Challenger takes on local champs

Can the "Dainik Bhaskar" group best "Gujarat Samachar" and "Sandesh"

On Saturday, June 21, the two-kilometre stretch from Ahmedabad's Fun Republic multiplex, to the huge office and printing press of "Divya Bhaskar" near Makarba on the Sarkhej-Gandhinagar Highway, was dotted with young boys wearing blue T-shirts and yellow caps embossed with the "Divya Bhaskar" logo.

Stretch limousines were parked at least half a km before the office premises. "It was enough to send a message to both the owners of "Gujarat Samachar" and "Sandesh." The war has just begun," noted a senior police officer who oversaw the VVIP bandobast.

He's right "� India's fiercest newspaper battle is on. The Madhya Pradesh-based Rs 800 crore Dainik Bhaskar group is challenging the 72-year-old venerable and cash rich "Gujarat Samachar" (circulation: over 10 lakh) run by Lok Prakashan Ltd, and "Sandesh" (circulation: 7.6 lakh), on their home turf.

It has launched a Gujarati daily, "Divya Bhaskar," for Rs 45 a month "� and triggered off a price war, a war of words and schemes to attract readers.

Market leader "Gujarat Samachar" has not responded to "Divya Bhaskar's" low price, but Sandesh has matched it. The paper now costs Rs 1.50 per day, while "Gujarat Samachar" is still priced at Rs 2 except on Wednesday and Sunday when its cover price is Rs 3.

Asks Lok Prakashan Ltd's managing director Bahubali Shah: "Why should we slash our cover price, that too for a newcomer? We have remained with our price of Rs 75. In fact, our circulation has grown in the last one month."

"Gujarat Samachar" may not have lowered its price, but it recently launched a scheme whereby anyone who pays a month's subscription charge of Rs 75 gets a plastic bucket worth Rs 75. "So it is free. But they are not admitting that they are trying to woo readers," a Sandesh official says dryly.

The Bhaskar group has a track record of having successfully taken on other newspapers in the Hindi belt.

In the 1980s, Dainik Bhaskar was just another small-town newspaper published from Bhopal and owned by businessman Ramesh Chandra Agarwal who had interests in solvent extracts, textiles and vanaspati.

However, today the paper boasts of a circulation of 19.67 lakh and a reader base of 1.34 crore in Madhya Pradesh, Rajasthan, Haryana and Chandigarh.

In May 1996, Dainik Bhaskar took on Rajasthan's newspaper market leader "Rajasthan Patrika," owned by Gulab Kothari's Rs 400 crore publishing company.

To succeed in Rajasthan, Bhaskar focused on attaining citywise leadership, instead of embarking upon a statewide blitz. A massive pre-launch survey was followed by a product that was promoted as the smarter alternative. It was also priced 33 per cent lower than "Rajasthan Patrika."

Before being rolled out in cities like Jodhpur, Udaipur, Ajmer and Bikaner, "Bhaskar" captured Jaipur within three months of its launch. In three years, it managed to topple "Patrika" from its leadership position.

The paper then turned to Haryana and Chandigarh, both of which had high per capita income populations. The Rajasthan strategy was repeated with several lakh households being surveyed for their expectations of a newspaper.

Earlier, Dainik Bhaskar group marketing director Girish Agarwal admitted that the paper's entry costs in new markets were very high "� the group invested close to Rs 60 crore in Rajasthan and Rs 20 crore in Haryana.

The group is sinking even bigger bucks in Gujarat. It's invested an estimated Rs 100 crore on setting up a state-of-the-art printing press with seven machines, two of which are solely devoted to magazine printing.

"We have installed the machinery for future growth as slowly we will be spreading out to other major cities in Gujarat. Right now, from one single Ahmedabad edition, we are sending the newspaper to at least 20 towns in five districts," says Girish Agarwal.

Besides, a substantial budget has been set aside for marketing "� Rs 12 crore was apparently spent on the pre-launch publicity alone.

Still, the Dainik Bhaskar group may have its task cut out for itself in Gujarat.

Both its Gujarati rivals have deep pockets and staying power. Though no figures could be obtained from Lok Prakashan, "Gujarat Samachar" is estimated to make a profit of close to Rs 58 crore on a turnover of Rs 240 crore and is well entrenched in the state, with editions in Ahmedabad, Vadodara, Bhavnagar, Surat, Rajkot and Mumbai.

Similarly, "Sandesh" from the house of Sandesh Ltd is also published at these cities. Sandesh Ltd made a profit of Rs 24.5 crore in 2002-2003, up from Rs 18.3 crore in the previous year. It reported a turnover of Rs 131.18 crore and reserves of Rs 120.75 crore in 2002-2003.

So despite its ambitions, toppling "Sandesh" or "Gujarat Samachar" won't exactly be a cake walk for the Bhaskar group.

To be sure, Agarwal is not unduly worried about their financial muscle, armed as he is with another Rs 100 crore for investing in Gujarat in the next two years.

Though Agarwal declines to divulge whether the group will be launching editions from other towns, sources in the company say that "Divya Bhaskar's" next destination will be either Surat or Baroda.

"The group is finding it hard to decide between the two cities as, being the diamond trading centre, Surat is cash rich, while after Ahmedabad, Baroda is the most affluent city in the state," a source says.

So can the Bhaskar group repeat its success in Gujarat? Agarwal, of course, is confident that it will.

"Like a school student who prepares before sitting for an examination, we also have come prepared. We've barely launched the Ahmedabad edition and we're talking about growth," says Agarwal.

Adds Ramesh Agarwal, chairman of the Dainik Bhaskar group: "We are not targeting existing readers. I foresee Gujarati dailies having a circulation of at least 50 lakh, including Mumbai, in the next four years. `Divya Bhaskar' will get at least 25 lakh of this."

Girish Agarwal, meanwhile, claims that the newspaper has been designed keeping the requirements of readers in Gujarat in view.

"We work from ground zero, understand people, their hearts, habits and everything and then start working," he says. Literally. Ramesh Chandra Agarwal's three sons, Sudhir, Girish and Pawan, have been camping in Ahmedabad for the last three months. And today all of them can understand Gujarati too.

"That's how we funtion. Before our Rajasthan launch, the entire family lived in the state for about a year," says Girish Agarwal.

"Divya Bhaskar" is a 16-page paper, with 10 pages in colour. It promises to deliver a colour supplement every day of the week on subjects like fashion, films and education.

The idea, however, has already been preempted by its rivals "� they launched colours supplements, just before the Bhaskat launch, for the first time in their history.

Today, "Gujarat Samachar" offers a glossy supplement thrice a week. "Sandesh" has introduced a two-page colour pull-out in English on fashion and lifestyles.

Besides, "Sandesh" has launched a lucky draw scheme. Readers have to cut out a small column from the front page every day and stick it on a larger frame provided once a week. Prizes worth lakhs of rupees lie in store for winners.

"We recently launched another scheme for our readers. Our staff makes surprise visits to homes in Ahmedabad and asks for a copy of the day's "Sandesh."

If it's there, attractive gifts are given instantly. The scheme has already got a tremendous response from our readers," says a "Sandesh" executive. The company's promoter Falgunbhai Patel was not available for comment, despite repeated attempts to contact him.

The war among the three biggies will now be fought for Gujarat's Rs 180 crore advertising market. "Gujarat Samachar" currently gobbles up Rs 65 crore of this, while "Sandesh" earns about Rs 32 crore.

The senior police officer who handled VVIP security for the launch party will, perhaps, be among those who keenly watch this slugfest.