. English Newspapers are threatened more by the rise of digital media than dailies in other
languages as English readers are first to go online

3.4 Identification of major changes in target market profile and consumer

behaviour
The Indian newspaper market is benefitting from growing population as well as literacy levels. Indias
overall literacy level has increased from about 65% in 2001 to 74% in 2011.This continuing
improvement in literacy levels especially among the youth has led to a steady increase in circulation
and readership of newspapers over the past few years.

Newspaper Circulation In
Billions

Changes in Target Market Profile:

30
25
20

English Circulation

15

Hindi Circulation

10

Vernacular Circulation

5
0
2011

2012

2013

CAGR (2011-13)
English Circulation
Hindi Circulation
Vernacular Circulation
Overall Circulation

2.50%
5.73%
7.385
5.05%

As we can see from the graph that our target market profile has shifted from English reading
newspaper to Hindi and regional language reading newspapers .Now newspaper companies are
concentrating more on these papers as their market is growing.
Moreover English Newspaper Publication houses have started going digital as well and people prefer
to read English Papers on their phones and laptops thereby decreasing their circulation.Moreover now
the target market for newspaper industry has shifted towards students and youth whereas five years
back newspaper industry was more oriented towards households .This trend can be shown by
increasing newspaper circulation in schools and colleges.Some other Attributes like Stock market
info, Financial tips, Industry analysis etc will be considered when customers consider specific news
papers like Financial Dailies and so on.
The following changes in consumer behaviour were observed in recent times.
1) The consumers became keen on the trading information, special news, value for money
pricing and opinions while buying/subscribing.
9

2) Customers considering the brand while subscribing/purchasing.

3) Increase in usage of E-Papers on Mobiles and Tablets
4) Households now demanding for variety of newspaper in order to cater to different needs of
the family members.

3.5 SWOT Analysis of Hindustan Times and India Today

Hindustan Times
Strength

High brand recall

Brand loyalty is also very high

Wide coverage especially in

Northern India

Part of a huge media conglomerate

means excellent reach.

India Today

magazines in India.

The magazine has a high brand loyalty

Due to the variety it offers it appeals to a wider

mass of people.

Sunday lifestyle magazine

The magazine enjoys a circulation of

approximately 1.2 million copies and a readership

Has a good pool of supplements

covering education, entertainment,

One of the oldest and the most widely read

of more than 6 million

Covers a variety of issues including news,

science, sports, politics, business and society

Weakness

Limited pan-India presence and

difficult for the magazine to maintain its

penetration as compared to market

leaders

Tough competition as market

stronghold

Being part of a large conglomerate

country

Can use its strong network of

supplements to build on its
readership base

Maximise involvement of people

If the magazine creates popularity in the virtual

and social media space, it will have bright

means they have resources to

expand in other parts of the

The magazine is sometimes criticised for giving

biased reports

share is not growing

Opportunity

Newspapers, news channels, internet have made it

prospects.

The parent company is a media tycoon and has a

strong presence in the Indian media industry.

Through various promotional subscriptions offers

to colleges and offices, the magazine can increase
its circulation.

through online interaction and tieups with institutions and

companies

10

Threats

Increased competition from other

It faces tough competition from the internet,

which is a much cheaper resource.

dailies

On line news medium means

The increase in the number of news and analysis

channels is a threat as the content is pretty much

reduced circulation

the same.

Threat of new entrants is very high

With too many new magazines coming up, it

faces stiff competition.

4. HINDUSTAN TIMES
4.1 SALES ORGANISATION AND TERRITORY DESIGN:
The Process Flow

Printing
Printing takes place at
Noida, from there it goes
in trucks and tempos to
the different distribution
centres.
One such centre is the
Nehru Place one.
At Nehru Place alone, HT
has a daily dispatch of
almost 27,000 copies.
The Supplyments also
reach the nehru Place
centre on time to be
inserted into the
different newspapers

People Involved
The salesman and
different vendors reach
the centre by 5 and the
vendors buy different
newspapres from these
salesman.
A typical hindustan times
salesman negotiates with
the vendors to buy as
many Hindutan
newspapers from him as
possible

Hawkers
The vendors have their
own Manpower who are
called by the name of
hawkers.
These people either
travel on foot or on
cycles
These hawkers have their
respective territories in
which they supply the
newspapers by 7 in the
morning.

