Newspaper Marketing in Bangladesh: A Case Study on the Prothom Alo

115
Daffodil International University Journal of Business and Economics, Vol. 1, No. 1, July 2006
Newspaper Marketing in Bangladesh:
A Case Study on the Prothom Alo

Syed Maruf Reza*
Mohammed Masum Iqbal**
Mohammad Riaz Uddin***
Abstract: Newspaper has become a part of any modern society. This is one of the most
important consumer products of our daily life. Like all other consumer goods newspaper
industry requires some special marketing efforts. The main focus of this article is to describe
the various tools of marketing mix i. e. 4Ps of newspaper marketing. To do so the researchers
have selected Prothom Alo, as it is the number one daily (in terms of circulation) of our
country. The article has also attempted to point out the marketing problems of Prothom Alo. It
is found that the management of Prothom Alo does not have proper concept of marketing; they
don’t have any marketing manager; they don’t conduct regular marketing research; the
distribution channel is very long and costly; the price is comparatively higher and so on. At the
same time researchers have suggested that to solve those problems Prothom Alo should adopt
modern marketing concepts in their decision making process, hire people with proper
background, follow differentiated pricing, target different consumer segments to increase the
market share, minimize the distribution cost, develop Prothom Alo as a brand and the like.

1. Introduction

Newspaper publishers spend millions of dollars annually to ensure that the newspaper arrives at
the newspaper stand or the subscriber’s doorstep every day. Reporters track down stories and
editors diligently maintain the editorial integrity of the newspaper. The production department
meticulously guarantees that advertisements make it onto the right page. It is no small feat that this
daily production process has continued for centuries across every city and town in the world.
Therein lies the rub. With a resolute focus on both the published newspaper and production
efficiencies, newspapers have become true stalwarts of the industrial age. The last decade has
ushered in a new era, the information age, which is characterized by an unwavering focus on
customers. A newspaper’s most valuable asset is customer acceptance. Today, customer service
means more than delivering the newspaper on time, every time. Many newspapers are
transforming their organizations from manufacturing-oriented enterprises to customer-centric
businesses and relying on customer relationship management solutions to help catapult
newspapers into the new age (Margaret’ 2002).

In the early of the eighty’s of the last century the then government of Bangladesh had declared the
newspaper sector as an industry. Now a day it has become a wide and very important industry of
the economy of our country. At present there are about four hundreds national daily newspapers
and more than two thousand magazines in the country [Siddique’ 2002]. This is one of the most
dynamic sectors of our economy. A revolutionary change has been occurring in this industry
especially from the last ten years. Technological revolution has brought a dramatic development in

* Senior Lecturer, Faculty of Business and Economics, Daffodil International University, Dhaka.
** Assistant Professor, Faculty of Business and Economics, Daffodil International University, Dhaka.
*** Lecturer, Department of Finance, University, Dhaka.

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Newspaper Marketing in Bangladesh: A Case Study on the Prothom Alo
116
this sector. Our newspaper industry has been flourished highly during this period. A number of
renowned daily newspapers are ready to face the challenge of the era of information age. It has
crossed a long path from the era of letter compose to today’s updated computer compose. Internet
has changed the way of the newspaper business. Now a day, publishing of newspaper is not an
adventure; it has become a business. And the ultimate objective of any business venture is to
maximize the profit for the owner, not to maximize the social welfare. The newspaper industry
has been transformed from its old entity, social work, to a for-profit business venture. Marketing is
the most critical factor of today’s market-oriented newspaper industry. That’s why today’s
entrepreneurs of this industry have to think for various marketing variables i.e. the development
and maintenance of product’s quality; developing price strategies; establishing effective
distribution channel; and lastly conducting promotional programs to pursue consumers to buy their
product. And they have to do all these things keeping the needs, wants and demands of their
consumers in their minds. In this way we can see that the understanding and application of modern
marketing concepts is very significant in getting success in this industry.

