New Delhi: One of these days, while having your morning cuppa, don't start if your favourite broadsheet daily greets you with her vernacular cousin in tow.
Publication majors, in their search for growth triggers, have hit upon the fast-moving consumer goods-patented formula of 'buy one, get two'. Ever since June this year, many leading lights of the industry have launched combo economy packs in quick succession.
The proposition is to push in the vernacular edition together with the widely read English flagship. So, at a mere Rs 75 a month, one may have The Times of India (TOI) in conjunction with Navbharat Times (NBT) or Hindustan Times (HT) with Hindi Hindustan (HH). This August has seen slight variants being launched too.
For your intellectual palate you may opt for combo in business flavour - like ToI with The Economic Times (ET). All this at the same magic price point of Rs 75 per month. This trend seems to be very hot and happening for the marketing clubs within these publications, as a commoditised viewpoint is currently in circulation. The bundling of the flagship with the economic daily makes sense and packs a punch to some readers but the other one is grossly off mark.
What the editorial and management boards need to ponder is whether such 'package deals' really work for a neural offering like a newspaper. No, is the answer. A study of newspaper reading households in Delhi, conducted by a group of management students way back in 1994, is worth mentioning here. It was a time when the two biggies, ToI and HT, were engaged in a fierce price war called 'the invitation price' battle.
If one sold at Rs 1.25 the other bettered it with a Re 1 offer despite the trade crying murder at the dwindling distribution margins. Many claims and counterclaims were advertised about who the real market leader was and who was the benefactor of the readers and protected the consumer's wallet.
The survey revealed two important learning 'takeaways'. One, that newspaper reading is a matter of habit and habits are hard to break. A slight drop in price does not endear the other newspaper - more or less newspaper demand is price inelastic. Thus, the habit factor retains 80 per cent of the patrons for any news daily.
Secondly, the floating readers are inherently disloyal and are prone to experiment with any new entry on the block. After these insights, coming back to the combo offers, wherein the pricing tool has been used again: albeit in a new avatar - the efficacy of the strategy looks diminished.
Now taking a cue from consumer behaviour the big question to ask is: does 'reader profiling' suggests that an English reading household will embrace a Hindi daily to actually read it or vice versa, a Hindi reading patron transform into an English reading public? No. So what do they do with the extra paper? Many high-profile and affluent readers, hitherto single newspaper subscribers (mostly English), in all likelihood will give the vernacular daily to their drivers, cooks, butlers or any other person attending on them.
Similarly, a vernacular news daily subscribing household will have little motivation to buy and read an English daily. The same may either be given away as lunch wrapper for children, spread on as rack-liners or used for other such innovations.
Newspaper vendors are cheeky enough to advise us that the combo offer will offset our investment by the raddi value they will generate. Going by this logic, the additional newspaper is merely taken for fat recycling/scrap revenue.
Media planners need to guard against the hardsell of circulation-driven ad tariffs. The bang for the ad buck might be watered down to a large extent as the right audience might not be reached after all. Says Grey Worldwide senior vice-president Ashutosh Khanna: "Am I paying for a larger reading population or a more relevant reading population?"
Households subscribing two dailies from different publications or even the same group will benefit from the savings but in the latter case the intended circulation increase does not happen. Worse, the revenue takes a hit.
Have a rethink, venerable publications.