Case Study - Newspaper O DIA - IAG - A Escola de NegÃ³cios da ...

O DIA 

Case Study - Newspaper O DIA 

Planning and Implementation of a 

Business Strategy 

After being purchased by journalist Ary Carvalho in 1983, the newspaper O Dia began a 

transformation to cast off its image of a populist and blood thirty paper, starting with a 

graphical and editorial transformation. But the difficulties resulting from an archaic administrative 

inheritance, made Ary Carvalho perceive that without a deeper business and cultural 

change, the desired objectives would not be achieved. 

A new board of directors, formed in 1989, began a phase of transformation in the Company 

which altered its profile completely. The administration was modernized, a deep change in its 

organizational culture was initiated and a new market positioning was sought for the 

newspaper, which resulted in a product so far unseen in Brazil: - a high quality popular 

newspaper. In order to achieve this, it was necessary to create and implement new business 

strategy, to search for creative solutions for the problem of financing the new investments that 

would be necessary, to achieve a higher level of technology, to attract qualified professionals 

and instill in the employees of a stagnant Company, a totally new business culture. 

In 1992, with the inauguration of the new printing presses, the Company began to reap the first 

results of its new strategy. The graphical reform was concluded, forcing the newspaper, now 

printed in color, to definitely discard its old image and become one of the most modern 

newspapers in the country. At the same time, the papers Sunday circulation grew from 300,000 

to 480,000 copies. 

These changes allowed the newspaper to gain new readers, without losing the old ones and to 

become a family oriented newspaper, one the worker takes home, and also enlarge its public. 

The success of this strategy can be measured in numbers: it is the paper which has grown the 

most, both in circulation and in number of readers. O Dia is currently the leader in newsstand 

sales in Brazil, the third largest newspaper in the country in circulation and leader in number of 

readers in Rio de Janeiro. 

This case was prepared by Prof. Luiz Brandao as a basis for classroom discussion and not to illustrate 

examples of good or bad administrative practices. The strategic information presented herein has been 

altered to preserve its confidential nature, but has maintained the basic relations pertinent to the case. 

All public information is real. This case was awarded the “Premio Mario Henrique Simonsen” first prize 

in 1996, in the National Contest of Business Case Studies, organized by ABAMEC and Fundação 

Getulio Vargas. 

Case Study: Jornal O Dia Luiz E.T. Brandão 1

O DIA 

I 

t already was after eleven PM on that Tuesday in March 1989, but the lights were still 

on in the Director’s conference room on the sixth floor of the headquarters of the O 

DIA in Rio de Janeiro. Inside, hunched over piles of documents and management 

reports, journalist Ary Carvalho, owner of the newspaper, discussed with the Directors the 

future of the business. With each new batch of information studied, it became clear that the 

company’s real situation was even more critical than what he had imagined. When the meeting 

was finally over, already in the early hours of Wednesday morning, Walter de Mattos Jr., 

recently appointed Superintendent, declared: “This Company will have to change its course 

radically, if it wants to guarantee its place in the future.” 

A graduate in Economy, Walter de Mattos Jr. had recently ended a ten year experience as 

senior financial manager of a major shipping Company in Brazil. After a graduate course in 

Brazil and abroad, Mattos was preparing himself to continue his studies in the United States, 

when he was invited by his father-in-law, journalist Ary Carvalho, to join him at O Dia. The 

newspaper, bought seven years before, was going through difficult times and there were outside 

groups interested in buying him out. Ary Carvalho had given him the task of turning around 

the business, or help him sell it if this turned out to be impossible. 

The Company was in a bind. The newspaper was undergoing an identity crisis, was economically 

and financially fragile, technologically lagging, had no adequate financial controls, 

its printing installations obsolete and its staff poorly qualified and lacking in motivation. It 

would be an easy prey if a more aggressive competitor attacked him head on, as it was 

suspected to happen shortly. But it still had a strong brand name, sales were good, and the 

owner was determined to do whatever was necessary to revert this situation. 

Attracted by the challenge, Mattos decided to submit to Ary Carvalho a project he had in mind 

for the recuperation of the newspaper: to promote the most audacious and consistent 

transformation of a media firm ever attempted in Brazilian journalism. 


The Newspaper Industry 

“Every publisher should fall to his knees 

each time he sees a paper roll” 

Rupert Murdock, media mogul 

R 

unning a modern newspaper involves three different areas, each with its own 

organizational culture. The first is the newsroom, responsible for the collection 

and analysis of information and news, formatting of the content and for page set 

up. The second is the industrial manufacturing process of the newspaper, which 

involves large-size printing equipment, and where the paper is physically printed and packed 

for distribution. The third is the commercial and marketing area, responsible for the sale of the 

newspaper to the readers as well as for the commercialization of the ad space. 