2. Objectives of the Study

The primary objective of the study is to identify and describe the use of various elements of
marketing mix in the newspaper industry of Bangladesh through focusing the marketing practices
of the highest circulated newspaper, Prothom Alo. This paper has been carried out with the
following specific objectives:
i.
To cite the price determination process of a leading newspaper.
ii. To describe the marketing cost of Prothom Alo.
iii. To narrate the distribution channel of a national newspaper.
iv. To illustrate the promotional activities of Prothom Alo.
v. To identify the current marketing problems of a daily newspaper.
vi. To find out the ways of increasing the marketing efficiency of Prothom Alo.

3. Methodology of the Study

This is basically a descriptive research by nature and is prepared on the basis of secondary data.
The sources of these secondary data are the relevant official documents of The Prothom Alo, the
published articles of different research works, magazines, and reports of various government
authorities and independent market research projects of various private research firms. A direct
study has been conducted in the head office of the Prothom Alo during the period of June-
July’2005 to collect relevant information about its marketing practices. The editor, the deputy
editors, the news editor, chief reporter, administrative manager, accounts manager, the commercial
manager, the press manager and the divisional heads have been interviewed to obtain the required
data.

4. Scope of the Study

This article does not focus on the marketing practices of all the major newspapers of Bangladesh.
Rather it pays attention on the Prothom Alo, the number one (according to the volume of
circulation) daily newspaper of the country. The research paper only attempts to describe the 4 Ps
i.e. the product, price, place and promotion programs of the particular newspaper.

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Daffodil International University Journal of Business and Economics, Vol. 1, No. 1, July 2006 117
5. Limitations of the Study

Despite of the level best effort of the researchers, this article is not fully free of certain obvious
limitations. The basic limitation of this article is its sole dependence on secondary data. Secondly,
the sources of secondary data were very limited. Relevant data is not available regarding this field.
For this reason the accuracy of this report depends on the accuracy of the information furnished by
the secondary sources.

6. Corporate Background of Prothom Alo

The Prothom Alo was first published on 4th November, 1998 under the ownership of Transcom
Ltd., a leading corporate giant of the country. Transcraft Ltd., a subsidiary company of Transcom
Ltd., is playing the role of publisher of this daily. Prothom Alo is a sister concerns of ‘Shaptahik
2000’ and ‘The Daily Star’ which are the leading Bangla weekly and the leading English daily of
the country respectively.

7. Corporate Mission & Strategy

The mission of Prothom Alo is to prolong the market leadership and protect the business interest
of the newspaper. Prothom Alo’s product strategy is to provide independent, unbiased,
nonpartisan, upholding social values, non-communal and modern out look to the consumers
(readers) for the betterment of the whole society. Critical Success Factors of Prothom Alo are
honest journalism, teamwork, freedom in decision-making, social interaction & involvement and
strong financial support (investment). The main differentiators of Prothom Alo from its
competitors are quality of news presentation, professionalism and journalistic approach. It
believes that volume of revenue depends on competitive market position of the newspaper. So it
focuses on increasing the volume of circulation as a part of its strategy to actualize revenue.

8. Organizational Structure of Prothom Alo

The Prothom Alo follows a very flexible organization structure in which various departments
enjoy sufficient freedom and they cooperate with each other.

9. Board of Directors (BOD) and the Editor

As the agent of the Board of Directors the editor of Prothom Alo is directly controlling the overall
activities of the daily. All the news and advertisings are published according to his decision. As
the Chief Executive Officer (CEO), he plays the coordinating role between the Board of Directors
and the management of the newspaper. He is leading the team from the front in developing and
executing different policies and strategies in light of the expectation of Board to achieve the
ultimate objective of the organization.

