Brand Equity and Invitation Pricing: Strategies of our Times

Marketing to Win

( Pic Courtesy: Book Cover of ‘Marketing to Win’ by Satish Mehta, Pearson)

“Market share = share of conversations”; thus read one of the advertisements in The Economic Times celebrating 30 years of Brand Equity, a pullout that comes every Wednesday along with The Economic Times (ET, hereafter), Asia’s largest business newspaper. After all, aren’t markets about people and people about conversations? From a brand management perspective, a successful brand is all about being at the core of the conversations of its target segments that resonates with the brand values. The sharper the conversations around the brand, the stronger is its brand equity. Therefore, this year when ET celebrates its sub-brand ‘Brand Equity’, it is worthwhile to revisit and reflect on the creation of one of the most iconic print media brands that served the overall business objectives of its creator; Bennett Coleman and Company Limited.

Looking back, one gets transported to the late 80s when business news meant the ET and a few magazines like Business India and Business World. That was pre-internet era wherein content meant print and print only. As business students, we would scan through the pages of ET and these magazines to get some insight into the marketing news. That was difficult till ET introduced a four-page pullout on glazed newsprint called Brand Equity. Those four pages carried stories on brand launches, creative communication, advertising agencies, and consumer marketing. In 1989, ET used to cost Rs.4, however, on Wednesday (which carried Brand Equity) it was priced at Rs2/-. Students found that much affordable and it was a common sight to see a copy of ET in hostel rooms, every Wednesday. My association with ET went beyond being a reader. I started working for the Times Group in Results and Market Development department which was responsible for increasing the readership of all newspaper and magazine brands owned by the group. My marketing education beyond the textbooks began soon after when I would get the opportunity to listen to some of the finest marketing minds of our times. Two fascinating strategies that the company implemented very successfully was about the Brand Equity and invitation pricing; both related to each other.

ET and the advertising world

In the late ’80s, advertising budgets had a strong skew towards general-interest English newspapers such as The Times of India, Hindustan Times, The Hindu and the business newspapers as a segment was in an initial phase of introduction. The reasons could be easily understood in quantitative terms; the reach and readership of general-interest English dailies were manifold higher than that of a business newspaper. However, there was one more reason that kept ET out of most media plans. Young media buyers and account managers were busy delivering a larger audience to their client’s brands and it was a win-win for the agency and the clients. The quality of the readership in terms of the demographic profile was very strong for ET but the brand was not in the consideration set. ET needed to build a strong connection with these young media planners and make them excited about the quality of the audience. Brand Equity was conceived as a weekly pull-out which was to carry articles written by advertising and agency professionals. When it was launched, it’s four pages became a playground for these professionals who would share their content mostly focusing on advertising and marketing. While at one hand it achieved the objective to connect with people who ran the advertising business, on the other hand, readers loved the content and would wait for ET on Wednesday (with Brand Equity). This was the starting point of another strategy that would change the print media business for many decades to come.

Readers, you got an invitation!

An interesting part of the media folklore goes like this: Samir Jain, Vice Charman, known as VC in the Times Group, was once on way to his office from his Alipore residence in Kolkata. He noticed a long queue in front of the Alipore Zoo. This was his regular route to the office but he never noticed such a big crowd waiting to go in. The driver sensed his curiosity and informed him that the entry was free every Monday. Considering the small entry fee that zoo charged those days, free entry did not justify the swell in the number of visitors to the zoo. However, this intrigued him and the idea of ‘zero-price high attraction scenario’ stuck on.  With the launch of Brand Equity, it was time to experiment with the idea. Many executives looked at this idea as superfluous – can reducing Rs.2/- on a cover price of Rs.4/- get more readers for a premium product like ET? Unlikely, many predicted. However, this idea was to be pursued and the legendary marketing genius Satish Mehta who was the Director Marketing (fondly called MKD) thoughtfully gave this strategy a name: Invitation Price. Based on the Pavlovian theory of conditioned learning, he expected that the stimulus of low pricing would elicit more purchases on the days of lower prices. And it worked, and how! Sales of ET on Wednesday swelled up (almost doubled) and there were a large number of new readers (that included me and my batch mates) getting hooked to the paper and thus reading it on other days as well. The zoo intrigue fructified and it set the stage for a pricing revolution in the print media business. It’s ironic that despite the price elasticity on display, many industry stalwarts did not take a note of it till 1994. That was the year when invitation price was launched for The Times of India(TOI) in the Delhi market. The competitor could not sense its long term impact and that started TOI’s journey towards leadership in the Delhi market which it attained in 2003, after a long battle of nine years. By that time invitation pricing was the norm in the print media business.