Newsroom 

The newspaper begins in this room. Its content is determined here from the information 

collected by the reporters, as well as the emphasis with which each piece of news will be 

presented. Due to the creative nature of this work, without any formality or a well defined 

structure, where the raw material is the information, the journalists in the newsroom normally 

have a very different culture than that of the rest of the Company, which makes the 

management of the newsroom a difficult art. 

Printing Plant 

If the printing plant of the newspaper is the heart, then the newsprint is its blood. These large 

size printing presses which use vast quantities of paper in enormous rolls of up to 5 ft. wide and 

2.500 lb. in weight, are called web printing presses. 

The printing press is the single largest capital investment for its users. The 

most important buyer purchase criteria are machine throughput, reliability, 

service, printing quality (sharpness), versatility, degree of customization, ease 

of maintenance, ability to control and delivery time. Reliability is particularly 

important downtime is unnaceptable in many printing applications; a 

newspapers has to be printed on time. Manufacturers have to provide for 24- 

hour-per-day, 365-day-per-year service whereve their machines are in use. 

The need for reliability and the long useful life of a press (about 20 years) 

causes buyers to be conservative about new press designs. The development 

cycle for new generations of presses is long, measured in decades. Efficiency 

is important because press operating costs have a major influence on the 

buyer’s cost structure. Price is significant, but only if these other parameters 

are comparable. i 


There are presently three principal printing techniques: Letterpress, which 

uses a raised negative to transfer an image to paper, gravure, which employs a 

recessed negative, and offset, a chemical process. where the plate is not in 

direct contact with the paper: the image is passed first to an intermediate 

rubber roll which then transfers it to the paper. The offset technology offers 

better printing quality, more speed and less cost than the letterpress. 

Although it was developed in the twenties, migration towards the offset 

technology in the presses only started by the end of the sixties, causing a large 

demand for this type of equipment throughout the 70´s and 80´s. 

A series of other advances has marked the evolution of this equipment in recent years. One was 

the capacity to print in colors. Another was the replacement of mechanical controls by 

electronic ones, like the use of computerized scanners to preview the image and automatically 

determine the amount of ink necessary. 

It is in this area of electronic controls that resides the main difference between modern and 

older presses, since the mechanical printing process is about the same in both cases. The main 

advantage of electronic monitoring is that it allows greater uniformity of the product, and 

guarantees consistent quality without the oscillations typical of older presses. This reduces 

losses due to cold start-up (printing start-up) and hot losses (interruptions due to paper 

breakage, change of plates etc.). These losses are due to printing time required for the 

stabilization of the web press in a production run, and may reach upward to 1,000 lost copies in 

old mechanically controlled machines, or 200 in the newer machines with electronic control. 

These losses, when repeated frequently, may represent a significant annual cost for the 

Company. 

Modern web presses operate with less people, work faster, are more efficient and therefore 

more productive. A modern press may print an average of 50,000 pages per hour, and reach 

peaks of 70,000 pages/hour. 

Commercialization 

The commercial sector is responsible for a newspaper’s revenue. This revenue has two 

different origins: newspaper sales (product) and ad revenue (service). Revenue from sales of 

the newspaper copies depend directly on price and total circulation. Newsstand sales are 

usually made in consignment, where the newspaper seller returns the unsold papers, at no cost 

for him. Sales through newspaper subscriptions are also largely used. The main advantage is 

that it advances revenues, commits the reader for a period of time, and creates a client database 

which can be used to segment the product, or sold as mailing list to third parties. The 

disadvantage is that the subscriptions are usually offered with discounts to attract the readers, 

thus reducing the revenue and causing losses from the newsstand sales. The cost of providing 

subscription services to the readers is also high, about US$0.20 per issue. 


Revenues from sales of ads involve the sale of classified ads which are those published in 

separate supplements, and publicity ads which are published in the news supplement, known as 

news ads. Revenue from this kind of service depends on the price that the newspaper can 

charge for ad space, which in turn depends on the circulation and appeal the newspaper has 

among its readers. The present trend is toward market segmentation, where the advertiser can 

better focus on his target client. 

The Newsprint 

The importance of newsprint for a newspaper cannot be underestimated, since it represents 

from 30 to 50% of the total cost of the newspaper. In view of its strategic importance, high cost 

and the large values involved, buying newsprint is done by the highest echelon of the 

Company, if not by the owner of the newspaper himself. 

The largest part of newsprint used in Brazil is imported, since local production, around 260,000 

tons/year, is way below the annual consumption of approximately 600,000 tons. There is a also 

a significant difference in quality, which makes the imported paper, made of long fibers which 

increase resistance, more adequate to support the strains to which it is submitted during the 

high-speed printing of modern presses. The locally made paper, made of short fibers, breaks 

and tears more easily during printing, causing losses that may reach 5% in a year. The main 

newsprint manufacturers in Brazil are Papel de Imprensa S.A. - PISA, and Klabin. 

