Dear MxM by Jaisurya Das: Is it ok to offer discounts on bulk sales?

Written by

in

By Jaisurya Das

 

Namaskar and Welcome to Dear MxM’s fifth issue of 2016 !

 

I understand the legendary ‘Basics vs Neutrality’ debate has come to an abrupt / logical end with the Telecom Regulatory Authority of India (TRAI) asking Reliance to keep its ‘free basics’ offer on hold until further advice.

 

In other words, I am happy to announce that we are back to Square One. Amazing, aren’t we?

 

Nothing free since the learned ‘internet evangelists’ believe that this will infringe on one’s freedom!

 

And to think all these years, I thought freedom meant so much more! RIP.

 

I must confess I am unable to understand how ‘free basics’ prevents new users from accessing what they want….

 

Data packs are available for everyone and if you’re ready to pay, there isn’t any reason why you won’t get access to anything you want, be it information on fertilisers, farming or pornography.

 

We have this uncanny knack of questioning anything that is free; And yet, when we want something, we expect it virtually free. Sometimes, its sensible to allow people to do their job.

 

Give them a chance. It’s nothing that can’t be reversed. But what it could do, is something that you or me can’t dream off.

 

Yes, I am not an enlightened one. I don’t join a revolution I don’t understand. I don’t believe this world is made equal, be it the human race or the internet.

 

Well, c’est la vie….and we are officially back to where it all started….

 

Neutrally inaccessible.

 

Amen.

 

Coming to think of it, it’s important that Dear MxM is neutral to all this and hence the rest of the space must be devoted to our Q & A for the week,

 

Do read on and who knows, you’ll probably enjoy it!

 

How much does a newspaper actually cost after all the printing, salaries etc

Thanks for writing in with a pertinent question. I shall take the liberty of answering this in fair detail, to be able to give our readers a quick overview of ‘media economics’.

 

Unfortunately, reader’s rarely get to know costs, since they pay a pittance to buy their copy of the daily newspaper. The reality, is that newspaper production is a highly cost intensive manufacturing process, right from the huge investments required in real estate, printing machines , staff etc .

 

To add to this, the DVC (Direct Variable Costs) are prohibitive, what with newsprint rates spiralling every few months thanks to the infamous dollar:rupee equation resembling an ECG (Electro-cardiogram) graph!

 

The long and short of this is, that publishers end up spending anything from approximately 30 paise per page (one sheet of your newspaper = 2 pages) to as high as 2.00 per page for the high end glossy /art supplements that accompany the main paper. These rates are indicative and depends significantly on the number of copies being printed.This essentially means that, higher the circulation (sales) the lower the cost per copy.

 

Hence a standard 20-page newspaper in two sections (16+4) would cost nothing less than

 

Rs 8-10 per copy, assuming the paper you buy has a large enough circulation. So, when you buy your paper at Rs 2.00 – 3.00 don’t forget,  the cost is being cross-subsidised by the advertising it publishes.

 

Incidentally, India is one the few markets across the world where you can still buy a newspaper at a rock-bottom cover price. Therefore, the good thing to do, would be to thank all the advertisers and say a prayer for them day after day. May they prosper!

 

Amen.

 

At a recent sales conference, there was a huge debate on my channel offering massive discounts on bulk buy of GRPs. Two of my seniors locked horns because one was in favour of offering discounts and the other said it’s fatal to do so.  What according to you is the right path?

Honestly, I don’t think there is a bulk buy that happens in any business without a decent discount. It’s essentially akin to economies of scale and thus pretty much an accepted form of clearing inventory, be it media, or the consumer goods’ industry.

 

Having said that, it’s prudent to have clear justification for the discounting procedure at every level to avoid any arbitrary waiver’s. The discounting must be available to any client and must ideally be purely business linked.

 

A bulk-buy rate manual is the kind of transparency required to ensure success as well as high work  ethics.

 

There is no right path. It’s for us to dig our own path depending on the environment and the business we are in. Yes, being credible, ethical and fair are qualities that make that ‘rare’ great salesman!

 

Unfortunately, a dying breed. No wonder than that, the chair earns more respect today than the person who sits on it.

 

Yet, I pray that someday this equation will change for the better.

 

My daughter has a choice of majors for BA. She wants to get into digital media or broadcast. What subject should she major in?

Thank you madam for writing in to Dear MxM. Ideally I would have liked the list of subjects available for her Major in the Bachelor programme she is currently pursuing.

 

Nevertheless, I shall give you some options which will hopefully help her take a call. She could look at mass communication,  communication studies, creative writing etc if she is keen to pursue content or related areas.

 

If it’s marketing and sales: business management , business studies, economics etc would help her build perspective.

 

Ideally if she’s decided on media, it would advisable for her to look at a good post-graduate programme offered by one of the leading universities. There are excellent programmes in media and communication where she can take her appropriate elective and move ahead into the industry.

 

For a start, she could also do an internship or two with a media/ digital company, in order to get first-hand experience of the industry. I am suggesting this since, invariably at graduation level there is always dilemma on the ideal career. Hence, nothing better than getting a taste of it before going ahead.

 

I take this opportunity to wish her all success. Dear MxM would be happy to guide her, should she require any further advise on the industry.

 

Sir, don’t you get bored answering all our often-inane questions?

Ha Ha! Now this is probably the best question I have received this season!! In the best interest of our readers, I shall desist from being overly truthful on this one 🙂 Yet, like I always say, what has to be said, must be said!

 

Indeed I do, so you jolly well send me some good questions young man!  Having said that, I must add that we do some amount of sieving to ensure we pick interesting /relevant  /urgent questions over the others.

 

Answering questions and being of help is our raison d’être and hence each one is important for us. However, this column wasn’t created to answer only academic queries like which college should I apply to? Or which company offers a good salary for freshers? etc.

 

We strive to provide a sounding board to the fraternity at all levels, through our advice and views in Dear MxM week after week ….

 

Our humble mission is to mitigate concerns and conflicts, build positivity and impart the little knowledge that we believe we possess, in the business of media, advertising and marketing…!

 

Thank you dear readers for being with us week after week, and taking time off to write back with your opinion’s and suggestions. We sincerely value your feedback and hope to continue to live up to your expectations as we go along.

 

And, yes, put that laptop away and enjoy a terrific weekend with loads of great food and good cheer. To hell with work and all that goes with it. Take a break, Do nothing !

 

As always, feel free to inbox your questions on editor@mxmindia.com with ‘Dear MxM’ in the subject line and then rest easy while we do the rest !

 

’Dear MxM’ simply because, we care !

 

Jaisurya Das, the maverick media-evangelist, eats, sleeps and romance’s brands. His cerebral consulting interventions are aimed at making brands powerful and sustainable. He is also the Contributing Editor of MxM India. The views expressed in this column are his own.