Almost all newspapers would have used this pricing strategy to attract new readers. Times group almost perfected the art and science of invitation pricing that helped it enter new markets with new products such as Ei Samay, a Bengali daily launched in Kolkata in 2012. Vinay Singh, then EA to MKD, who was my boss for several years once told me,  “when we were going ahead with the new pricing and MKD gave this a name- Invitation Pricing, VC was very pleased. He said only MKD could have thought of such a name for this pricing strategy.”

 

 

44 thoughts on “Brand Equity and Invitation Pricing: Strategies of our Times

  1. Samarth Singh

    Very insightful article introducing two concepts of marketing for me.. brand equity and invitation price.
    I can relate the latter to another example of how jio penetrated and later on rules the entire Telecom industry by giving free calling and internet service when it was launched.

  2. Sanket Thorve

    A well executed strategy and a brilliant idea in those times which turned in favour of Times group and sustained it in the long term. Pricing strategies can be tricky. The content provided at the cost was groundbreaking and attractive. And the invitation pricing was infact inviting.

    I could relate this to the pay what you want strategy PWYW which is employed by several organisations to lure in attract customers, mostly for digital products, but fail to survive in the long run. Panera bread could be one of the examples.

    But I believe the pricing strategy of Times group was well planned and executed which yielded them excellent results in the long run.

  3. Pranav Khaneja

    The article brilliantly articulates the introduction of invitation pricing, and how it set a precedent for companies to follow. It serves as a form of disruption, very similar to what Reliance Jio managed to achieve in 2016. Although the marketing action is not a new one, it was something which no one chose to explore – citing the inability to carry on with such low prices. In today’s market, especially in India, penetrative pricing has proven to be a successful mantra, hence the companies should find an opportunity to exploit it when they find an opening for the same. Deploying this pricing strategy can be a sure shot way to land a loyal customer in the long run and establish your foothold in the market.
    That being said, it is indeed surprising why no other news house publishing company managed to pick on this. Any company, when it sees its market share gradually slipping away, first tends to respond by reducing the price and keeping the cost in check. The go-to response not being adopted by others is something hard to digest, the only reason seeming legitimate being the lack of research and reviewing its sales data. Reviewing your marketing strategy as well as keeping a tab on the competitors’ plans tends to be a primary evaluation point for companies,
    something the rivals clearly missed.

    1. Piyush

      Nice way of luring customers with limited time low price/free subscription to latch their attention. The introduction of invitation price by Times group was marvelously planned and executed.

  4. Rishabh Sanjay Bathija

    An idea to expand the customer base by discounting the price of a product that was thought to have inelastic demand shows how important it is to actually know people’s reactions while marketing and that the big picture shall be considered. Very informative article

  5. Ankita Agarwal

    A demand was stimulated which even the consumers did not know about. Changing the marketing strategy by reducing price of the newspaper made the people who did not read it before to demand it and finally getting hooked on it thus increasing the sales. This thus created the concept of invitation price which is now being widely used in the industry.

  6. Shreyas Seshadri

    A well-constructed article showing how the TOI group has managed to introduce and make their ET brand a market leader over the years by deploying a simple yet effective strategy of Invitation pricing which follows the law of demand. The sub-brand ” Brand Equity” has been symbolic as it not only has been taking the creative ideas and advertising communication from marketing gurus to the young readers, it has been instrumental in creating positive brand equity for ET which has helped it to be what it is today. The success of Brand equity can be attributed to the understanding of the market and knowing the demographics of the target audience.

  7. I think, this model would have been implemented in other newspapers and magazines of the Times Group. And the first mover’s advantage would have helped them post exceptional no. of readers (highest in the country) in the subsequent years.

  8. Lokinder Singh Mittal

    The blog very well explains the both the strategies with examples and shows us how pricing is important for any product to get sales.
    Even a small change in price for now can be very well effective in long run
    It also shows us how a small observation from around us can lead us to take a effective solution.

  9. Prashant Boenpally

    A very good article covering two of the marketing topics. I wonder can invitation pricing be compared with market penetrating strategy or is it part of that.

  10. Siddharth Rakundla

    A brilliant article which dives deep into marketing strategy adapted by ET, which has eventually led the newspaper to become one of the leading business newspapers in Asia today. The post takes us into the journey which is an amalgamation of excellent marketing approach as well as belief in their own content to carry out such a risk when no one else believed.
    The introduction of invitation pricing by Times group in the 80’s has paved way for various new industries to penetrate into new markets following the same approach which has proved fruitful in long runs.