Two types of salesman

are present there
Main Salesman
Judy Salesman

There are many distribution centres in Delhi itself. The south Delhi area itself has nearly 25 such
depots. For our analysis we have only taken the Nehru Place depot. Other centres include Moolchand,
Chattarpur, Nizamuddin, Etc.

11

4.1.1 SALES FORCE ORGANIZATION:

Main Salesman
Centre1 Incharge
Judy Salesman
Main Salesman
Centre2 Incharge
Judy Salesman
Main Salesman
Centre3 Incharge
Judy Salesman
AVP

RM

ZM

VP

Main Salesman
AVP

RM

ZM

AVP

RM

ZM

AVP

RM

ZM

Centre4 Incharge
Judy Salesman
Main Salesman
Centre5 Incharge
Judy Salesman
Main Salesman
Centre6 Incharge
Judy Salesman

Printing Press
The printing press prints the required number of papers according to the production schedule.
It takes the content from the editorial team and prints in high capacity advanced press
machine that delivers the product in packaged form.

Transporter
The transporter brings the newspaper from the press to the distribution centers. The trucks are
under contracts with the company. The heavier loads are taken up by trucks and the lower
ones are taken up by tempos.

Distribution Center
The distribution center receives the newspapers from the transporter and stocks it for a short
while before handing it over to the vendors and hawkers who source it from the center. The
payment of the goods is on a daily basis.

12

Vendors and Hawkers

The vendors source their newspapers from the distribution centers and deliver them to the
doorstep of the customers. The vendors are in large scale and employ delivery boys. The
delivery boys have demarcated regions/housing societies, which they serve. Hawkers are
individuals who dont have established customer and sell at roadsides, bus-stands, etc. They
make small quantity purchases.

Main Salesman He is responsible for the sale of no of copies of the Hindustan Times.

Judy Salesman Responsible for combo selling of newspapers as well as supplements and
magazines

Centre Incharge a single centerIncharge has 4 people reporting to him. These 4 people take
care of the needs of the salesman present at each center.

Advantages

Travel Time Limited

Salesman close to the customers

Reduced conflict among the customers as territories are clearly defined

Recruitment can be conducted as per demand of the job

Disadvantages

No one to one interaction with the customers by sales people

People are high newspaper loyal and to change that hawkers cannot be of any use.

4.1.2

RANKING OF SKILL SETS REQUIRED BY THE SUPERVISOR FOR THE SALES

STAFF:
Supervisor is Zonal Head for Hindustan Times who is responsible for handling the sales team. The
zonal head is responsible for keeping the track of the accounts specifically expired copies that come
back from different vendors. The skill set looked for in the team by supervisor include:

Strong Analytical Skills The supervisor role involves a lot of calculations such as for sales
figures that he receives from his sales team. His role includes identification of gaps in sales.
The gap identification, designing of strategies accordingly to fill those gaps demand strong
analytical skills.

Good communicator Within the sales team, sales begin with communication to sales
representatives about their targets to achieve within a stipulated time period. This message
has to be conveyed to team and for that good communication skills are very important.

Enthusiasm Supervisor has to be very competitive because this newspaper industry is

becoming very-very competitive. It is mandatory for supervisors to be well aware and up-to-

13

date with competitors information and their activities. Thus motivation and enthusiasm is
important to have edge overs competitors.
Next to zonal head are C.I. who are responsible for handling and supervising the sales team directly,
vendors. They are also responsible for keeping a check on the number of copies supplied and total
distribution in whole. Thus the skill set required by C.I. are

Negotiation Skills C.I. has to deal with vendors and dealing involves discussions over
prices at which they will buy the newspaper from the company. These discussions related to
prices demand negotiation skills as it is possible that if the discussions does not end in
constructive manner it may end up with vendor not buying the newspaper and procuring it
from the competitors.

Persuasive - The C. I. needs to be empathetic along with business acumen to make such
decisions keeping in mind the long-term implications on the relationships.

Strict and Compliant Oriented This skill is required because newspaper selling job
involves daily operation of distribution in timely manner and for that the responsible person
has to be strict and disciplined.

