“NEWSPAPER PRICING MODEL: IT’S IMPACT ON READER’S 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 Newspaper Pricing Model: It’s impact on Reader’s Choice Page 1
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“NEWSPAPER PRICING MODEL: IT’S IMPACT ON READER’S 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: It’s impact on Reader’s Choice Page 1
DECLARATION
The study on “NEWSPAPER PRICING MODEL: IT’S IMPACT ON READER’S
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
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 2
ABSTRACTThe 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
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 3
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
Conclusion…………………………………………………………………47
Limitation and Future scope of study…………………………………....48
References……………………………………………………………….....49
Appendix…………………………………………………………………..50
Questionnaire ………………………………………………………………………..50
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 4
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:
S e t P r i c i n g O b j e c t i v e
E s t i m a t e D e m a n d
E s t i m a t e C o s t s
A n a l y z e C o m p e t i t o r s ’ P r i c e s
S e l e c t P r i c i n g P o l i c y / M e t h o d
S e t F i n a l P r i c e
A diagram of different pricing strategies:-
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 5
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.
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 6
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
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 21
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
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 22
RESULT
Data Analysis (Hypotheses Testing)
Which newspapers do you buy?
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 23
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.
24%
66%
10%
only Eniglish English & Bengali Others
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?
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 24
The next thing was how they buy their newspaper. The mode of buying news paper differs
according to their preferences.
24%
74%
2%Stand-alone-pricing Subcription pricing Any others way
According to the response I got this statistics:-
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?
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 25
After they buy the newspaper, are they really satisfied with the quality of the newspaper they
read.
14%
80%
6%
Very dissatisfied Dissatisfied Neutral Satisfied Very satisfied
According to the response I got this statistics:-
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.
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 26
4%22%
63%
12%
Very dissatisfiedDissatisfiedNeutralSatisfiedVery satisfied
According to the response I got this statistics:-
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.
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 27
4%
72%
14%10%
Very dissatisfiedDissatisfiedNeutralSatisfiedVery satisfied
According to the response I got this statistics:-
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?
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 28
When I asked them, if they will continue reading their current newspaper if price is increased by
25%,
88%
12%
YesNo
According to the response I got this statistics:-
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 reading your existing newspaper?
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 29
When I asked them, if they will continue reading their current newspaper if price is increased by
50%,
36%
62%
2%
YesNoIndifferent
According to the response I got this statistics:-
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.
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 30
44%
52%
4%
EnglishBengaliIndifferent
According to the response I got this statistics:-
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
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 31
eng
& b
en eng
othe
rs
Sub
stan
d
othe
rs
satis
fied
nutr
al
very
satia
sfied
satis
fied
nutr
al
very
satia
sfied
diss
atisfi
ed
satis
fied
nutr
al
very
satia
sfied
diss
atisfi
ed yes
no yes
no
Indi
ffere
nt
Drop
eng
drop
ben
g
Indi
ffere
nt
News paper Mode Quality price Service 25% incrsd
50%incrsd Droping
0
5
10
15
20
25
21
4
1
19
7
0
21
32
18
5
21
17
4 4
1
22
45
21
0
15
11
0
9
4
2
11
3
1
11
3
1
7
43
1
11
3
10
14
1
10
5
0
6
8
112
1
3
10
3
10
3
10 0
3
0 01
3
1 1
3
01
21
2 21
4
10
5
0 0
4
10 0
5
0 0 0
5
0
2 21
0
5
0
5000-2500025100-4500045100-6500065100 & Above
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.
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 32
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:
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 33
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.
3 consumer say yes and 1 consumer say no when the price is increased for the income
group C.
5 consumer say yes when the price is increased for the income group D.
By 50% price increase:
5 consumer say yes and 21 consumer say no when the price is increased for the income
group A.
10 consumer say yes and 5 consumer say no when the price is increased for the income
group B.
1 consumer say yes and 3 consumer say no when the price is increased for the income
group C.
2 consumer say yes and 2 consumer say no when the price is increased for the income
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.
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 34
According to the prefference of Female consumers the following data has been obtained:
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 35
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.
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 36
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:
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 37
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.
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 38
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
SATQa
Enter
a. All requested variables entered.
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 39
b. Dependent variable: S150
Model summary
Model R R square Adjusted R Square
Std error of the estimate
1 .148a .022 -.020 .5398
a. Predictors: (Constant),SATS,SATQ
Anovab
Model Sum of Squars df Mean Square F Sig.
1 Regression
Residual
Total
.305
13.695
14.000
2
47
49
.152
.291
.523 .596a
a. Predictors: : (Constant),SATS,SATQ
b. Dependent variable: S150
Coefficientsa
Model Unstandardized Coefficients Standardized
Coeffic
ient
t Sig.
B Std. Error Beta
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 40
1 (Constant)
SATQ
SATS
2.009
2.831E-02
-.134
.706
.197
.140
.024
-.157
2.846
.143
-.958
.007
.887
.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.
b. Dependent variable: S150
Model summary
Model R R square Adjusted R Square
Std error of the estimate
1 .183a .034 .013 .5294
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 41
a. Predictors: (Constant),SATS,SATQ
Anovab
Model Sum of Squars df Mean Square F Sig.
1 Regression
Residual
Total
.458
13.175
13.633
1
47
48
.458
.280
1.634 .207a
a. Predictors: : (Constant),SEX
b. Dependent variable: S150
Coefficientsa
Model Unstandardized Coefficients Standardized
Coeffic
ient
t Sig.
B Std. Error Beta
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 42
1 (Constant)
SEX
1.886
-.210
.227
.164 -.183
8.299
-1.278
.000
.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.
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 43
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.
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 44
In the income range B (25100-45000) category are middle level executives don’t 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 consumer’s 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 consumer’s 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.
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 45
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 reader’s 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
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 46
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.
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 47
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
Newspaper Pricing Model: It’s impact on Reader’s Choice Page 48