  11. Sonal Sahni

    It is very rightly presented in the above piece of writing that a brand’s success depends on the brand being the talk of the town, especially among the target segment, thus, leading to a stronger brand equity. The concept of “Brand Equity” by ET catered the needs and demand of business students by bringing in on all the information about brand launches, advertising on one common platform – the 4 page pull-out by ET. In addition to this, the company bought about the Invitation pricing – lowering the price to invite more readers, thus, expanding the target segment. The brand sensitized with the emotions, the thoughts of the masses { VC’s experience at the Alipore Zoo } and used it as a tool in order to expand their customer base. Timely understanding of the needs of the masses and a perfect execution to the ideas helped the brand reach a wider audience.

  12. Saksham Arora

    Nice article! Starts by stating the importance of communication amongst consumers in building a strong brand image. Introduces to the business newspaper market in 80s and highlights that ET was not able to build a brand image despite a low competition in market. Points out the consumer segment they were missing out on.

    Finally it shows how invitation pricing strategy (lowering the price of the product to increase the customer base) was able to stimulate a shift in the demand of product. They were able to attract the right customer segment and increase its popularity amongst them.

  13. Utkarsh Haryana

    I believe that the strategy implemented by the Times Group in that era is still relevant three decades later, which clearly showcases how effective it was. They took the opportunity and created demand in a segment which was not explored by any of their rivals, leading to an increase in the customer base. Invitation pricing helped them expand the market share and emerge as a leader, highlighting the fact that having the knowledge of what your target audience wants and how much they are willing to pay for it gives you an edge over your competitors.

  14. Manash Prateem Bhuyan

    A really nice article which dives deep into a marketing strategy that was not explored for a very long time in Indian market. I could related to the entry of UBER in the cab business in India and JIO into the Indian Telecom sector with the similar but more aggressive strategy in 2016.

  15. Harsh Parikh

    This article wonderfully describes that how a sub brand can be used to increase the brand equity of the parent company. Also an example that how to reach out to the customers by penetrating into the market by providing the product at a much lower rate also known as the ‘invitation price’.

  16. Vibhor Singh

    1. A very informative article, covering two of the crucial aspects of the management in general and marketing management in specific. The first being that as a manufacturer/ producer, we must build a feature in our product which the customer could be desiring for but unfortunately could not get from any other manufacturer. As in the given case, the ET started a sub-brand of its own called ‘Brand Equity,’ focusing primarily on the marketing side of the business. Since earlier, the typical readers of the ET were not getting any such feature, in that case, they would have to scan the entire newspaper to get a glimpse of the brand launches, creative communication, etc. making things a bit cumbersome. But launching the sub-brand pertaining to marketing made the life of its readers much simpler, enabling the ET, as a brand, to build a sharp brand image in the minds of its readers.
    2. The other crucial aspect is that of pricing your product intelligently / interestingly, as called invitation pricing by ET’s management. The 2nd aspect focuses on the fact that offering your product with a desirable feature(s) and that to at a discounted price could turn your product into an instant hit in the market. The overall impact of these strategies is that a person who earlier was not even considering your product, might develop an interest and could ultimately become your future customer.
    3. These two aspects of marketing management could very well be understood by taking a recent example of a mobile phone manufacturer-‘ Xiaomi.’ Xiaomi, as a manufacturer, was very much successful not only in identifying the gaps in the Indian mobile phone market but also filling them up intelligently.
    4. First, they launched the phones with the feature and quality, which were highly desired by the general public.
    5. Second, the prices of their phones were fraction to that of the high-end phones.
    6. These two recipes were sufficient to make them the market leader in the industry instantly. Thus achieving voluminous sales in a fraction of time.

  17. SHUBHANKAR VASHISTHA

    This article tends to reflect that there are no set specific rules in marketing. You get the ideas from your observations and experiences. A wonderful observation by Samir Jain, has led to the birth of ‘Invitation price’, which increased their customer base. Truly wonderful.

  18. Akshay Mishra

    A Creative mind never stops thinking. It would have been easy for him to be worried and be thinking about getting late instead, he picked up a fruitful idea on the way.

  19. Ayushi Tyagi

    Such an insightful article which shows the importance of pricing strategies that are extremely important for sales of a product. By lowering the price of the product to attain more demand from customer is a great way to increase sales. The article has covered important topics which are brand equity and invitation pricing.