Paper prices vary in accordance with world demand. From 1990 to 1992, the recession in the 

world economy reduced demand and created a surplus of the product in the paper market, 

forcing a price drop and extended payment dates from 90 to 180 days. After 1994 the situation 

reverted: markets improved, demand increased, paper prices doubled and payment dates were 

reduced to 60 days by end of 1995. Fig. 1 shows the changes in international prices for 

newsprint from 1990 to 1995. 

Newsprint prices (USD / metric ton) 

900 

800 

700 

600 

500 

400 

300 

1990 1991 1992 1993 1994 1995 

Figure 1 


For strategic reasons, the newspapers try to maintain a close relationship with their suppliers of 

newsprint, so as to guarantee a steady supply even in times of scarcity, as occurred in 1995. 

Product Characteristics 

The objective of a newspaper is to offer its readers information, services and entertainment at 

reasonable prices. During weekdays the paper should be more objective and direct, giving the 

desired information in a simple form, because the reader, in general, does not have too much 

time available. On Sundays, however, with more time available for reading, the newspaper can 

offer analysis of topics of interest, interviews with relevant personalities and more elaborate 

matters which will lead to reflection as well as offer a larger portion of entertainment. 

Carlos Pinheiro, Administrative and Financial Director of O Dia, comments: 

The newspaper should be the survival manual in the reader’s modern city, a 

source of daily consultation when the day starts, his guidance before going 

out to work. The identification the reader has with his usual newspaper is 

very strong, and this turns him into a loyal consumer, who sees the paper he 

reads as his newspaper. This greatly enhances the importance of the brand, 

because it is associated with all the respect and credibility the paper has with 

its readers. This helps create an enormous barrier against the entrance of new 

competitors, but also makes it difficult to lure readers away from other papers 

that cater to the same market segment. 

History of the Newspaper O DIA: 1951 - 1983 

T 

he newspaper O DIA was born in 1951 from a project journalist Antonio Chagas 

Freitas, to make a newspaper directed to the low-income population. It had only 

eight pages, was made on a modest basis and did not require large-size 

investments: to cut costs, the daily made use of the existing structure of A Noticia, 

owned by the then governor of São Paulo, Ademar de Barros, and directed by Chagas Freitas. 

O DIA began innovating from the start. To take advantage of the idle presses of A Noticia, 

which was only sold in the afternoon, it would be a morning paper, and available already in 

the first hours of dawn, with news of the city and the country on the first page, whilst the other 

papers only arrived later at the newsstands, with headlines focusing mainly on international 

news. In time all newspapers became morning papers and followed this early dawn trend 

inaugurated by O DIA. Its distribution system was also simple and efficient; the distributor 

would pick up the newspaper, at the printing site on Rua Marechal Floriano in the center of Rio 

de Janeiro, and take it to Largo da Carioca, where the newspaper sellers would fetch it. In less 

than a month it had become a leader in sales at the Rio newsstands. 


In those early days, still without the competition from television, the newspapers had an 

important role as the main source of information for the public, and also as trend setters of 

public opinion. The number of newspapers offered to the public was large, with various 

different focuses. Jornal do Brasil, O Globo, Tribuna da Imprensa, Jornal dos Sports, still 

existing, and others such as Correio da Manhã, O Diário de Notícias, Última Hora, O Jornal, 

O Mundo, O Radical, A Noite, Diário da Noite, now extinct. 

Cícero Sandrone, in his manuscript “40 years of O DIA”, comments: 

From its first edition, and during the following decades, O DIA tried to reflect 

the reality of Rio de Janeiro, of Brazil and the world, in its own way, with a 

sharp journalistic style, marked by the impact extracted from the dramatic 

contents of the news. Disasters, crimes, scandals, personal tragedies, popular 

commotion, mystic phenomena, tragic or tragic-comic events picked out from 

the daily living, were presented in such a way as to relate the reader with his 

own world, placing him in the center of what was being told. The journalist 

style of O DIA transformed the newspaper in witness of the violence 

suffered by the poorer population of Rio de Janeiro. 

So, in these four decades, O DIA registered a little of the history of the 

Brazilian people - the history that is not found in school books, but exists in 

the streets, in daily living, in fights and muggings, in popular beliefs, in the 

passionate crimes, in the disasters, floodings and miracles, in farces prepared 

to deceive the fools, in petty thefts - that is, in all the offenses listed in the 

Civil and Penal Code. Its pages have registered the pathology of social 

behavior of the common man, indispensable information for the 

reconstruction and understanding of the historic process.” ii 

Thássilo Mitke, journalist and head of the newspaper newsroom for twenty years, said: 

There is this idea that making a popular newspaper is easy, but it is not quite 

like this. Aside from being well made, the popular newspaper should offer 

the reader the information and all the services and entertainment which are 

indispensable for maintaining the daily loyalty of the buyers at the 

newsstands. The preparation of the headline demands from the journalist a 

daily effort in imagination and talent, a capacity to extract from reality that 

unusual aspect that wins the reader, touches on his emotions and affects him. 

