Sales and Distribution Management in Newspaper Industry


By

Vibhash Gaurav
Lakshmi Narsimhan
Students (2006-08 Batch)
ICFAI Business School
Hyderabad
 


The selling process

The selling process of newspapers in India involves various steps like:

1. Prospecting and Evaluation:

This is the stage where potential customers are found and evaluated. It is first necessary to identify that the potential customer has the willingness, ability and authority to buy the product. This would involve first generating sales leads. In the case of newspapers   customers could be Financial Institutions, IT employees, students preparing for their CAT examination MBA students and other institutions like Hotels, Airlines etc. Most of the times when a company or offices are approached with subscription offer the gatekeepers are encountered who are actually the receptionists and security guards and they don't have the authority to buy the paper but pose a challenge to the final sale from happening.

2. Pre approach:

In this stage the process of approaching the client is decided. This involves deciding on the approach establishing objectives of the sales call and preparing for a presentation. We need to analyze what are the product features in which the customer will be interested and focus on those during the presentation.

This stage involves deciding whether it will be enough to do a simple cold call or to set up an appointment which is needed in case we want to set up a stall. Like in the case of setting up stalls in IT companies where a larger section of our targeted population can be met it becomes essential that we first fix up an appointment with the facilities manager asking his permission to set up the stall.

3. Approach:

This stage involves getting in initial contact with the customer by meeting him and generating interest in the product. Once the salesmen we are with the customer they would make a presentation making him aware of the characteristics of the paper, the discount and the magazines that are on offer.

While selling to Financial Institutions sales representatives focus on presenting the various Business magazines that the customer will get if he subscribes. While pitching to younger customer salesmen focuses on the monthly magazines which are more enticing to them. While making presentations to corporates the focus is on the operational efficiency and convince the Facilities Manager that the implementation will be starting in 2 weeks time from when the employees start signing up for the subscription.

4. Handling Objection:

The most common objection which is encountered during the selling is the fact that most customers who are regular readers of others newspapers are very loyal and are unwilling to change.  This is the time when distinguishing features of the products need to be highlighted for example  Business Standard    highlights the fact that it has  has various sections like the BS 200 which gives the complete analysis of the 200 companies that were traded the most on the stock exchange the previous week. This section on the paper is something unique only to Business Standard. Also 'The Compass' which is a small segment in the Business Standard Newspaper assists people in making their investment decisions as to which sector they should invest their money in was also of interest to people who were more  investment focused.

And of course the magazines which are offered are another reason why most of these customers get ready to buy the subscription. Also the supplements like Brand Line, Life by Business Line, and The Smart Investor by Business Standard are highlighted to entice the consumers to purchase the subscription.

Some of the customers are worried about the implementation time this is where sales person had to tell the customers about how we will be ensuring that they get a regular supply of their business standard by interacting with their vendors and start the delivery of their newspaper to their home in 2 weeks.

5. Closing:

At this stage the customer is more or less aware of the product and has made up his mind to either go ahead with the sale or not. If the subscription are attractively priced most customers prefer to go for the plan offered and want to first get a look at the service being provided. Thus most people will either back out at the middle of the presentation, while others stick around to try and see what they are getting for their money. By the time salesman pops the final question whether the customer wants to pay by cash or cheque the customer usually has made up his mind.

Sales Management

1. Sales Planning:

It is the first step in the sales management process Sales planning guides the organization in achieving its objectives in a systematic manner leading to profitability and success.

In case of newspaper industry plans are formulated keeping in view the overall sales strategy and objectives of individual organizations. Since circulation is the main thing in the news paper industry, all the planning is intended to increase the circulation base of newspaper .The main source of revenue for a newspaper company is the advertisements and they can charge more for advertisements only if their circulation base is higher. This circulation base is increased by eating into the competitor's circulation. The head office decides the targets for all branches in the country and this is communicated to marketing manager of branches across the country. The marketing manager of the branch then allocates targets for every sales executive in the branch. The marketing manager asks each sales executive to target a particular segment. Segment can be hotels, educational institutes, corporate offices, IT companies, students preparing for competitive examinations like CAT, XAT etc.

2. Organizing and Directing Sales efforts:

Most of the newspaper companies hire graduates who are well versed in local languages as selling newspaper require interacting with vendors and intermediate agencies. They generally do not hire MBAs or Post Graduates as they are more prone to attrition. The attrition rate is very high in this industry especially in the second rung companies.

Time Management: Time management is very important as the executives have to visit morning centers at around 5 to 5.30 a.m. in the morning to meet the vendors to ensure the timely delivery of newspapers. Morning centers are places where all the newspapers are dropped and vendors come here to collect newspapers for their locality. Most of the activities happen between 3.30 a.m to 5.30 a.m. Within this short span they have to meet the vendors and ensure they are regularly supplying the newspapers.

3. On the job training:

The sales force is briefed about the newspaper and supplements and then they are sent to the field for training. In this industry the training is mostly on the job where executives have to go and sell the subscriptions to the customers.

4. Compensation Plan:

Generally combination salary plans are followed in newspaper industry. This type of plan includes a combination of salary, commission and other type of incentive plans. As sales people get regular income in the form of monetary incentives, they are continuously motivated and it also provides sales person with the advantage of both a fixed salary and variable income. Every executive is given a minimum target to achieve and on exceeding this target they are given an incentive.

5. Evaluating Sales Force Performance:

The performance of sales force is measured in terms of the number of subscriptions generated by each sales person. At the end of the month they collate how many subscriptions have been generated by executives and on the basis of subscriptions generated salary is computed.

Distribution Process of Newspaper Industry

*
The newspaper sales involve distributing highly perishable products under severe time constraints.

* The printed newspapers have to be dispatched to various distributors across the region. Transportation is normally through private contract carriers within local area, public transport in case of longer distances and through couriers in other cases.

* The newspaper distributor has the rights to distribute the newspaper in his area. The revenue of the newspaper distributor is based on a commission on the sale of every newspaper. The circulation is normally through salesmen appointed and salaried by the distributors, who in turn pass it on to hawkers.

* Hawkers, vendors and book stall owners are the last link of the supply chain before newspaper reaches readers. The hawkers' remuneration is also normally based on the commission system and is generally the highest in the entire supply chain.

* Responsiveness and efficiency play an important role in newspaper distribution channel. Responsiveness includes supply chain's ability to respond to wide a range of quantity demanded (due to demand fluctuations) and meet short lead times. On the other hand efficiency is the cost of making and delivering the newspaper to the readers.
 


Vibhash Gaurav
Lakshmi Narsimhan
Student (2006-08 Batch)
ICFAI Business School
Hyderabad
 

Source: E-mail June 29, 2008

 

        

 

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