  20. Ullas Wadhwa

    The blog gives us an insight into how a small realisation can have an enormous impact on an business….. Also it tells us that no matter how simple a solution is, it can have humongous impact on a business. Predatory pricing was kind of new at that time but must not have surely been unheard of or not thought of…. But what made ET stand out is the keenness they showed towards a simple yet impactful solution. Moreover, the strategy they employed to get close to advertising companies was a smart move …. It also tells that how a brand should project its trajectory and how a brand should keep on evolving to appeal to the masses at different point of times….

  21. Sudhansh Shastri

    This article intelligently shows how a new pricing strategy can influence the reach of the product. In this case, ET already had excellent content, but the main problem was to increase its reach, and that was achieved by providing it at a low cost for a day in the week, and then consumers started buying it regularly.
    I think, Invitation pricing strategy bears a resemblance to the well-known concept of providing a free trial period, which is prevalent in the OTT industry nowadays.

  22. An article that makes you think that some ideas, that might seem ludicrous to those around you can also hold the groundbreaking potential, provided one has the ability to look and gauge at its long term effects and impact capability.

  23. Akshay Sridharan

    Knowing your end customer is a primary requirement for any premium and offshoot product ie. business newspaper in the print media industry. Catering to the specific needs of consumers and also maintaining qualitative content helped the brand establish a strong connection. The content from these newspapers had helped many young Indian planners and account managers maintain an edge over their peers and that is why “Brand Equity” became a real success story.

    A typical example of a marketing strategy, formulated against the general perception of a premium product must always be priced high: Invitation price. The long term benefits of invitation price were not realized until the late 1990s when TOI implemented it and yielded large returns, establishing itself as the market leader.

  24. Aniruddha Chougule

    Invitation Pricing- A daring and flawlessly executed idea by Times marketing department.
    Alongwith the strategy another important prerequisite for implementation of Invitation Pricing is guts. As long as I can remember after Times only Reliance Jio has attempted such a strategy and both are now market leaders.

  25. Chirag

    A insightful article that delves into how the pricing and marketing strategy adopted by Economic Times to bolster its consumer base. When no other competitor believed in the price elasticity of English Dailies, the foray proved to be fruitful for ET to gain a significant amount of loyal customer base, and set foundations for ET to be a Market leader in the business segment. I would even like to present my experience, when I was in school, Times of India targeted school children as potential customers by offering specially designed prints for students. A student membership was enticing as it included either two movie tickets or a trip to water park. Apart from this the benevolent aspect was that they were trying to inculcate reading as a habit during the formative years.
    Even a price competitive strategy would work ET’s way in the digital medium since marginal cost of the newspaper would be negligible.

  26. Tarun Gupta

    The article perfectly pictures the art of creativity in marketing and demonstrates that sometimes motivation is around us we just need a clear vision to identify it-Zoo incident. Along with this the article also tells us it is imperative to be consumer-centric for product/service success as evident from the ‘Brand Equity’.A win-win situation for customer and producer also plays a key role in making product/service successful.

  27. Pratik Agarwal

    An insightful and well articulated article, providing a detailed view of how demand in certain sectors of market are Price Elastic irrespective of contrary conventional thinking of the market players. It has also shows that even though being a relevant brand offering a differentiated product, it can sometimes happen that a gap in communicating the knowledge of the products being offered by the brand in consumers may not result in desirable market share for the same. Here is then that out of he box thinking and disruptive market strategies like ‘Invitation Pricing’ can become the USP of the brand, thus giving it the first mover advantage as well as help in better positioning of the brand in Market Conversations.

  28. Aditya Gupta

    Very insightful article showcasing 2 brilliant concepts of marketing strategy, Invitation price and Brand Equity.
    It gives us an example of practical implementation of these 2 concepts by a well known brand Times Group.
    Also, while reading this, I could correlate both the concepts with Apple iPhone in segment of mobile phones, as iPhone has a brand equity in its segment and also to increase its market share, it introduced a new product which will give the same brand value in lesser price to compete with the other brands in lower price segment.

  29. Nishant Sharma

    Sir, this is an insightful article where we discussed about the Consumer Marketing done by ET.

  30. SHUBHANKAR VASHISTHA

    A simple observation by Samir Jain, that lead to the creation of “Invitation Pricing” strategy. The strategy proved to be a success for the company and is adapted even today. This further support the fact that India is a very price sensitive market.

  31. VIPUL KUMARq

    Two new concepts about marketing.Somewhat similar to what Jio did in the Telecom market (Demand was stimulated ). Free/small change of price draws more consumers, and it increases the sales too. A strategy that changed the entire model.