And, together with the normal news coverage, the popular newspaper must 

offer something more - serialize the news, the police romance, cover the 

mystic and religious field, the story of the super-natural. 

Sensationalist headlines were the trademark of O DIA. “Corpses, voodoo and sex” was the 

three word formula on how to make a popular newspaper, and headlines to attract readers, 

according to the first secretary of the newsroom, journalist Santacruz Lima. “If the office boy 

here does not understand the headline, it is not good”, he would add. The synthetic language of 

the headlines had to condense the drama, the tragedy, and the comic or deadly aspects of the 


fact, always into a direct and definitive form, always trying to touch the reader and capture the 

unusual aspect of the news. 

Flávio Brito, secretary of the newsroom during the 70´s, commented on the importance of the 

headlines: 

“We don’t consider the headline a mere title, because it is not so. It is the 

article best displayed at the window dressing. It is the only permanent and 

free way to promote a newspaper.” 

“Killed his lover with blows and went to sleep”, “Kicked his mother to death - the victim of the 

dammed son was 108 years old”, “The captain killed himself: widowhood and failure in his 

second marriage”, “Helped by her daughters, she cut her husband in 20 pieces”, “Gang of 

Women Only”, “Shot dead in the car, as he left the motel with his godmother”, are some of the 

published headlines, which illustrate well the style of the newspaper at the time. 

O DIA and Politics 

In 1954, an IBOPE survey showed O DIA as leader in newsstand sales among the morning 

papers, followed by Jornal dos Sports, and with more than double the sales of Jornal do 

Brasil. Women were seldom found in the newsroom, contrary to what happens nowadays, and 

the majority of journalists did not have a college degree. A common type of professional then 

was the “cana e pena” (literally “jail and pen”), the policeman/ journalist, and the prevailing 

mood was one of bohemian spirit and the lack of discipline that led to very little productive 

work. In one of the first attempts to straighten things up, the editorial secretary held a meeting 

to explain the new disciplinary measures which he said were indispensable to organize the 

workplace. As he closed the meeting, one of the journalists present took out a gun and fired a 

shot at the ceiling. That was the only comment the journalists had to the speech the boss had 

just made. 

In this same year, Chagas Freitas showed the political strength that the newspaper could have 

by being elected federal Congress member for the first time. He would be re-elected in 1958, 

in 1962 and again in 1966, always making use of the coverage the large newspaper circulation 

gave him, to build up his political base in the Rio, and which would still earn him two mandates 

as Governor of the State. 

In 1969, using the newspaper for a successful affiliation campaign for his political party, the 

MDB, Chagas Freitas consolidated the party’s leadership in the State, and with the goodwill of 

the military, started his political escalation towards the State government, until his nomination 

in 1971. Chagas Freitas appointed Congressman Miro Teixeira as his political heir; the latter 

had started his career as a reporter for O DIA, before being elected in 1971 for the first time. 

He had a popular column in the paper, was re-elected in 1974 with the largest number of votes 

in the country and again in 1978, in a clear demonstration of the political strength of a popular 

newspaper. O DIA had become a political feud, living off hand-out assistance, a newspaper 

whose main function was to give political support for the then State governor and his party 

followers. 


Chagas Freitas took over the State government again in 1978, for his last mandate. In an 

attempt to elect his successor in 1982, he placed his newspaper and all his political skills at the 

service of Miro Teixeira, who started the campaign as favorite. Miro, however, joined the 

party’s more radical faction, and publicly strayed away from the faction commanded by Chagas 

Freitas. This disappointed immensely Governor Chagas Freitas, who then withdrew his support 

and canceled the publication of Miro Teixeira’s daily column in O Dia. Miro’s campaign lost 

impetus and the opposition candidate, Leonel Brizola was elected Governor, in the first free 

elections in Rio in 20 years. 

The End of the Chagas Era 

The consolidation of the Brazil’s process of drifting away from military rule to a democratic 

society coincided with the end of Chagas Freitas’s political power. With a hostile governor, 

and having fallen from grace with the military, who at this point were withdrawing from 

politics, there was a definite possibility that the government publicity budget would cease to 

support the company’s cash flow. Chagas Freitas was old, tired, sick, disillusioned and, 

without successors either in politics or in the newspaper, he lacked the will to continue. To 

continue would require heavy investments in personnel and equipment to adapt the newspaper 

to the new reality, but Chagas Freitas was against any changes. “That newspaper only works 

with politics”, he would say. Chagas lost interest in continuing the business and in October 

1983 sold the O DIA to Grupo ARCA, of journalist Ary Carvalho. At the time the paper was 

selling 180,000 copies on weekdays and 300,000 on Sundays. 