4.1.3 RECRUITMENT AND SELECTION

Only according to the requirements and conditions of the company and the industry, the
recruitment as well as selection process is carried out at Hindustan Times. Surprisingly, very
often certain internal references are also considered at times while selecting new sales people
in the organization.
4.1.4 EFFECTIVENESS OF DIFFERENT TRAINING METHODS FOR SALES STAFF:
Training
Training of new sales representatives begins with 1-2 weeks of orientation of the company and
product specific training which includes training them on the strategies, products offered etc.

It includes practical learning through role play, customer handling, customer satisfaction and
selling of products

The next 1-month is spent with experienced sales reps on fields.

Then they are put on personal sales calls.

After every 6 months or so training is provided so as to keep them updated as per changing
environment.

Topics discussed during the training are the problems faced during selling, counter arguments,
tackling a special situation, how to handle a client through its nature, motivation enhancement, etc.

The zonal manager is given one month of on the job training at the beginning of his role as zonal
manager.
14

Company also has in place a management trainee programme, whereby graduates from the top
Business Schools of India are hired and put through rigorous training for a year in sales and
circulation in up-country location.

The aim of the program is to evolve the youngsters into strong leaders with the capacity and
willingness to take on greater responsibilities faster.

HT Media has also implemented a world-class Customer Relationship Management (CRM)

solution to provide its sales force with a platform to improve productivity and reduce time
consumption on administrative tasks.

Effectiveness of Training
1.

Training helps in understanding of issues that sales people face in real time.

2.

Regular training keeps helps them adapt to changing environment.

3.

It not only keeps employee morale high, but also helps in improving productivity and efficiency.

4.

As Hindustan time demand is very high, training helps the sales representatives to choose the
vendors such that it will lead to better circulation.

5.

CRM will enable the staff to spend more time in the field, engaging with customers, thus
improving customer connect.

4.1.5 COMPENSATION STRUCTURE WITH AIM OF FINDING RATIO OF FIXED AND

VARIABLE AND EFFECT ON MORALE:
Their packages are also based on the industry norms. Usually at lower level the approx ratio of Fixed to
Variable salary is 90:10 but as a person proceeds to higher levels the variable part increases. Sales team is
motivated by various incentive schemes which is not a part of CTC (Cost to Company). The appraisal or
promotion is based on your performance and rapport with your boss.

The following table shows the compensation structure for Hindustan Times:

Income

SalesMan

C.I.

Zonal

Basic

4500

11250

15000

House Rent Allowance

1200

3500

Leave Travel Concession

300

600

800

Medical

200

300

400

Vehicle Maintenance

200

200

200

Bonus

800

1200

1600

Provident Fund

500

750

1000

Speciality Pay or Allowance

500

750

Fixed Income

4500

1000

15

Special Promotion Expenses

1000

TOTAL ( A )

8200

18550

Variable Income

Ratio ( 90:10 )

Ratio ( 70 : 30 )

Target Based

911.1

7950.0

SUM

9111

26500

25500
Ratio ( 60 : 40 )
17000.0
42500

The compensation structure is based according to the performance. The performance is reflected in
the number of newspaper sold. Thus it can be seen that the compensation structure is very competitive
in nature. This can be understood from the very nature of the industry which is highly competitive.
4.1.6 METHOD OF PROSPECTING AND REPORTING WITH THE DEGREE OF SALES FORCE
AUTOMATION:
Method of prospecting:
This is the stage to find potential customers. Newspapers customers could be IT employees, financial
institutes, students etc.
Prospecting is done by considering the following points:

Demographics of the region

Competitors customers

Identifying gaps

Both push and pull strategies are adopted by the company to increase the sales of the newspaper
Main problem faced after identifying prospect is from Gatekeepers, when a company or offices were
approached for subscription the gatekeepers who are generally receptionist and security guard who
actually does not possess any authority to buy the paper can pose a challenge to final sale from
happening
Reporting is done by following methods on continuous basis:

SMS(major)

Telephonic

Emails

16

4.2 DISTRIBUTION
In newspapers, HT, the distribution system for local (Delhi area) and up-country (Outside Delhi area)
is different.
4.2.1 Marketing flows considered important by the customers for the category
Marketing Flows for up-country distribution (in case of local, level of marketing flows is from
manufacturer to dealer directly):

Ownership

Ownership

Promotion
Risking
Ordering

Risking

Ordering

Payment
Payment

DEALER (HAWKERS/ VENDORS)

Possession

DISTRIBUTOR

MANUFACTURER

Possession

Possession: The printing press loads the newspaper onto the transporter. The transporter unloads the
newspaper at the distribution centre. Thus the physical possession is passed onto the distribution centre. The
distribution centre then breaks the product volume into batches and finally passes onto the dealer, who finally
takes the physical possession of the goods. The dealers (vendors/hawkers) finally sell to the end customer.

