Anderson News Company

1
Anderson News Company

• Thomas Krajewski
• Seth Knisley
• James Reynolds
• Monika Rzeszotko

2
Anderson News Company

• This presentation follows one of the many
  products supplied by Anderson News Company, Life
  Style Weekly magazine, and its movement
  throughout the supply chain to, and through,
  Anderson News, eventually ending at the final
  consumer.

3
Anderson News Company Overview

• Privately held, est. in 1917
• The largest sales/marketing wholesaler for
  magazine and book products in the U.S.
• Services over 40,000 retail customers in 45
  states
• Products include magazines, books, comics, maps,
  etc.

4
Anderson Magazine Publications

• Anderson News Company is a part of the Magazine
  supply industry
• It holds a 25 market share as a magazine
  wholesale supplier
• Specifically, it specializes in single copy sales

5
Overview of Industry

• Overall, the magazine industry is an 18 billion
  dollar industry
• Total Industry is divided among Single Copy Sales
  and Subscription Sales
• Single copy sales comprise 25 of the total
  market, a 4.5 billion dollar industry

6
The Magazine Supply chain

• Begins with a Magazine Publisher (i.e. Bauer)
• Then product is sent to a Printer (i.e. RR
  Donnelley)
• Subsequently, product is shipped to a National
  Distributor (Curtis Circulation)
• Next, product is shipped to a Wholesaler
  (Anderson News)
• Finally, the product is sent to a Retailer (i.e.
  Wal-Mart, Kroger, etc.)
• The end is the Consumer purchasing the product
  from the retailer, or the product returning to
  the Publisher

7
Life Style Magazine

• Anderson News carries titles from most all big
  name publishers such as Time Warner and Bauer
  Publishing Group
• Life Style Weekly is a newly released magazine
  from Bauer
• It is the first weekly issue, style-oriented
  magazine offered

8
Andersons Market Strategy

• Anderson News is dedicated to getting the right
  product, in the right place, at the right
  quantity, and at the right time.
• Reaching consumers through single copy
  distribution at newsstands by gaining mass market
  displays
• Through large circulation, reaching advertisers
  through the publications

9
The Publisher

• Bauer Publishing
• Ranks 3rd behind Time Warner and American Media
  among the top 10 publishers by revenue.
• Currently own 16 separate titles.
• Circulate 1.2 million copies through Single Copy
  Industry.
• 90 of revenue comes from these sales

10
The Printer

• Located in Wisconsin
• RRD receives material to be printed from the
  publisher, and prints the designated amount of
  copies.
• Once finished with printing, the magazines are
  shipped to the wholesaler through a distribution
  firm.

11
The Distributor

• Clark Distribution Company
• Subsidiary of Anderson News
• Located in New Jersey
• Responsible for delivering purchased magazine
  copies to Andersons 43 nationwide wholesale
  locations.

12
The Wholesaler

• Anderson News
• Once the magazines reach the wholesale warehouses
  they are delivered to approx. 40,000 retail
  customers nationwide.
• Anderson uses its own trucks for transport of the
  product once it reaches their warehouses.

13
Anderson News Company Cont.

• ANC delivers the magazines to newsstands,
  grocers, big box retailers (Wal-Mart), and
  bookstores.
• Wal-Mart is the biggest recipient of single copy
  magazines from ANC.

14
The Retailer

• The retailer attracts the newsstand reader one
  who is more likely to notice the ads in the
  magazine.
• Advertisers are attracted to the newsstand reader.

15
The Final Consumer

• Finally, through the retail stores, the product
  reaches its final consumers
• Final consumers are comprised of two groups

• Readers
• -General public with the exception of magazine
  subscribers.
• - Customers interested in Hollywood news,
  fashion, and topics of style.

• Advertisers
• -There is no advertising department, so
  advertisers are able to reach target markets
  through single copy sales.

16
Time Frame of Entire Process

• From final magazine design to reaching the
  retailer takes 8 days.
• -3 days for printing (Friday/Saturday/Sunday)
• - Shipping on Monday
• -Arrives at locations on Tuesday/Wednesday
• -Distributed by Anderson News on Thursday/Friday
• The product is then on shelves for one week
• Excess is then transferred back to publisher
  within one week
• One of the most efficient distribution models in
  existence. Most others are much slower.

17
Information Systems

• Publisher electronically transmits the digital
  files necessary to produce the magazine to the
  printer.
• Publisher transmits anticipated shipping
  quantities to National Distributor.
• National Distributor transmits UPC codes, prices,
  and shipping quantities to ANC.

18
Information Systems

• ANC receives information and plans distribution
  for next weeks issue.
• ANC sends billing information to all retailers
  who will receive copies of the issue.
• Once returns are physically received back at ANC,
  they are scanned, shreddedand destroyed. The
  scanned return information is transmitted back to
  theNational Distributor each week in the
  "Affidavit" process.

19
Information Systems

• The National Distributor collects all "return
  information" for the issue,consolidates it for
  all wholesalers, and makes available for the
  Publisherto review with on-line systems.
• An issue of Life and Style can take up to 4-6
  weeks to be deemed final.

20
Inventory Management Strategy

• Inventory does not exist in this industry for
  finished goods. (i.e. theMagazine)
• All inventory is shipped and billed to
  wholesalers at time of production.
• Formula governs how many copies to produce.

21
Inventory Management Strategy

• Anticipated unit sales 400,000Budgeted
  Efficiency -... at 33 1,200,000 (Copies
  purchased expressed as a of the total copies
  distributed)....
• 400,000 / 1,200,000 33"efficiency"

22
Conclusion

• Anderson News Company will continue to try to
  maximize its efficiency in order to better reach
  its customers.
• ANC is always dedicated to getting the right
  product, in the right place, at the right
  quantity, and at the right time.

23
Sources

• All information in this presentation was gathered
  through an interview with Dennis Knisley,
  Director of Purchasing for Anderson New Company.