O DIA: 1983 - 1989 

A 

ry Carvalho started his career in 1956, in São Paulo, in the newspaper Última 

Hora, which he directed in the State of Paraná in 1961, and in Porto Alegre from 

1962 to 1969. In 1964 he inaugurated the newspaper Zero Hora, in 1970 he took 

over the job of Editor of Última Hora in Rio de Janeiro, and in 1972 he bought 

the brand name. 

With O Dia, Ary Carvalho inherited a newspaper which was populist and where politics, cheap 

sensationalism, bloody crimes and Chagas’s proselytizing political followers were all mixed up 

in a deadly combination. A newspaper whose objective until then had been to give political 

support to its owner, without a thought towards management for financial results. As a 

business, the newspaper mixed the problems of a badly managed private enterprise with the 

paternalism and inefficiency of an old fashioned public service office. At that time, the 

treasurer carried the company’s check books in his own pockets, and would sign and dispense 

payment checks as requested. The revenue from newsstand sales was collected at dawn, in 

cash, on the ground floor of the Rua do Riachuelo building, as the distributors arrived to pay 

and fetch the day’s papers. 


No significant changes occurred in the first years, but in 1987 began a graphic and editorial 

reform to give more emphasis to the information and the text. The number of pages was 

increased, new supplements were introduced, well-known columnists were hired and the 

importance of the police news was reduced - something that was considered taboo until then. 

In 1988, Dacio Malta, chief editor at the time, stated: 

It was said that O Dia sold well because of its blood filled headlines. The fact 

is that we ended the police headlines and the newspaper continued to grow. It 

is obvious that police news is indispensable for a newspaper which is made in 

one of the world’s most violent cities. But O Dia is a paper to be read by the 

worker and his family, a paper to be taken home. 

Outside the newsroom, however, the changes were timid. A commercial area, until then nonexistent, 

was created: several administrative and financial routines were introduced, and some 

necessary reforms were made in the installations. In 1986 the old Goss presses, which still used 

the old system of typographic printing, were also reformed to adapt them to the “letterpress” 

system: this injected new life to these more than 40 year old machines. But, without a defined 

business strategy, new investments and a radical culture change, the company would face new 

problems. 

O Dia: 1989 - The immediate Problems 

W 

ith the approval of Ary Carvalho, Mattos began to take action in the company. 

An immediate problem that had to be solved was the chronic lack of cash, 

which could compromise the company’s reputation if not dealt with in time. 

Overdue commitments with the company’s suppliers amounted to the 

equivalent of 2,5 million dollars. Besides, there were no adequate financial controls, nor 

information to allow managers to deal with the facts, as clearly seen in that dramatic Director’s 

meeting. 

Mattos’s first action was to implement a total centralization of decisions. All checks and 

expenses were to be controlled directly by the superintendent. This radical centralization had 

two purposes: first, to control the costs, and second, to become part of Matto’s learning 

process, as he had no experience with running a newspaper. Every check required an 

explanation as to the purpose of the expense and why it was necessary. This allowed reduction 

of the superfluous and put an end to some distortions, like the “privatization” of the printing 

presses by some of the more creative employees, who used it on week-ends for private jobs, at 

the company’s expense. 


Mattos comments: 

This centralization was somewhat draconian but necessary at the time. It was 

the only way we had to take firm hold of a difficult situation, in a type of 

business on which I had no previous experience. This served to accelerate my 

learning process and also convinced people of the importance of costs. We 

have never ceased to worry about costs. I am rather neurotic about this, but 

nowadays there exists a newspaper with an idea impregnated in people’s 

mind: no expenses are incurred if not to add value for the company and its 

product. If this is not the case, then the expense will simply not be made. We 

cut everything that is superfluous and unnecessary, but on the other hand, we 

spare no expense or effort to have everything we deem essential to make a 

newspaper efficiently and with high quality. 

After that, Mattos started to form a team of people to help him in the task he had set out for 

himself. He brought in Carlos Pinheiro as Director for Finance and Administration, a 

production engineer and Matto’s colleague in a graduate Finance course at IBMEC, and who 

had previously participated in the restructuring of the Marcelino Martins Group. Six months 

later, Denis de Oliveira, also an engineer, came from O Globo to be Director of Operations, 

bringing with him twenty years of newspaper experience for the new team’s benefit. 

With the core team now in place, he now began going into the details of the company’s 

operations. The commercial sector of the newspaper, for instance, was an area that traditionally 

had been managed without much concern about profitability. After an analysis, prices for 

publicity were increased, and several advertisement contracts that proved to be a loss for the 

newspaper, were canceled. 