Ownership: At each stage of the value chain the ownership is passed to the next in the value chain. The
newspaper agency sells the paper to the distributors, the distributor to the dealers and the dealers to the end
customers. In newspaper the inventory carrying cost is low because of the very high perishable nature of the
goods. The newspaper almost reduces all its value by 10:00 clock in the morning.

Risking: Due to the high perishable nature of the goods the risk associated with the newspaper is very high
with each of the stages in the value chain. Time is the essence in this business. Risk is transferred to the next
in the value chain through transfer of ownership. The risk is borne by each in the value chain. The newspaper
agency bears the risk of delay in delivery of the newspaper and thus results in return of the goods. The
distributor bears the risk of damaged goods. Similar risk is borne by the vendors though they dont bear the
inventory carrying cost. This is because the vendors return the unsold newspapers to the news agency. The
hawker cannot do that so he/she bear the additional risk of unsold newspapers.

17

Promotion: The dealers dont play a part in promoting the newspaper to the final customer. They dont push
the newspaper. The promotional activities are solely the responsibility of the newspaper. The newspaper
promotes itself through advertisements and creates a pull for its products. The demand is generated on the
basis of the pull.
Financing: Transporters follow contractual terms and condition. Distributors have fixed salaries and no
margins. No credit is allowed usually to vendors/ hawkers but can be given based on the relationship of them
with distributor.
4.2.2 Route back from retailer to manufacturer to determine levels and intensity of
distribution
Route from manufacturer to retailer
1. Manufacturer/ Printing Press: At the manufacturer end, the printing work for Hindustan
Times takes place at Greater Noida and Noida and completes by 12 midnight except the front
page that is left for any major/ breaking news to be printed on the front. Thus the printing
work is completed by around 2-2.30 am.
2. Transporter: As a next step after printing, loading of newspapers in bundles (1 bundle = 80
copies) begins onto trucks/tempos in between 3-4 am. The trucks are under contract with the
company. The drivers of trucks/tempos collect the challan while leaving the press that
contains information about destination and the no. of copies to be supplied. The schedule of
departure of trucks/ tempos depends upon the distance to be travelled i.e. for longer distance,
trucks leave early.
3. Distribution Centre: The trucks/ tempos arrive at the destined depot for delivery of the
newspapers at around 5 A.M. in the morning. The Distribution Centre at depot is responsible
for collecting the delivery according to the challan. In case of local distribution, newspaper
is given to hawkers by Centre Manager of HT who collects the money from hawkers based on
the purchase made by the hawkers on daily basis. There are around 40 registered hawkers
with HT for BerSarai Depot. Whereas in case of up-country distribution, newspapers are
delivered to distributors by delivery van/ truck enroute from Noida press to a particular
destination e.g. Dehradun. So the delivery van will be giving newspapers to all distributors,
catering their respective areas, on the way to Dehradun.
In New Delhi, there are 58 depots where HT is circulated. We covered BerSarai depot for our project.
At BerSarai depot, around 4000 copies (50 bundles) of newspaper are circulated. Following is the
language wise break up of newspaper copies at Ber Sarai:
S.No. Newspaper Circulation

No. of Copies

English Newspaper

1400

English + Hindi Newspaper

1000
18

English + Mint (Business Newspaper)

