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Another round of cover-price war in Delhi

05-July-2002
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Another round of cover-price war in Delhi

The Times of India has yet again sent out an invitation to the Delhi-ites. The offer is to buy the TOI @ Rs.1.50 on six weekdays (Monday to Saturday). Sunday remains unchanged at Rs. 2.90. What is new about that, you may ask. Perhaps you did not notice that on Mondays and Wednesdays TOI had gone up to two bucks from Rs. 1.50, a few months back. Even their archrival, HT, costs two bucks on four of the six weekdays.

These price hikes on select days had happened without too much brouhaha. Understandably so! This has led most of the media watchers to believe that the price wars, perhaps, had begun to hurt. And the combatants, therefore, were retreating, even if sheepishly, to more realistic pricing. The fact that the TOI is running a highly visible and noisy promotion for the last three months, without talking about the cover price, lent credence to this belief. This promotion first exhorted the readers to carry their copy of TOI along because there were gifts waiting for them at the traffic signals and thoroughfares. About six weeks later the promotion required them to keep the TOI at home. This time a surprise knock at the door could fetch them a gift. R Sundar, (Director-Times group) had explained that he was rewarding the TOI reader for owning-up the brand. The spiel comprised issues like the quality of contents, the packaging, and lately, even the new 'international (slimmer) look'. The cover-price remained a non-issue. Now, it is back to 'me lower than him'.

"Why?", we asked Sundar. "Because it sells better" he retorted. "But Rs. 1.50 is an old hat" we persisted. "It still brings in new subscribers, so how does it matter" he argued. We asked, "at the current HT prices, the difference isn't even ten bucks a month. Who will give up a paper for that? And if someone does what kind of a reader will that be? Besides, HT may soon react and offer parity as they have done in the past?" "Fine, if that happens, the readers will gain, thanks to TOI" Sundar insisted. "If that is the case, why did you raise it to two bucks on two weekdays if you had to bring it down back to Rs. 1.50" was our bouncer. "Well, that is a good question… and calls for a detailed answer… backed with numbers…which I do not have right now" he ducked deftly. To be fair to him, he spoke from his dinner table.

We quizzed Amit Ray, Executive Vice President at Mudra and an old media hand. He believes that though price and circulation are inversely related, the relationship is inelastic beyond a point. And he feels that such a point is already reached in Delhi. "The growth will not be as spectacular as last time" he predicts.

Amit may be right. But the battle for Delhi is as dogged as it can get. Every copy counts. Every reader has become worth bleeding for. Calculating marginal returns has been forgotten long ago. Buying market share at any cost is the mantra. And it also means keeping HT on the edge, and if possible bleeding it white. (And HT is rumoured to have bled substantially over the years. Being a closely held company, their accounts are not easily accessible). Amit feels that HT may not respond with parity pricing this time around. "They have really built-up the product and I would assume, as a leader in Delhi, they will hold their price". It is this issue among many more that the 'Team HT' will be grappling with as their key managers put their heads together at the Manesar Resort tonight, on the Delhi-Jaipur highway.

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