Ashish Bagga, ED & Publisher and, Mr. Barun Das, GM Marketing, Business Group

"The end goal is subscription. This price cut is a via media. The price reduction will induce trial, which will increase our potential subscriber base."

Recently exchange4media broke the news of Business Today reducing the cover price to Rs. 10. We saw it as an interesting and a bold move by BT to finally clinch the No. 1 slot in the business magazine genre. To know more about the rationale and a possible change of model, from subscription driven to news-stands driven, we spoke to Mr. Ashish Bagga (ED & Publisher- Business Group) and Mr. Barun Das (GM Marketing). What followed was a candid Dialogue…

Q. Do Indian media brands lack interactivity with their audience and in the process are less matured brands?

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Yes, I strongly feel that interactivity between the media brand and its set of users needs to be addressed very seriously and what the different print media brands or the other players are looking at currently is inadequate and that's the place where we would like to invest and dominate.
That's one of the directions that we are addressing and had already made a beginning with the hugely successful BT-Crossfire interactive series which we ran in 4 locations. We would like to address other similar initiatives, for instance, one of our efforts is going to be in bringing out a series of special issues and events as a part of the 10th anniversary celebrations of BT.
We are also looking at some green-field activities towards fulfillment of this objective. Some of them are under development and will be shared with you at an appropriate time.

Q. Price seems to be the most important element of your marketing mix. BT started at Rs. 25, the most expensive business magazine. Thereafter, the price dropped only to go up later. Now again, it has been dropped by 50%. How crucial is the role of 'pricing'?

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I think pricing, as well as any other marketing strategy, is a function of the product, which we sell. Here, we are talking about a magazine, which one reads and understands and comes back to it. We have two distinct channels of selling our magazine - one is subscription and the other is newsstand sale. If you look at the earlier positioning of BT, it was a more management feature-oriented magazine. We had differentiated it in terms of pricing to promote and make subscriptions more attractive. We took the subscription route because the magazine, the contents etc. were more or less timeless. The magazine we bring out now has changed - it is a more topical and comprehensive business magazine because we felt it is the current need. That is what our research continued to reflect back to us and that's how we have taken the decision to shift the editorial positioning and the editorial focus. Having done that, we dropped price to enhance accessibility.
At the time of BT's launch, I would believe that the newsstand price was fixed at a level, which was aspirational, and the subscription price was pegged at really attractive levels, so that the difference between newsstand and subscription in terms of pricing was really big and therefore the thrust was subscriptions.
As we see it today, the model has changed from a subscription driven one to a newsstand driven model. I am not saying that the priority on subscriptions doesn't exist. It certainly does matter. We see the increase in sales in two stages; stage one is casual buyers or the newsstand buyer, which in stage two is converted into subscription buyers. The ROI is more efficient if we first draw potential buyers to newsstand and later convert them into regular subscribers.

Q. What does the early signs indicate?

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Well, it's very early to say but the initial feedback has been hugely positive. This issue will be a sell out.

Q. In the last 10 years, while other genres have grown, Business-magazine genre has almost remained frozen on a certain number. This inspite of favorable and rapid changes in business environment, which should have acted as a catalyst. Can you explain the possible reason?

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I believe that in last 3-4 years, Indian markets have matured. Even in this time this genre has not grown. Magazine A or publication B has seen growth either through market share or other means in the market but there has not been huge expansion of this segment, probably because the readership is static. But growth is a must. Any strategy we adopt has to be growth oriented. That is something we wish to fulfill. Hopefully with the current initiative we will expand the market in terms of its overall size.
Probably 2 years from now we'll see a robust economy and hopefully by then we will be positioned appropriately to reap the benefits, having established a good rate of growth, having given tremendous value to the advertiser.

Q. How much extra do you plan to distribute?

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Right now, we cannot give you the exact number for the simple reason that we are an ABC member publication and the rules do not permit us to give out any figures until certified by the ABC.

Q. You have got major stake as far as business genre in concerned. Five years from now, how do you see this entire segment growing?

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The more the sources there are for business information, the more will it fuel readership. It depends where the stimulus comes from .The stimulus can come from the net, television or print. The reason for a business magazine to take a stand and be successful is very simple - first, go beyond the news in a credible manner. Secondly, provide readers in depth analysis and opinion to facilitate decision-making. And I believe that in the future special-interest publications will become category killers in their own right.

Q. Is the overall slowdown affecting BT? What is the significance of timing of this price cut?

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There's never been a slow down for BT, India's no. 1 business magazine.
The timing is important as we are getting into the peak season. Also the 10th anniversary of BT is in January 2002. We thought this is the right time for the price cut so that it reaches the peak around the anniversary.
To add to the reasons, BT 500 is one of our best selling issues and it was the right time to initiate the price cut.

Q. Since your genre (business) and its reader's are serious and involved, isn't subscription the preferred route. International examples like Fortune, Time etc seem to suggest so. Why such stress on Newsstands?

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Absolutely. The point I was trying to make is that the end goal is subscription; this (price cut) is a via media. The price reduction will induce trial, which will increase our potential subscriber base. The strategy is simple: Drum-up the newsstand activity, draw in more readers, therefore, the readership goes up and then convert those readers into subscribers -use the accessible price to bring in more readers and get a larger share of that growth thereby dominating the business segment to a greater extent.

Q. From which region do you expect the maximum response to the price reduction?

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We expect a uniform response. In the past we had reduced the price; the response was uniform across the country. We expect to sell about 70 - 80 % in the top ten metros. Maybe even more concentrated, say about 70% in top six metros.

Q. What is the speculation on growth of the circulation?

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Well, as said earlier, we can't give the exact numbers due to ABC rules.
What we can say is that the trade PO (purchase order from vendors) has been increased for this issue by about 100%. We realize that it may not be this high in the long run, as the BT 500 issue is one of our best sellers anyway.

Q. Finally, how did you arrive at the exact %age of rate cut? Did you conduct any formal research or simulations on past data?

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Based on our business objectives, we developed optional strategies. Price was one. Looking at our earlier experience with BT, which was very successful, we saw potential in this strategy. To be sure, we ran this through our senior sales staff for their feedback and suggestions. This feedback was further analyzed and simulated to arrive at the most feasible option. Why Rs 10, why not 8 or 12? That's because we had BT's 10th anniversary coming up. So, 10 on 10 is what we offered to our readers. And Rs 10 on BT's 10th anniversary works beautifully - a magical figure, I guess!