400

Hindi + HT Age

1300

TOTAL

4100

4. The centre manager is responsible for all the activities taking place at the local depot.
Whereas in case of upcountry distribution, the distributor who is the salaried person with the
company gives the copies to hawkers, records the number of copies given to hawkers on daily
basis on a piece of paper and collects the payment from them.
5. Hawkers/ Vendors: Finally the hawkers load their respective copies on their vehicles to
deliver the newspapers at the doors at around 7 A.M. in the morning.
Major changes in distribution policy in last 5 years:
The distribution of HT has seen a few changes in last 5 years because of changing trends in
newspaper reading among the youth of the country. Youth nowadays prefer to read newspapers online
or on social sites and as a result the growth in sales of newspapers has declined over the years which
have impacted the distribution policies.
Now the margins given to hawkers/ vendors have reduced and very few schemes are provided to
customers as well because the profit margin of the company is squeezing. The distributor is now
hesitant in giving credit to hawkers/ vendors (in case of long term relationships as well) and try to get
payment on daily basis.
4.2.3 Identify areas of vertical and horizontal conflict and possible solutions
Horizontal Conflicts
1. Conflict among vendors: The service area i.e. the area of distribution of newspaper is solely
decided by the vendor as well as the number of copies to be distributed because HT does not
make decisions related to the territories that are to be covered by specific vendors as well as
the targets in terms of number of newspaper to be sold. This leads to the conflicts among the
vendors over particular area to be covered.
2. Payment related issues: Though the vendors are required to make payments on daily day-today basis for purchasing the newspaper but sometimes they purchase the newspaper on credit
basis from the distributor and creates problems to the distributor when vendors do not make
timely payments.
3. Issues related to number of copies: Sometimes there are issues related to number of copies
given to the hawkers that can be less as the counting mistakes can happen during distribution
of newspaper to them

19

According to centre manager of HT newspapers are always machine counted in a bundle so

there is no scope of error on distributors part.
Vertical Conflicts
In this industry, newspapers are highly perishable in nature because time holds prime importance in
this business. The newspaper has to be delivered to the end customer in the timely manner else any
delay in the delivery of the newspaper may lead to loss of relevance it beholds. Thus majority of the
issues are related to timely delivery starting from the transporter (trucks/ tempos) to depot and then
the distribution of newspapers to the hawkers/ vendors and finally to the end customers. Any delay
from any of the stakeholder during the distribution process creates conflicts.
4.2.4 Impact of modern retail on distribution
There is no major impact of modern retail on newspaper circulation. Circulation is done mainly
through delivery boys for both retail as well as institutional sales. Apart from it newspapers are sold
on roadside by hawkers. Nowadays newspaper is also being sold at large stationery shops where they
are kept along with magazines and other subscriptions.
4.2.5 Trade margins and other discounts
1. The distributors at all the depots are the salaried employees of HT.
2. The vendors/ hawkers earn 30% margin on the newspaper sales e.g. If the newspaper costs
Rs. 3 per copy then the hawker would be earning 30% margin i.e. 90 paisa per copy.
3. Vendors are free to put local inserts and advertisement pamphlets in the newspaper. On an
average 20 paisa per newspaper are paid for inserting pamphlets. So if a vendor sells more
copies he/she can increase his earnings from the newspaper as well as from inserting
advertising pamphlets in the newspapers.
4. The newspaper also gives promotional offer to institutes and organization which buy
newspaper in a bulk deal. For example IMI, IIFT gets promotional offers from the paper on
bulk deals. Eg. 9 months delivery of HT for Rs. 499.00 or HT + Mint for Rs. 799 for a period
of 9 months.
5. Other discounts are passed on to the end customers by giving schemes in the form of
subscriptions on half-yearly or yearly basis. The payment is collected at one time from the
customer in case of subscriptions.
6. Return policy: For local depots, hawkers can return only 2% of their newspapers purchased
earlier if left unsold and HT adjusts the money for the same in the next purchase. For
upcountry depots also, only 2% of unsold paper can be returned back to the company. Instead
of asking for complete copy of unsold paper, HT asks only for the header of front page and
returns back a certain percentage of money to the distributor.