As had already happened with the Cruzado Plan in 1986, when a price freeze was ordered by 

the Government after the so-called Summer Plan in January 1989, there was a brief period of 

economic stabilization with close to zero inflation, which temporarily increased the purchasing 

power of the low income population, precisely the O Dia type of public. This increased the 

paper’s sales, strengthened the company’s cash position and helped the restructuring plan 

which was under way. In the wake of the 1989 elections, there was an increase in demand for 

publicity and political propaganda in the newspaper, which also had a positive effect in the cash 

position, now controlled with an iron hand. 

With the controls firmly in place and a stronger cash flow brought on by an improved market, 

by the end of 1989, the most urgent short-term problems were under control, accounts were 

settled when due, cash was at hand, and the core team was working well together. It now was 

time to think of a long-term strategy for the newspaper. 


O Dia: 1990 - Structuring a strategic plan 

The first thing to do was to define the newspaper’s competitive advantages and reposition its 

brand name according to its target public, which was to be that of a modern lower income 

oriented newspaper, a popular newspaper, as this is called in Brazil 

Repositioning the brand name 

In the Rio de Janeiro market, due to its popular and bloody origin, O Dia was well rooted in 

socio economic classes D and E, whereas the class A and B public was catered to by Jornal do 

Brasil and O Globo. Therefore, a significant segment of the market did not have a product 

specifically directed to it, which was, class C. O Dia would become a popular newspaper of 

unsurpassing quality, directed primarily to classes C and D, with some penetration in B and E. 

A separate product would also be launched to compete for the class E public, and to protect O 

Dia against any competitors that might decide to expand into classes, as well as to cover O Dia 

from an attack from the rear. It was also hoped that sales to class B would grow if success were 

obtained to eliminate the existing prejudice against the old image of the newspaper. 

This decision came after it was concluded that classes C and D represented a considerable share 

of the purchasing power of the state population, reaching 54% in 1995 (DEPIME - O Dia´s 

Department of Information and Research). At a time when a large part of the country’s 

population were excluded from the market economy, and products were only made for classes 

of higher purchasing power, to invest in a strategy to turn out a popular product of quality, was 

an innovation. But this strategy proved a success, since with the Real Plan, some $18 billion 

dollars more were spent in consumption by the lower income population. iii 

With this re-positioning of the brand, the product began to be directioned primarily to the class 

C public, and with this, the weight of class D readers fell from 50 to 30% of the total O Dia 

readers. The paper’s chief editor, Eucimar de Oliveira, started his journalist career at Ultima 

Hora, was a special reporter for O Globo, chief editor of TV Globo and under-secretary of the 

Jornal do Brasil newsroom. He recalls: 

We lost the passionate reader, the one that likes to see the corpse’s head on 

the pool table. But the large mass of old readers has been maintained. What 

we did was add new readers. 

Despite this, even nowadays, in 1996, O Dia has more class E readers than A Noticia, a 

newspaper directly focused to this market. 

This re-positioning of the brand name would have another positive effect for the newspaper. 

Although O Dia had always been a paper with high sales, the stigma associated with its image 

made potential advertisers shy away from placing ads, as they didn’t wish to associate their 

own brands with the paper’s cheap sensationalism. By altering the focus of the newspaper and 

the new image which was beginning to stabilize, O Dia began to attract these advertisers, with 


significant increase of news ads, which grew 120% in volume between 1988 and 1995 (Annex 

12) 

Assumptions about Brazil’s economy 

The choice of this market strategy was a natural result of the assumptions made regarding the 

future of the country. One of them was that sooner or later the Brazilian economy would be 

stabilized and free itself from the curse of high inflation, and that when this happened, the 

largest percentual increase of purchasing power would occur in classes C and D. This would 

represent not only an increase in circulation - since only 70% of class C and 46% of class D 

read the newspaper in 1988, according to information from DEPIME/O Dia, - but also an 

increase in the ads directed to this new consumer public. In comparison, it was expected that 

classes A and B, the Brazilian middle-class, estimated at 40 million people, could double if the 

country started to grow again. This assumption was confirmed in 1995, when 18 million 

Brazilians who had been excluded from the market became consumers, as a result of a 30% 

income growth in the poorer section of the population. iv 

These facts were not totally unpredictable for the O Dia executives, since all stabilization plans 

decreed by the government since 1986 had the effect of increasing, even if for a small period of 

time, the purchasing power of the poorer classes. Similarly, when the income of these classes 

fell as a result of the difficulties of the Brazilian economy, at the time, the newspaper also 

suffered a drop in its sales. 

Since classes C and D represent a much larger share of the population than A and B, as can be 

seen on the following drawing, it is clear that the growth potential of classes C and D, the target 

public of the newspaper, is extremely high. The advertisers will want to reach this public, and 

no better channel for this than O Dia, which has the best penetration in these classes. Of the 

total population of the State, 13.380.189 inhabitants in 1995, the population of the Greater Rio 

(Metropolitan area, Niteroi, São Gonçalo and Baixada Fluminense) represents 9.588.090. 

