Ifra Managing Distribution Conference - ntSummaries of day one
Ifra Conference: Managing Distribution
31 May-1 June 2007, Hotel Barceló Eresin Topkapi, Istanbul
100 participants from 29 countries
Conference moderator: Mike Newman, Group Circulation Director, Associated Newspapers, U.K.
Summaries by Mari Pascual, Senior Editor, Ifra Publications
Thursday, 31 May – first session: Subscription-Based Distribution Models
Focus on Turkey
Erdem Top, Deputy President, Dünya Group, Turkey
Top’s presentation explained to the participants how his newspaper group, Dünya, has managed during the last 27 years to bring newspapers to subscribers on time every morning.
Business newspapers all over Europe have adopted two common traits: salmon-coloured paper and heavy reliance on subscriptions. When Dünya, an economic paper, started in 1980, it took the same approach.
Dünya subscribership has increased steadily, so distribution has become more complex. “We have regional offices in many places all over Turkey. These offices not only distribute our newspapers and magazines, but distribute foreign magazines and journals as well, and do various subcontracting work. In Istanbul alone, we have 12 offices, and the total in Turkey is more than 60 offices,” explained Top.
This system has its advantages (directly controlled systems, successful distribution for 27 years) but it has a major disadvantage: high personnel costs, because of the large staff. Dünya intends to start a route optimisation program based on GPRS to compete with the Turkish Post as soon as this sector is liberalised in the country.
Subscription-based distribution and collection of Turkey’s leader newspaper
Arslan Gül, Business Development Director, Zaman Media Group, Turkey
Average national daily newspaper circulation in Turkey is around five million copies, a figure that ranks the country 13th globally. In Turkey the single-copy distribution model is dominant, accounting for 78 percent of all copies sold.
The Zaman group owns newspapers, magazines, a news agency, and a distribution company, Cihan Media Distribution, a consolidation of 200 companies that had been distributing the Zaman group’s products for 20 years. “Apart from distributing, Cihan collects the subscription fees on a monthly basis by visiting subscribers. Eighty percent of the total collection is in cash,” explained Gül.
The company also distributes other types of products, such as credit card reports for a bank. Thanks to the IT system, third parties can follow the status of their products’ distribution at any moment. This IT system is fed with information provided by bar codes that are read at every step of the distribution process.
“Our distribution is very complicated, because we offer our subscribers the chance to receive the newspaper along with a magazine,” he said. “At Cihan there is no constant salary system for personnel. They all work with a bonus and penalty system. This encourages our staff to distribute as much as possible and efficiently and to try to get more subscriptions.”
Quality indicators and route optimisation
Marcello Moraes, Infoglobo Comunicações SA, Brazil and Ricardo Hoerde, Vialog, Brazil
Newspapers, not only in Brazil but in the rest of the world as well, have become more and more sophisticated, segmented and complex, and they are accompanied by commercial supplements most days of the week. At the same time, customers are more demanding and less faithful, and have more and more options on the market.
For Infoglobo, which publishes O Globo, Extra, and other titles, those changes posed a series of challenges at the distribution level. There is a need to continuously improve the quality of delivery to keep customers satisfied. “In Brazil, streets and roads are in poor condition. In our area, Rio de Janeiro, where 12 million people live, urban logistics are very complex. As a consequence, operational costs tend to increase, and the challenge is to improve quality of delivery and at the same time to reduce the costs,” said Moraes.
Of the 300,000 copies O Globo sells from Monday to Saturday, 250,000 are subscription copies. Thus Infloglobo has a program to measure delivery satisfaction. Indicators such as whether the newspaper was delivered, whether it was on time, and whether it arrived in good condition are checked daily. Using that information, Infoglobo optimises deliveries. Every year it has managed to reduce the numbers of errors and complaints.
Zero Hora, part of the RBS group based in Porto Alegre, relies on route optimization software to deliver newspapers efficiently every day.
Before adopting that software, Zero Hora had to define a series of parameters to be taken into consideration:
- Standard arrival time at the distribution centre,
- Handling time,
- Cargo limit (copies),
- Average service time,
- Average drive time, taking into account speed limits on various streets, and
- Delivery deadline.
“RBS works with 36 distribution centres, categorised as small, medium or large, depending on the number of copies each one handles every day. At the small centres, we don’t run the route optimisation software. At the medium-sized ones, we do it once every two years and in the large ones, once every year, as the subscribers don’t move so often,” said Hoerde.
Since April 2005, when the route optimisation project started, distribution costs have fallen significantly. “Other benefits have been less time needed to plan the routes, better productivity, fewer carriers to manage, and the replacement of carriers without trouble,” Hoerde added.