20

4.2.6 Impact of internet on distribution

Emergence of internet has widened up the options for readers to fetch the information and so is the
case with newspaper industry as well. Now customers have an easy and readily available option to
read the news in case they do not have time to flip through the hard copy of newspaper or they do not
receive their newspaper copy on a particular day. In such a scenario the onus lies on the newspaper
company such as HT to ensure that their distribution channel is efficient enough to keep their readers
intact to read the news through their copy only and not allowing them to switch to competitors
newspaper by ensuring the timely delivery of newspaper. All the stakeholders involved in the
distribution channel have to coordinate and synchronize their moves with each other so that the
newspaper is delivered to the reader at the required time.
4.2.7 Supply chain of the industry
The supply chain begins from suppliers who deliver paper and ink to the printing press. The printing
work then takes place at Noida and Greater Noida. The printing press prints the required number of
papers according to the production schedule. It takes the content from the editorial team and prints in
high capacity advanced press machine that delivers the product in packaged form.
The transporter brings the newspaper from the press to the distribution centers. The trucks are under
contracts with the company. The capacity of each truck is around 30,000 to 35,000 newspapers and for
tempos it is generally 10000 newspapers. Transporters follow contractual terms and condition. They
are paid on per kilometer basis. They adhere to strict time schedules and penalties are imposed based
on the delay in delivery to the distribution centres.
The distribution center receives the newspapers from the transporter and stocks it for a short while
before handing it over to the vendors and hawkers. Vendors buy a fixed, large amount of newspaper
daily and pay in cash in day-to-day basis. Any papers that remain unsold are sent back to Hindustan
Times.
The vendors source their newspapers from the distribution centers and deliver them to the doorstep of
the customers. The vendors are in large scale and employ delivery boys. The delivery boys have
demarcated regions/housing societies, which they serve. Hawkers are individuals who dont have
established customer and sell at roadsides, bus-stands, etc. They make small quantity purchases.
4.2.8 Level of cooperative advertising
Cooperative advertising provides HT the ability to reach a wider audience to promote themselves
through partnerships with distributors in case of upcountry distribution whereas in local distribution
company does it on their own. It shares the costs for advertisement between with the distributor based
on certain agreed terms and conditions.

21

4.2.9 Daily Schedule of the Centre Manager (The Executive)

The day of the centre manager begins:
1. At the depot that requires overall supervision of activities taking place right from arrival of the
newspaper bundles, distribution of copies to the hawkers and timely collection of the money from
hawkers. He is also responsible for untoward activity at the depot.
2. The activity at depot beings at around 4:30- 5 a.m. and goes on till 7:30- 8 a.m. in the morning.
Following this, the executive goes home to take rest and refresh himself.
3. After a couple of hours of break, he has to visit the cash sale points, check for displays, meet the
vendors, listens to the complaints of the vendors and addresses them.
4. He also meets the readers to convince them to buy subscriptions of the newspapers and avail ongoing schemes offered by the company to make new readers.
5. He does not visit the office on daily basis as it is not required.

22

5. INDIA TODAY
5.1 SALES
5.1.1 Organisation and Sales structure
India Today
Group

TUTN

LMI

TP

Publishers(2)

LSG

VVST

Distribution

Direct To Sales

M-Mon

Internal

Susbtitutions

External

Advertisements

Books

IMT

Children books

RD

Fictions

Music

Fig 1.1 Organizational and Sales Structure

We will majorly focus on the sales and distribution of India Today. The reasons why we have added
distribution is that India today has an internal Division of sales and Distribution. Its Distribution
network is provided as a platform for its own publishing and also other publishers. We will majorly
discuss the different strategies taken care of by the internal magazine publishing.
5.1.2 Sales organisation and territory design. Please review the
advantages/disadvantages of the present system

The territorial design is discussed as follows

23

Tier 1 12 cities (major cities like Delhi, Mumbai, Kolkata etc)

Tier 2 30-40 Cities ( important cities like Lucknow, etc.)

Tier 3 Remaining (other areas like Muradnagar, Rajnagara etc.)

Fig 1.2 Territory Design

5.1.3 Ranking of skill sets required for sales staff by supervisors and sales staff to see
whether they match
Delivery boys

Basic math ,

With plus two/graduate

Collection and maintain rescheduling list

ASM
24

MBA graduates, to do basic analysis and data interpretation.

Prime loading list(PLL) is prepared by ASM

With 3-5 years of experience ASM

3-5 years of experience as SM

SM

RM

NSM
o

3-5 years of experience as RM

Skill looked for while recruiting and selections:

1.

Lets do it Attitude

2.

Good listeners

3.

Able to perceive what a client truly wants

4.

Persistent

5.

Trustworthy and honest

5.1.4 Recruitment and selection of sales people

Recruitment of talented sales people is an essential part of any company's ability to maintain success
and ensure the achievement of standards.
Candidates are chosen internally or externally.

Internal recruitment is an effective method of recruiting potential employees, as it uses the

existing company resources and talent pool to fill needs.

External recruitment is to create diversity and bring fresh thinking

External recruitment - Steps in Selecting Quality Candidates

Screening of the qualified applicant base, by the manager is to identify the applicants with the
highest potential for success basis the relevant criteria.

