Wednesday, 15 February 2012

HOW DID ECONOMIC TIMES BECOME A HOUSEHOLD NAME?



The ‘Marketing Mix’ is a weapon in the hands of the marketer to grab customer attraction. The ‘Marketing Mix’ is also referred to as the 4P’s, and they are:
  • Product
  • Price
  • Place
  • Promotion
The following case focuses on PRICE, and how did it enable Economic Times to become a household name.
Samir Jain is the brain behind this strategy. He is also referred to as the father of Price competition. He introduced the revolutionary INVITATION PRICING.

In the class of financial newspapers, we have Economic Times v/s all other financial newspapers, such as The Financial Express, Business Standard, etc.



There exists a distinction between ‘circulation’ and ‘readership’. So although 1 newspaper is sold but it might be read by 4 people. Samir Jain wanted to capture the market, so he increased the market size and hence, their share.


Economic Times was introduced in 1961 along with a ‘Brand Equity’ Supplement on Wednesday. The price scheme at that time was say Rs x from Monday to Sunday. But as the supplement was gaining popularity, then the price for the Wednesday edition was made Rs (x-a){obviously a>0 !!}. When Samir Jain realised that the supplement was the hook to grab attention, so he introduced a supplement for every weekday and the new price scheme thus became : Rs (x-a) from Monday to Friday and for Saturday and Sunday the price was made Rs 10!!


Now, that was a big step! The reason why he succeeded was because, although households will restrict their purchase of the newspaper to weekdays only, but institutional sales won’t change!


Institutions like corporate offices, school and college libraries don’t bother whether it is a Sunday or a Monday, they have to operate at all times, so the loss in revenue during weekdays was not only covered up but it helped establish the brand.


Price is the most flexible weapon in the hands of the marketer but should be used with great caution because that is an important source of revenue as well!



This is a classic marketing strategy, in which a price attack is made to capture the market.








Contributed by-

Nishtha Midha
SRCC


1 comment:

  1. Price is a dangerous tool indeed. I remember having come across this pricing paradox plenty of times - when your product is popular, should you increase your price to make more revenue or decrease your price to attract a larger audience (and hope that eventually you shall see increased revenues)? Economics at its best!

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