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Newspaper Marketing in Bangladesh: A Case Study on the Prothom Alo
118
10. Departments and Divisions

Two departments – office department and press department perform all the activities of Prothom
Alo. The office department is also divided into two sections- news section and general section.
Within the news section there are three divisions- editorial division, news division and feature
division. These three divisions are directed by three deputy editors who perform their job under
the direct supervision of the editor of the daily. It is mentionable that in Bangladesh Prothom Alo
has introduced the position of Deputy Editor. Within the general section under the supervision of
the administrative manager there are four divisions- administration, advertising, accounts and
circulation. And finally, the general manager with the cooperation of a press manager and a press
supervisor controls the press department. Besides the head office there is a branch office in
Chittagong, which is managed, in the same fashion of that of the head office. (Jogajog’ 2002)

11. Work Force

Prothom Alo has three hundred and thirty five (335) full time employees including ten [10] female
employees. For compensating employees, Prothom Alo offers the salary structure of the fifth
Wage Board of Bangladesh government. It also provides various benefits such as provident fund,
gratuity, individual employee insurance coverage, group insurance coverage to its employees.
Prothom Alo is offering its employees a very cordial working environment with a high
opportunity to build up their career.

12. Target Market Decisions

One of the major differences of newspaper marketing is that the marketer has to satisfy two major
groups of customers:
a. Readers (who buy the product for their personal consumption i. e, final consumers)
b. Advertisers (who buy the advertising space for their business use i. e. business
buyers)
In developing the target market decision, a newspaper marketer has to consider both of these two
types of customers as well as other factors such as the different variables of market segmentation,
the competitive situation of the market, the SWOT (Strengths, Weaknesses, Opportunities and
Threats) analysis of the business venture etc. which influences the overall performance of
newspaper business. Like other newspapers of our country, Prothom Alo is developing their target
market decision by considering all of these factors.

13. Marketing Mix of Prothom Alo

Marketing mix is the set of controllable variables of marketing. In general it is expressed in 4 Ps:
product, price, place and promotion of a particular company (Kotler, 2003). The marketing mix of
Prothom Alo is described below:

Product
In a narrow sense, a product is a set of attributes assembled in an identifiable form. In marketing,
we need a broader definition of product to indicate that consumers are not really buying a set of
attributes, but rather benefits that satisfy their needs. Product is an umbrella term that covers
goods, services, places, persons, and ideas (Stanton 1994). Marketing offer is some combination
of products, services, information, or experiences offered to market to satisfy a need or want
(Kotler, 2003).

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Daffodil International University Journal of Business and Economics, Vol. 1, No. 1, July 2006 119
Level of products
A product planner must think about three levels of products and services (Kotler, 2003). Each
level adds more customer value. The most basic level is the core benefit that addresses the
problem solving benefit of the marketing offer. For Prothom Alo, the basic product is information
i. e. news & views. At the second level, marketers turn the core benefit into an actual product. In
this stage product features, design, quality level, brand name, and packaging are developed. The
actual product of Prothom Alo is the newspaper itself. In the third stage, to differentiate their
offers from competitors’ a marketer offers some additional benefits with core benefit and actual
product, which is referred as the augmented product. Prothom Alo offers different
supplementary as its augmented product. In the annexure part there is a list of supplementary
offered by Prothom Al




Chhutir Dine



Brand
[Prothom

Anon
Alo]
Alpi

Desig
Informa tio

Naksha
Gollachhut

Features




Bondhushabha


Core Benefit


Actual Product

Augmented Product

Figure 1: Levels Of Product Of Prothom Alo



Product Mix

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Newspaper Marketing in Bangladesh: A Case Study on the Prothom Alo
120
Now-a-days firms do not rely on a single product rather they sell many products. According to
Stanton (1994), the set of all products offered for sale by a company is called a product mix.
Kotler (2003) explained the term as the set of all product lines and items that a particular seller
offers for sale. The different elements of Prothom Alo’s product mix are:
i.
daily news & views
ii.
space for advertisements
iii.
web edition of Prothom Alo

14. Web Edition of Prothom Alo

Like its regular issue, Prothom Alo is enjoying the market leadership in its web edition also. On an
average worldwide more than One Hundred Fifty people read Prothom Alo daily. The web address
of Prothom Alo is www.prothom-alo.com.
Space sold for advertisement
It’s found that the total space of Prothom Alo’s each issue is 7,040 square inches (24 October’05).
The total space for matter is 6,130 square inches, which is 87% of the total space, and the rest of
the 13% is the space for margin. The total space for news of that particular issue is 3558 square
inches, which is 50.5% of the total space and 58% of the total matter space. The total space for
advertising is 2,572 square inches, which is 36.5% of the total space and 42% of the total matter
space.

