Analysis On The Pricing Strategy Of Newspaper In China

Although China's newspaper industry attained a stable development in the new century, the increasingly fierce market competition witnessed the exposure of weaknesses of those newspapers which are responsible for their own profits and losses. Their limited profit space and exceeding dependence on advertisement one time lead to a weak ability in the aspect of Risk Insurance, and caused the loss of a stable and tremendous profit space which is supposed to be resulted from the optimize of their own resources. With new media arising at an amazing speed and the consequent diversion of readers, slow increase of newspaper advertisements, up-going price of newspaper material, cost for newspaper industry remains a high level in the present times. Therefore, it is necessary and urgent to make a breakthrough on the aspect of finding new increase points in the industry so as to promote a normal and sound business running.As a special kind of commodity, newspapers, especially those city life oriented ones, Features a "second time sale" characteristic, which means at first newspapers are sold at a low price. When they earn remarkable attention from readers, they earn remarkable profits by selling themselves to advertisers. In this way, publishing cost is compensated. However, long-term reliance of newspapers upon advertisements resulted in unbalanced relation between advertising and publishing, and a misleading concept of publishing blindly with no account of cost to earn advertising income, thus the deformation of price system and competition inside newspaper industry. From the perspective of newspaper industry evolution and economic law, selling newspaper at a price much lower than the cost will harm the sound and orderly development of the industry. It is not only an effective way but a long-term measure for the industry group to raise price reasonably.The paper recalls the commodity nature of newspaper, and calls for attention on the potential value of newspaper itself nowadays so as to make up the deviation of newspaper price from its real value, verify the economic law of "price fluctuates around value", and look for profits on the basis of its publishing price. Therefore, setting a scientific and reasonable newspaper price is one of the best ways to enrich newspaper profits and of great significance for the intensive running of newspaper industry.Newspapers vary in prices according to their types. The paper gives a review on the newspaper price system both of our country and of some developed countries. On that basis, it analyses the pros and cons of price fixing strategies of China's newspaper industry, and gets to know the nature of newspaper price and all the factors that influence the price, so as to study the possibility of raising price, set a reasonable price, and figure out multi-profit management mentality for newspaper industry. It is also theoretically significant for the paper to enlarge the newspaper profit space through the above mentioned measures as well as constructing various publishing and running channels.As professor Yu Guomin, head of Public Opinion Study Institute of China Renmin University, puts it, " China's newspaper price is generally lower than that of the world's average level. The cheapest cultural product in China is its newspaper. This suggests the logical necessity and a strong possibility for China's newspaper to raise price. Focus of the raising price issue is that who will take the lead and how he will do that in order to weaken the dependence of newspaper revenue upon advertisements. China's newspaper business model is similar like that of the United States in that advertisement revenue accounts for 80% or 90% of the total, which is on the contrary to that of Japan and Europe. Japan newspaper has 70% account of publishing and European newspaper 50%, leaving advertisement another half in the account. In the long run, advertisements should not be overloaded. We have to insure reader's rights of being informed and the readability of our newspapers." From that we see the need of a further clearance of price fixing mentality for China's commercial newspaper.