Session two: Single-Copy Distribution
Distribution of promotional items
Tonci Barisic, Head of Special Products, Vecernji List, Croatia
With more than 6,000 sales outlets, the Croatian newspaper Vecernji List sells 135,000 copies per day. These issues are accompanied by books, DVDs, CDs, or gadgets when the newspaper offers a promotion. “We distribute through two different companies. The geography of the country (which is elongated in shape and has many islands) very much complicates newspaper distribution,” said Barisic.
“The main problems thus are widely dispersed distribution, the difficulties in offering targeted distribution, and the fact that many of the unsold and returned copies and promotional products come back damaged, so we cannot try to sell them again or reuse them,” Barisic said. To reduce distribution costs, Vecernji List has tried to get sponsors for their promotions. “Our main goals are creating added value through products, supporting end users’ loyalty, optimizing marketing costs, finding more channels for distribution and making our clients happy,” he said. Vecernji List believes that readers’ loyalty increases when quality products at affordable prices are offered to them under the brand of the newspaper.
Forecasting models
Rafael Sanguino, Director of Distribution & Marketing, La Voz de Galicia, Spain
The success of La Voz de Galicia is based on being fully connected with its territory. Unlike in some other European countries, 80 percent of newspaper circulation in Spain comes from single-copy sales. Therefore, “Our major concerns are to deliver the right number of copies to each newsstand, avoid that some kiosks run out of copies, and reduce the daily number of copies returned unsold from newsstands,” explains Sanguino.
To be accurate, La Voz de Galicia has adopted forecasting software from the company Bayes Forecast. “By using regression analysis, it is possible to understand the past to estimate the future. Sales are just a calculation from a dependent variable, depending on several free variables; a mathematical matter. So we are using Fornews, a system that looks at the main factors that push sales up and factors that make sales fall, plus reviews of returns and availablity for every day and for every kiosk, compared with the target values. Our hope was that in the future we would not be depending on subjective decisions taken by individuals, but on facts,” he said.
Factors such as promotions, the character of the news, and the fact that a kiosk closes because of holidays have an influence on sales. Thus all these indicators are analysed by the software. The results could not be better: La Voz de Galicia manages to save about 130,000 euros per year thanks to reduced returns, at the same time increasing availability in the kiosks and therefore sales.
Launching a new ‘compact’ national title
Frank Ecker, Distribution Manager, Zeitungsgruppe WELT/Berliner Morgenpost, Germany
In a mature market, where newspaper circulation has been falling steadily for several years, the publishers of the German newspaper Die Welt started a compact edition of their flagship in 2004, called Welt Kompakt. Influenced by the successful free papers, Welt Kompakt has a low pagination -- 32 pages -- and appears only from Monday to Friday. “Under the slogan ‘Big news. Small size.’, the new edition was promoted and introduced to the public in Germany with some advertisements showing relevant international politicians and football players portrayed as children,” explained Ecker.
Although it is national in character, at the moment, Welt Kompakt can be purchased in 18 cities in Germany, all of them located in areas where the group has printing plants or subcontracted printing plants. This summer, Welt Kompakt will be introduced in three new cities. “In Berlin, where we are one of the market leaders and we can distribute on our own, the subscription costs 9.90 Euros, while in Hamburg and Frankfurt, where we have agreements with other companies, we charge 12.90 Euros per month, in an effort to rationalise costs,” said Ecker.
Welt Kompakt started using newspaper racks in Munich, where there is a 40-year-old tradition of using this means to sell newspapers, although it was feared that kiosk operators would resent this strategy. Experience showed that sales in shops kept increasing anyway, which was a surprise for the distribution department. “News racks have been maintained mainly for young readers all over Germany -- despite the large numbers of copies that are not paid for -- because youngsters do not go to the newsstands as often as older generations do; nor do they like to subscribe to a newspaper. These racks are the way to attract them on their way to work,” he said.
Thinking outside the box
Hakan Urhan, Managing Director, YaySat, Turkey
“YaySat achieves successful distribution using three steps: Collecting data (for this we visit our selling points between 9:00 and 12:00 every morning and check the numbers of papers sold, and to see whether they run out of copies); evaluating that information; and effectively processing the information received,” explained Urhan about this Turkish distribution company, which works with different publishers in the country. For this purpose, the company uses a forecast system developed in-house that is intended to minimize return and sell-out rates, to reduce the title unit costs for their publisher clients.
“Many people say routing is the most important part of distribution,” continued Urhan. In order to achieve better optimization of routes and success in the distribution sector, YaySat developed its SAP software to be able to monitor 1,250 routes every day, which mean approximately 50,000 km. Also, and again to improve routes, YaySat keeps analysing such aspects as the product distributed, the outlets (supermarkets, kiosks, stores), and the way the orders are managed (by subscription or directly at the newsstand). YaySat also distributes non-media products, from cards to chewing gum, that are sold in the same outlets as newspapers, in order to make more profit.
End of the first conference day.
> To the summaries of the second day
Kein Kommentar hinterlegt.