Table 1: Space Management of Prothom Alo (24 October’05)

Content (20 pages)
Total Space (Square Inches)
% Total Space
Total Space for News
3558
50.5%
Total Space for Advertising
2572
36.5%
Total Space for Margin
910
13%
Total Space
7040
100%

Table 2: Space Management of Prothom Alo (24 October’05)
Content (20 pages)
Total Space (Square Inches)
% Total Space
Total Space for News
3558
58%
Total Space for Advertising
2572
42%
Total Matter
6130
100%




Pricing Decisions

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Daffodil International University Journal of Business and Economics, Vol. 1, No. 1, July 2006 121
Price is the exchange value of product. Price is the amount of money and/or other items with
utility needed to acquire a product (Stanton 1994). Kotler (2003) explained price as the amount of
money charged for a product or services, or the sum of the values that consumers exchange for the
benefits of having or using the product or service. Pricing is a critical factor in the successful
operation of for-profit and not-for-profit organizations. Setting prices for new and existing
products appears simple enough. To find out the selling price of a product, a marketer apparently
has to estimate the costs, add a margin for overhead and profit. Price is the primary element of the
marketing mix that generates revenue.
The pricing strategy for newspaper industry is different from other consumer products. Prothom
Alo is following a special type of competition based pricing approach to determine of the price of
its product. The details of per unit production cost of Prothom Alo are as follows:
Step 1: Determination of Per Unit Production Cost


Newsprint





Tk 6.90


Printing



1.43


Factory Overhead



.55





8.88
Indirect Overhead


1.46


Total cost



10.34

Step 2: Determination of Per Unit Sales Revenue



Per unit sales price
Tk 8.00



Agent’s Commission 3.40



(42.5%) ________



Per
unit
sales
revenue
Tk
4.60

Step 3: Determination of Per Unit Marketing Cost

i. annual promotion expenditure



bill board




Tk .75 crore



incentive to the hawker & agency .40 crore



trade promotion



.91 crore



(85000 copy x 12 x 8.88)
special
promotion
package

1.00

crore










Tk 3.06 crore

ii. annual distribution cost




Tk 1.45 crore

iii. annual production cost



Tk 89.83 crore


Total Annual Marketing Cost
Tk 95.34 crore



Per Unit Marketing Cost
Tk 10.98

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Newspaper Marketing in Bangladesh: A Case Study on the Prothom Alo

Step 4: Determination of Per Unit Target For Advertisement Revenue



Cost of marketing Tk 10.98



Sales revenue 4.60



Advertisement target Tk 6.38

(If we multiply this per unit advertisement target by the total sales volume we will get the total
daily target of the advertisement revenue.)
Step 5: Determination of Deficit In Pricing



Per unit marketing cost Tk 10.98



Per unit price 8.00



Per unit deficit in pricing–Tk 2.98
Unlike other consumer products, Prothom Alo is not setting its product’s price by adding a mark-
up with its total marketing cost. Rather they have to make up the deficit in pricing and to make the
targeted profit with the revenue of advertisement. So it’s really tough to define the pricing strategy
of Prothom Alo in the light of pricing approaches of marketing management.
Table 03: Per Unit Price Changes of Prothom Alo

Year Taka
1998 6.00
1998-1999 6.00—7.00
2001 7.00
2003 8.00
Source: Prothom Alo

Table 4: Sources & Daily Cost of raw Materials [Newsprint]

