Nava Bharat defines distribution as competitive strength

By , agencyfaqs! | In | March 19, 2001
The 67-year-old Nava Bharat group of publications is redefining its business to become a complete solutions provider for marketers targeting Nagpur

Nearly six months back, the 67-year-old Nava Bharat Group, known mainly for its Hindi daily of the same name published in 11 editions, took an interesting step. It began constructing an FMCG-like distribution system in hometown Nagpur. Dividing the city into zones, it appointed about 400 company-controlled franchisees. Around the same time, it launched its first Marathi newspaper, Nava Rashtra, in Nagpur. To test the efficacy of its new distribution network, it distributed Nava Rashtra through this network while Nava Bharat kept circulating via the conventional chief-agent-and-vendors route. Today, this new distribution network is Nava Bharat's pitch to marketers - advertisers and non-advertisers - interested in targeting the Nagpur populace.

"With the level of penetration we have now, in time to come, we will be extremely strong in Nagpur," claims Henry D'Souza, group general manager. "This distribution network will now enable marketers to do test-marketing, micro-targeting of an area and the like in as controlled an environment as they wish. So for above-the-line marketing, an advertiser can use Nava Bharat and Nava Rashtra, while for below-the-line marketing, we give them our distribution network."

It is, in a way, a redefinition of the Group's business. "This is not about merely newspapers and advertising," explains D'Souza. "We wanted to become a complete solution provider to any company interested in reaching out to consumers in Nagpur."

But why focus on the distribution network? "It all stemmed from the fact that we needed to have a distinct positioning in the mind of the marketer," replies D'Souza. "Traditionally, newspapers talk of nothing but circulation. We were asking ourselves, what more can we provide the marketer?" The questions are not new, he agrees. "Every client asks the same question: Can you do something innovative for us? But with a newspaper, what more can you do besides a front page, island, back page, and so on? What more?"

Alongside, considering the trust associated with its brand in Nagpur, the company was looking at the consumer and asking itself if it could try satisfying his other needs. The company had also invested in an ISP license for the city. A company-owned distribution network as a competitive strength seemed to be the right answer to serve both the marketer and the consumer better.

So around August 2000, it started putting the plan to action. Nagpur was divided into 12 clusters. Each cluster was further split into 33 zones and one franchisee appointed in each zone. D'Souza describes the criteria for choosing a franchisee as: a local person, with enterprise, sufficient education and knowledge to even act as a stringer for local news, and the ability to cough up a reasonable deposit money ("slightly higher compared to the FMCG industry").

About 400 franchisees were therefore appointed and territories divided at the ground-level in terms of municipal wards (129 in all). Territory was so divided among franchisees as to have "manageable areas". That is, 700-800 households, or a radius of 1-1.5 km. Today, each franchisee has two boys on stipend (paid by Nava Bharat) to deliver the paper at homes. (That makes 800 boys on Nava Bharat's stipend in Nagpur.)

At the same time, Nava Bharat was readying to launch its first Marathi daily, Nava Rashtra, in Nagpur. Readership studies had convinced the company that there was a huge slot left open for a good Marathi daily even in the presence of four options - Lokmat, Loksatta, Janwad and Tarun Bharat. Statistics showed that out of a total population of 4.35 lakh households in Nagpur, 3.5 lakh were Marathi-speaking. But Marathi papers sold only some 70,000 copies plus.

"The idea had been toying in our mind for years. Now we had a new distribution in place to be tested and we could not mess around with our flagship brand," recalls D'Souza. "So we thought let's test it with a new brand."

Between August and September, about 650 people and 30 Sumo Vans laden with gifts went door to door to sign on consumers for Nava Rashtra (cover price: Rs 2.50) and also query them on some 14 publishing parameters, basic demographics and the like. People signed on for subscriptions ranging from three- to 12-month periods in exchange for gifts of corresponding value (a gift worth Rs 180 for three month, Rs 360 for six months, Rs 540 for nine months and Rs 720 for a year's subscription). The company claims to have distributed over 45,000 gifts (equalling the copies sold on the first day), the highest being for the three-month trial period (14,347 subscribers). With such numbers, it claims to have overtaken the existing leader, Lokmat, in circulation.

The amount of investments in this entire exercise, whether the consumers came in for the gifts or the paper or whether the investments will pay off, is anybody's guess. Whether Nava Rashtra has actually maintained an impressive circulation growth, whether Lokmat's sales have fallen, and how Loksatta, Janmat and Saamna have been affected is becoming quite a controversy. "Hats off to them if they can prove this number," says a throughly bemused Ajit Nair, branch manager, Mumbai, Lokmat. He claims, "We have seen an increase in circulation after the launch of Nava Bharat. Not even a single reader of Lokmat has shifted to Nava Rashtra."

Controversies and financials aside, it is interesting to question whether such an "innovation", as D'Souza maintains it to be, holds real benefits. Though one senior media planner dismisses it as "nothing earth-shattering", another is equally gung-ho about "the tremendous opportunities it offers my client. Sampling is now a cake walk," he says.

"It sounds like a good concept," admits the marketing head of a rival newspaper. "But the test lies in its execution." D'Souza says he is in the process of negotiating with some marketers. Its success will be known only in time to come. One thing is known for now. Till recently, the company was toying with the idea of "launching milk through our own brand."

© 2001 agencyfaqs!

© 2001 agencyfaqs!