Prajjal Saha
Media

Deccan Chronicle @ Re 1 to enter Chennai on March 28

But media planners say that loyal patrons of The Hindu may not react to the price war at all. Promotional and marketing activities along with content and editorial will all contribute to decide tomorrow's winner

The Chennai market is white hot. Deccan Chronicle is all geared up to launch its Chennai edition on March 28.

When contacted by agencyfaqs!, M Venkatraman, president, Deccan Chronicle said that the date of March 28 is tentative and might be postponed by a few days. However, industry sources insisted that the newspaper will keep its date with Chennai on March 28.

Venkatraman declined to divulge further details on the Chennai edition, except for the invitation price of Re 1. Apart from this, the Hyderabad-based English daily has also offered annual subscriptions at Rs 99 for ICICI Bank's card holders in the city. In comparison, The Hindu sells for for Rs 3.25 on weekdays and Rs 4.50 on Sundays.

Industry sources confirm that Deccan Chronicle will start with an initial circulation of 1.75 lakh to 2 lakh. In comparison, the average net paid circulation of The Hindu's Chennai edition is 3.44 lakh (as per Audit Bureau of Circulations, July to December, 2004).

Meanwhile, The Times of India, which was initially planning to launch its Chennai edition by May-end, has apparently decidedly to delay its entry by a couple of months. It seems the Chennai edition is now scheduled for the later part of calendar year 2005.

It seems that the group is keen to gauge the market reaction to Deccan Chronicle's entry. Historically, The Times of India has always been the one to start a price war in all its markets, except Mumbai, where it still holds a monopoly.

An interesting aside: Before joining Deccan Chronicle this month, Venkatraman was director-corporate, Bennett, Coleman & Co. Ltd. (BCCL), publishers of The Times of India. He was in charge of TOI's Chennai project.

Although the difference between the price of two publications Deccan Chronicle and The Hindu is substantial, close watchers of the industry feel that unlike other markets, the Chennai market may not react to the price factor.

Gaurish Pathare, director, central trading group, GroupM, says, “Unlike Delhi and Bangalore, the Chennai market is still very conservative. In addition, the brand loyalty for The Hindu is also very high. There will be several other factors like marketing and promotions, which will decide the fate of these newspapers.”

Concurs Prasun Kumar, media group head, Madison, Delhi. He says, “The Chennai market is more matured. It's similar to Kolkata, where lower price couldn't remove the market leader from its position. The differentiating factor will be the content and marketing activities. Only invitational price of Re 1 cannot help Deccan Chronicle to be a strong number two in the Chennai market.”

Kumar adds, “However, I feel that Deccan Chronicle will try to carve out a niche for itself, and cater to a new set of readers. And as a matter of fact, the entire Tamil Nadu print market will further expand with the entry of more players.”

“The next six months will be very crucial for Deccan Chronicle. If the newspaper is successful in establishing itself as a close competitor to The Hindu within this period, it will be successful. Or else, it will be very difficult to break Hindu's monopoly in the region.”

As per IRS 2005, Round 1, the total readership for any English daily in Tamil Nadu is 7.38 lakh. Of this, The Hindu's readership is 6.89 lakh.

agencyfaqs! also tried to seek Hindu Group's comments on the sudden development in the Chennai market, but in spite of several attempts, N Murali, joint managing director, Hindu Group of publications could not be contacted.

Pathere of GroupM feels that Hindu will not react immediately to the price factor as it will indicate that the publication has accepted Deccan Chronicle as the number two. He says, “Hindu would rather like to sit and watch on the price front, and concentrate on marketing and on-ground activities to retain its readership base.”

Regarding the advertising rates, media planners feel that the change will start happening by the end of 2005, especially after TOI enters the market, or Deccan Chronicle emerges as the clear number two.

Kumar of Madison says, “Competition would certainly affect the advertising rates of the publications. For instance, in Mumbai, where TOI has a monopoly in the market, its ad rates are very high. But despite having a similar circulation figure in Delhi, the ad rates are almost half as Hindustan Times is a close competitor in Delhi.”

© 2005 agencyfaqs!

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