Source Percentage
Amount
(Ton)
Unit
Price
Total Cost of
(Taka)
Newsprint
(Taka)
Imported 85%
26.35
60000
15,81,000
Local 15% 4.65
45000
2,09,250
100% 31
17,90,250
TOTAL
Source: Prothom Alo

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Daffodil International University Journal of Business and Economics, Vol. 1, No. 1, July 2006 123
Place Decisions
A critical task for marketers in the new millennium is the efficient movement of goods and
services from the point of production to the points of consumption. There are hundreds of ways in
which goods and services can be distributed to consumers. There is no standard distribution
system that can satisfy the needs of every firm. Many organizations use several distribution
channels to reach different market segments. A distribution channel consists of the set of people
and firms involved in the transfer of title to a product as the products move from producer to
ultimate consumer or business user (Stanton 1994). In other words, channel of distribution is a set
of interdependent organizations involved in the process of making a product or service available
for use or consumption by the consumer and business user (Kotler, 2003). Prothom Alo’s channel
of distribution is as follows:
Figure 2 : Channel of Distribution of Prothom Alo for the whole country


Circulation
Production
Distribution
Agent
Department
Supervisor

Department



Sub-agent
Hawker
Consumer or

Reader


Figure 3 : Channel of Distribution of Prothom Alo for Dhaka City

Hawker

Association

Circulation
Production
Distribution

Department
Department
Supervisor

[6 posts]

Hawker

Association


Member
Consumer or

Non-member
Hawker

Hawker
Reader



From the above figures, it is clear that Prothom Alo’s distribution channel in Dhaka city is
different from the distribution channel in the whole country. But in both markets, Prothom Alo is
using very long distribution channel.

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Newspaper Marketing in Bangladesh: A Case Study on the Prothom Alo
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Cost of Distribution
Cost of distribution of Prothom Alo is very high. It’s about 42% of per unit selling price. The
major portion of the distribution cost is agent’s commission, which is about 85% of the total
distribution cost. The details of distribution cost of Prothom Alo is shown below:
Agent’s commission ---

35%
Unsold, Trade promotion, Bad debt ---
6.5%

Total distribution cost ---

41.5%

Promotion Decisions
Promotion is an attempt to influence the consumers to react in favor of the company. In other
words, promotion is the element of an organization’s marketing mix that serves to inform,
persuade, and remind the market of a product. The organization is selling it, in hopes of
influencing the recipients’ feelings, beliefs, or behavior (Stanton 1994). Using the concept of
promotion a company carefully integrates and coordinates its many communication channels to
deliver a clear, consistent, and compelling message about the organization and its products
(Kotler, 2003). According to Kotler there are five elements of promotion mix: personal selling,
advertising, sales promotion, public relations and direct marketing. Prothom Alo is using all of
these elements of promotion mix except sales promotion. It’s using personal selling basically in
collecting response from the advertisers; direct marketing in their web edition; advertising to
increase their product image; and public relations to build up strong corporate image in the
society. Study shows that Prothom Alo is using massive promotional activities than its competitors
do. They are using print media (basically magazines), electronic media (satellite television
channels) and out-door media (primarily banners & bill boards) for their advertisements.
Sometimes they are using the different newspapers and magazines published from the same house
to promote Prothom Alo, which is obviously free of cost. They are organizing seminars, talk
shows, different competitions, contests, public rallies, award giving ceremonies, awareness build
up programs in different social issues etc. as a part of their public relations \activities. The detail of
the annual promotional expenses is shown below:


Table 5: Annual Promotional Cost of Prothom Alo

Sector of Expenditure
Amount [in Tk]
Bill Board & Banner
75,00,000
Trade Promotion [85000 x 12 x 8.88]
90,57,600

Incentive to Hawker and Agency
40,00,000
Television Commercials & Others
1,00,00,000
Total 3,05,00,000
Source: Prothom Alo


15. Circulation of Prothom Alo

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