Evaluation is based on the culture fit, attitude, technical skills and competencies. However,
attitude is a very important criterion for hiring.

One-on-one interview followed by overall ranking of all who appeared for an interview basis
their performance.

Ultimately they will hire the ones who have the necessary skills, great attitude and best fit the
company culture and ethos.

25

5.1.5 Effectiveness of different training methods for sales staff

Depending on the requirement of the team we offer training. Both external and internal
trainers are used.

They have a shadow program where employees are made to shadow a colleague for 15 days
and see how effective he is.

Feedback is shared both ways

Effectiveness training is not much. Distribution cover the major aspects and sales person need
to deliver the magazines.

Ongoing training and training whenever new magazines are introduced.

5.1.6 Compensation structure with aim of finding ratio of fixed and variable and effect on
morale
Variable/Incentive compensation is used as a strategic lever to drive the results the business
needs and to reward those who are performing at the top of their game.

Essentially, the incentive compensation has acted as a morale booster for the employees and
they could create a preferred destination for top performers

5.1.7 Method of prospecting and reporting with degree of sales force automation
Sales through subscription and delivery boys are predicted that is INDIA TODAY using push
strategy

Sales through Retail is based on analysing previous data through pull strategy

Distributors were given a target and if they cannot achieve they need to prospect new retail
shops through which they can sell required target

There is no prospecting for subscription and magazines supplied by morning vendors

Established agency channels

Industry Events and Case Studies

In process of implementing the SAP

5.2 DISTRIBUTION
Before going into detailed questions on this segment let us first understand the background of
distribution in India Today. India Todays Distributon has been divide into 3 channels. Out of these
the company understands the majority of the sales is through the retail channel. The percentages are
mentioned in the given distribution structure below. The percentages refer to the sales taking place.

26

Channels

Morning
Vendors(post
piad) (10%-40%)

Retail( 40%-80%)

News Stand

Patri

Subscription(pre
paid)(10%-20%)

Transport store

Airline

Modern retail

Bustand

Railway station

Crossworld

Landmark

Oxford

Spencer

Fig 2.1 Distribution of Magazines

In magazine retail contribute to maximum sales

Morning vendors supply to institutional customers like hotels , offices along with other news
papers

Further classification based on kind of customer visiting a shop:

If customers visiting store belong to SEC A then store is classified as Category A.

If customers visiting store belong to SEC B then store is classified as Category B

If customers visiting store belong to SEC C then store is classified as Category C
EX : A newsstands in HauzKhas can be classified as Category A if profile of customers
visiting is high, similarly newsstand near to Category A can be classified as Category B or C
depending on type of customers visiting
Category A for one Magazine can be Category B store for other magazine and vise-versa
Prime Loading List (PLL) is done on basis of classification of store

Store
classification

Category A

NewsStand In
Hauzkhas

Modern Retails

Category B

Stores at
Railway station

Newsstand in
Sarojini Nagar

Category C

Stores at Bus
Stops

News stand in
palika bazaar

Stores at
Airport

Fig 2.2 Classification of Stores

27

Types of magazines India Today sells

Weekly 52

Fortnightly (consider 14 days) 26

Two Days a week (5th and 20th day) 24

Monthly 12

Bi-Monthly 6

Quarterly 4

Annually 1

When we calculate accordingly, 4 magazines are new issues per day across the country This further
gives us many key observations.

The distribution flow is very strong

No stocks are kept by anyone except a very few by the retailers.

Payments are taken care of daily by the front end distributor guys.

Key points when we look at the sales and Distribution parts together.

A typical ASM creates the Primary Loading List

PLL: It consists of which store, which magazine and the no of issues being sold in that store
taken together and according to that further magazine are ordered to be printed

This is based on the forecasting of the previous selling sequence of the respective retailers

5.2.1 A typical day of Distribution Boys or Delivery boys

The delivery boys are the guys who deliver the bulk to the retailers on cash basis.

Rescheduling task of the delivery boys is explained below

o

Suppose a single delivery boy is taking care of 4 stores in an area

Initially according to PLC each store has been predicted a sales of 5 copies.