  32. Akanksha Singhal

    This article beautifully chronicles the origin of Brand Equity and evokes a nostalgic air. Affordability has long been the major factor for purchasing of newspapers in India. ET was the first to capitalize on this general mindset and successfully increase the size of its customer base. The above marketing strategies are truly worthy of being termed as ‘innovations’ because they were designed and implemented either for the first time or with a new orientation and dimension.

  33. Sejal Kataria

    Very well thought of marketing strategy. The use of promotional pricing in the form of an invitation price on Wednesdays would drive up sales and “Brand Equity” featuring articles by advertising and marketing professionals, i.e. the kind of content that would engage its target audience would create a strong brand equity to the extent that an invitation price could become superfluous.

  34. Anand Gopalakrishnan

    It is really astonishing that the concept of Invitation pricing, as coined by Satish Mehta, was inspired by such a random event. The impact of such a simple yet novel idea to attract the crowd essentially served as a game-changer.

  35. Harsh Vaidya

    A brilliant account of the strategy employed by ET. Since they were first movers, it was a big risk but the way they took advantage of the price elasticity is commendable. Introducing the concept of ‘Invitation Pricing’ helped increase the sales and also the brand equity of Brand Equity was bettered.

  36. Naveen Bhardwaj

    This article is full of knowledge, from reading this article, we get to know about various marketing strategies (invitation price). It tells the vision of great business leaders how they analyze things in daily life (crowds in zoos) and work. The team’s behavior was very good, like how, they turned the idea of ​​vice president into reality.Above all, learning all these things from a man who has worked in that team is very insightful.

  37. Nishant Singh

    It’s nice to see how the concept of invitation price is so adamant specially today with majority of the sectors. Shows marketing isn’t just something you need to google for 5-6 hours to come up with, it’s all around you, the customers you need to market to are all around you. Definitely would have revolutionized print media. One of those articles that takes you by storm and makes you ponder the infinite scope of learning marketing can provide you with.

  38. Thank you so much for your comments.

  39. Lakshay Narula

    Reading an insightful article like this with real life scenarios on – Brand Equity and Invitation Pricing enhances our knowledge about them and shows us how they are interrelated.
    Good quality content and better pricing strategies, has made ET, what it is today, one of the best in Asia.

  40. Dhruv Gupta

    A fantastic and informative read. For a person from this young generation, like myself, ET’s prominence in the market seems quite normal; it gives a perspective that it was not so, only some years ago. It was the visionary leadership and market understanding of great leaders which was able to breakthrough the barrier and manifest different opportunities that some thought was not there.

  41. Aman Fatehpuria

    Interesting Insight on how brand equity was brought to life & an introduction to an intriguing concept “Invitation Pricing” which is very much prevalent in even today’s world .Many business strategies such as those of Amazon’s Prime Membership,Alexa device’s to Jio’s Pricing regime to most of the cash fueled growth we see in a multitude of startups today can be associated with this concept to a certain degree.

  42. Manaswee Sharma

    This excerpt piqued my interest about the competition prevailing among the English newspapers back in the 1980s. As I skimmed through Wikipedia,I was taken aback by the varieties of Nationally published papers which existed in that era, dominated by the regional ones of course. Happy to be informed that ET has been among the first movers to print its own magazine ” Brand-Equity ” and is indeed a very clever way to cement its Brand Equity in a segment of a newly launched product. Another interesting concept,coined by Mr. MKD, which I learned today is Invitation pricing.
    I read all the 37 comments above me, and carefully analyzed the real world examples put forth by my peers be it the Invitation pricing concept of Jio or of Apple.
    I would like to take this discussion a bit further and try to correlate Brand Equity and Invitation pricing by making a statement that, invitation pricing is a way to establish brand equity.A typically unique example is of ladies night at a pub.So on Wednesdays, a regular pub in India hosts “Ladies Night” and provides entry to ladies with a minimal entry fees (compared to rest of days) which increases the footfalls resulting in more revenue.This entry fees can come under the bracket of invitation pricing.Now as the crowd increases the pub showcases its uniqueness be it the ambiance,the DJ or ironically the crowd itself.Over a period of time it builds its Brand Equity which was indeed ,more or less,built on the cornerstone called pricing strategy.

  43. Sudeep Chopra

    An interesting and insightful account of the game-changing marketing strategy of invitation pricing. It has become pretty much a norm in the present day but it was interesting to read how it came into being.

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