There are 267.604 persons in class A, 1.873.226 in class B, 3.478.849 in class C, 4.683.066 in 

class D and the remaining 3.077.443 in class D. 


Percentage Distribution per Socio Economic Class of 

the popularion of Rio de Janeiro 

35% 

D 

23% 

E 

C 

2% 

A 

14% 

B 

Source: Marplan, 

26% 

Figure 2 

Mattos states: 

We made two bets: first, that Brazil would develop its economy and create 

new consumers in classes C and D, and that O Dia would be the best channel 

for the advertisers to speak to this public; and second, that Rio would regain 

its previous position of importance in the economy of the country and that this 

would pave the way for a strong regional entrepreneurial Group. 

The Popular Newspaper 

A modern popular newspaper has different characteristics that set it apart from other types of 

papers: short texts, low pagination, intensive use of infographics that aside from the visual 

appeal, shorten and simplify the information, lower price and a high quality product. These 

would be the necessary attributes to turn O DIA into a light, colored and easy to read 

newspaper; a good quality daily, because of its technology, pretty, because of the color and 

attractive esthetics, and cheap, so as to be accessible for the reader’s pocket, which also 

implies in a low-cost product for the company. Good, pretty and cheap became an internal 

motto of the newspaper’s new administration. 

Pagination is the number of pages in each edition. On weekdays, the popular newspaper should 

have low pagination, with short and concise news to permit a rapid but over-all reading, and 

make this reading possible inside the reader’s mean of transportation, mainly buses and trains. 

Because it is to sold to a public with less purchasing power, and due to the great price elasticity, 

the popular newspaper should be cheaper than the other dailies marketed to classes A and B. 

The price of O Dia is 50% of the price of Jornal do Brasil and O Globo, although it has 

reached 60% in other times. 


In order to be able to make money even at a low price, the newspaper must also have low costs, 

which is only possible with an efficient operation and high productivity. This is more critical in 

Brazil, due to the high risk of financial leverage, so the firm must have a sufficient margin to be 

able to generate most of the funds needed for its investments. 

The quality requirement was the result of a world trend seen during visits made to the main 

newspapers and equipment manufacturers in Europe and the United States at the end of 1989. It 

struck the management team that no Brazilian newspaper at that time was up to par in terms of 

quality standards. Ruth de Aquino, coordinator of special projects of O Dia states: 

There is prejudice in Brazil against everything that is popular, which is 

always associated with low quality. People assume that if it is cheap, it isn’t 

good. This is absurd because there is no contradiction in making a popular 

product and still have good quality. 

Director of Operations Denis de Oliveira agrees and adds: “Better quality doesn’t necessarily 

cost more. In effect, it may even be cheaper when modern production technology is added.” 

It became clear that this strategy implied a level of efficiency that would be impossible to 

obtain with the existing methods and equipment, already totally obsolete. It was then decided 

to invest in new and modern printing installations, building a model plant with modern and 

functional installations to house the best available equipment in the market. A high technology 

path would be taken, involving also total computerization of the newsroom, so as to have the 

paper prepared on computers digitally and sent electronically for the pre-printing, where the 

press’s photolith is prepared. 

Denis de Oliveira would say afterwards: 

We decided to go directly from the typewriter to electronic publishing, to go 

for a radical technological change. To do this we decided to transform one of 

our major problems - the obsolescence of our industrial equipment - into an 

advantage. Since we didn’t have anything worth keeping anyway, we also 

didn’t have a reason to be tied to the past. We were free to choose what we 

though would be the best, without worrying about problems of compatibility 

between old and new equipment, and second, because there were no 

investments worth being retained. We made a clean break with the past, 

threw everything in the garbage and started again from ground zero. We 

knew this would be the alternative of greater risk, but truly, in view of the 

situation at the time, we didn’t have much of a choice. 

The competition 

One of the consequences of the paper’s repositioning of the product was that O Dia would now 

start competing in the same line with O Globo, in social-economic classes C and B. To compete 

with a strong newspaper, much larger than O Dia in sales, as well as being part of the largest 

communication group in the country, would not be easy. According to recent estimates from ad 


agencies, the cost of the ads for O Globo newspaper in her sister TV network, Globo Television 

Network, during the year 1994, if fully paid, would be equivalent to more than $30 million 

dollars, which is undoubtedly one of the largest newspaper ad budgets in the world. In this 

aspect, O Dia would have to be contented with a lot less, and prepare itself for a hard battle. 

Strategy Implementation 

Once the direction that the company should take had been defined, the job was now to execute 

this ambitious plan, which would be responsible for many a sleepless night. The problems 

were many, one of them was how to obtain the tens of millions of dollars, equivalent to almost 

an year’s sales, for the necessary investments, with a still weak financial statement? 