The delivery boys puts 5 copies each in the 4 stores allocated to him
Stores
No of
copies

Store
1
5

Store
2
5

Store
3
5

Store
4
5

During the first 2 hours the copies sold and left are given below
Stores
No of

Store
1
0

Store
2
3

Store
3
2

Store
4
5
28

copies
o
o

No the delivery boy has to take few copies from store 4 to store 1 in the next 24 min.
Condition after the copies of store 4 transferred to store 1
Stores
No of
copies

Store
1
3

Store
2
3

Store
3
2

Store
4
2

This keeps on going the whole day. The delivery boy has to run around the stores
looking for left copies and deliver it to where its scarce

Based on this the next days PLC is further decided by the ASM

For this example a typical next days PLC would include the following forecasting
Stores
No of
copies

Store
1
8

Store
2
6

Store
3
4

Store
4
2

The cash is collected from the retailers at the end of the day according to the no of purchases.

The remaining copies are sent back to the company.

5.2.2 Marketing flows considered important by the customers for the category.

Cash is settle between vertical channels or credit can be given based on different
locations

Ownership and risk in channel is with the person who possess magazines

If the Magazines are not sold for 30 days it will follow same channel back to
publishers and cashis settled immediately or will be adjusted in next delivery by
company in full that is company will give full amount back.

Tracing the route back from retailer to manufacturer to determine levels and
intensity of distribution

29

Fig 2.3 - Route

5.2.3 Trace any major changes in the distribution policies over the last 5 years and their
impact.
Last major policy change took place 12 years ago.

Policy change was to distribute other publisher magazines also

The decision to give platforms to books was also taken

Impact:
o

By giving platforms to others, it helped India Today to establish Monopoly in

Distribution of Magazines

By diversifying into books, it helped them create a new revenue generating division.

5.2.4 Identify areas of vertical and horizontal conflict and possible solutions.
NO conflict: Reasons

Well-defined margins

India Today are the market leaders

Major other competitors use India Todays Platform for their distribution

Selling or non-selling of any magazine is due to content, thus conflicts do not arise

5.2.5 Impact of modern retail on distribution.

o

No impact of modern retail.

India today are promoting modern retail and they are pushing it.
30

A separate ASM is allocated to Modern Retail

ASM for modern retail will take care of billing only, distribution is taken care by other
ASMs who look after distribution of Retail

5.2.6 Trade margins and other discounts.

Fig 2.4 - Margins

NO discounts are provided. In this industry there wont be any discounts or offers provided by retailer
5.2.7 Impact of internet on distribution.

Not much impact on magazines distribution.

Publishers are using it to get better awareness of magazines

Internet is mainly used for subscriptions

Cost Perspective- Even though the cost of sending an email is way lower than keeping a
salesperson, but the getting the person to whom to send the email has a much higher cost.

5.2.8 Supply chain of the industry

Here we discuss the supply Chain of only India Today. Even its competitors use India Todays
platform for their distribution. The conflict is content based thus having no channel conflict.
This structure is bases on the structure of two well know international magazine companies.

31

Publisher

Railways
Roadways
Airways
Company owned Trucks

India today
Offices

present in 1200 cities

1200 distributors ,each for a city
Distributors collect Magzines from
India today centers

Distributors

will supply to wholesaler/sub

distributors, who will suply to retail or
morning vendors then to customers
Directly to Morning Vendors

Morning
vendors/Retail

Customers

Fig 2.5 - Supply Chain

5.2.9 Level of cooperative advertising

Advertising costs, discounts, gifts etc... Were borne by company itself.

There is no involvement of others in cooperative advertising
The no of copies required and primary loading list (PLL) are prepared by ASM in
company itself
Duty of distributor is to distribute copies according to PLL list in his territory
Advertising of India Today is mainly done through
o

Direct mailing

Social Media

Ambient Medi

32

6. REFRENCES
1. http://indiatoday.intoday.in
2. http://www.hindustantimes.com
3. http://www.htmedia.in/brandPage_hindustan.aspx?Page=Page-HTMedia-hindustantimescom
4. Source of HT information: Kumar Vikram, Deputy Manager, HT Media Ltd.
5. Source of India Today information: Deepak Bhatt, General Manager National Sales, India
Today, Noida.

33

7. Annexure

Image1: BerSarai Depot for Hindustan Times

Image2: Insertion of pamphlets

Image3: Loading of newspaper on vehicles

34