THE PRICE WAR IN GUJARAT NEWSPAPER INDUSTRY

Dainik Bhaskar, a leading business group in India, launched a Gujarati language newspaper – Divya Bhaskar, in Gujarat in 2003. The caselet examines the price promotion strategy adopted by Divya Bhaskar and the far reaching changes it sparked in the Gujarati newspaper industry.
Issues:
» Consumer survey and its relevance in pricing and promotion

» Price promotion strategies in the newspaper market

» Competitive strategies in the newspaper industry
In Gujarat, an Indian state, about 2000 newspapers were published in various languages, primarily in Hindi, Gujarati, and English in 2001. Two Gujarati newspapers, Gujarat Samachar and Sandesh, were the market leaders. Gujarat Samachar, started in 1932, had a circulation of 1.47 million during the period July to December 2002. The circulation of Sandesh for the same period was 0.75 million copies. These newspaper brands were well established in the market and they enjoyed customer loyalty.At the beginning of 2002, the Dainik Bhaskar Group (Dainik), a leading business house in the country with a strong presence in the print media industry, decided to launch a Gujarati newspaper Divya Bhaskar in Ahmedabad, the capital of Gujarat…

Questions for Discussion:
Divya Bhaskar earned the distinction of being the first newspaper in India to reach the number one position in a city on its opening day. How far do you think the price promotion strategy adopted by the newspaper helped it to gain this unique position?

How did competitors respond to the entry strategy of Divya Bhaskar?