The estimated need for funds was as follows: 

Printing equipment (web presses) 

Accessories 

Civil construction 

Land 

Total 

18 million dollars 





Equipment 

Due to the importance of the investment and the lengthy delivery time of the equipment, it was 

necessary to first decide on the purchase of the presses which would be part of the new printing 

installations. Manufacturers usually obtain financing for the buyers through government 

agencies which promote exports, such as Eximbank and others. But these agencies usually 

demand a counter-guarantee, in the form of a local bank guarantee, before approving the loan. 

The newspaper Estado de São Paulo had recently purchased new equipment in this form, with 

the local guarantee given by a pool of Brazilian banks. Due to company’s weak financial 

statements, Mattos knew that it would be near impossible to obtain a local loan or a guarantee 

for an external financing. It was necessary to find another solution. 

A series of contacts were started and visits were made to the main equipment manufacturers in 

Germany and the United States, where the O Dia team made clear an important point: the 

company did not have the funds, so the deal would have to be financed and furthermore, 

without the usual bank guarantee. 

Although German companies have 50% of the world market for printing equipment, their 

participation in Brazil was very small, since the local market was totally covered by the 

American firm Goss-Rockwell, with more than 90% of the market. But in 1990, one of the 

main German manufacturers of printing equipment, Maschinenfabrik Augsburg Nurnberg - 

Roland, (MAN-Roland) was able to foresee that an equipment renovation cycle would be 

started in Brazil, because the majority of the newspapers would have to modernize in the near 

future, - and decided to force its way into this market. 


O Dia was the natural candidate for MAN, because it would be the first totally new printing 

plant in Brasil, and it was a known fact that the newspaper intended to build model printing 

plant which would serve as an excellent showcase for the German firm. Mattos proposed a 

totally new operation to the Germans: a supplier’s credit, where instead of a bank guarantee, 

the guarantee would be the equipment itself, alienated with a reservati dominii clause. 

Although it was new, the idea made sense. Since offset presses have a long useful life, they 

still maintain a high re-sale price representing from 60 to 70% of its original price, which 

would reduce the risk to 30 to 40% of the financing. Considering that a 15% downpayment 

was required, this in reality would leave for the supplier a risk of only 15 to 25% of the total 

price of the machine. 

Despite the long Goss-Rockwell tradition in the Brazilian market, the interest shown by MAN- 

Roland in the Brazilian market placed the American company, for the first time, face to face 

with a strong competitor. This pressure from the competition led both Rockwell and MAN to 

make a series of benefic concessions for the newspaper in terms of prices. MAN, however, 

found difficulties in setting up a financing scheme to fulfill O Dia´s requirements. Rockwell, 

with the help of the financial arm of its group, Rockwell International Credit Corporation 

(RICC), managed to arrange a financing within the parameters established by Mattos, with 

payment during a period of 7 years after an 18-month grace period, a fixed rate of 10% p.a., and 

without a guarantee. This was the only supplier’s credit made for a printing press in Brazil to 

this date. 

The participation of Eximbank was limited to the country’s political risk, which is the risk of 

the country’s insolvency. This occurs when the Central Bank does not pay the financing agent, 

due to lack of U.S. currency, moratorium etc., despite having received the payment from the 

client, in local currency. This was specially critical in countries where the exchange market is 

centralized by the government, which has been the case for Brazil.. For this purpose, a fixed 

3% tax was charged on the total financed amount. 

The contract was signed in January 1990, and it was evident almost immediately that the Brazil 

risk was more real than it had been calculated. The down-payment, in the amount of $4 million 

dollars, part of which had been made with a contribution from the majority shareholder with the 

sale of a newspaper he owned, the Jornal Popular of São Paulo, had been paid on maturity by 

the company to the Central Bank, to be remitted to the supplier. The Central Bank did not 

remit the payment for several weeks, which meant that the corresponding funds in local 

currency were still deposited in early March 1990, when the Fernando Collor, the newly elected 

President, in still another ill-fated attempt to curb inflation, blocked all bank deposits in the 

country for a period of 18 months. The funds were only released after the Central Bank 

published a decree setting specific guidelines for such cases as O DIA’s. 

The Installations 

The problem of financing the presses was solved, and the period of delivery was running: it was 

now necessary to build the installations that would house the new equipment soon to arrive, and 


to buy the auxiliary equipment. To cover the cash requirement, and now with a well defined 

project and strategy, part of the necessary funds was obtained through a local loan. 

Countless manufacturers in the United States were visited before the layout was decided. The 

project should be modular to allow up to 50% expansion in any printing sector without altering 

the industrial and architectural conception. A 400,000 sq. ft piece of real estate was purchased 

to build 110.000 sq. ft. of the most modern printing plant in Latin America. The construction 

of the printing installations and the employees training would have to be accelerated because 

the company getting short of cash, the grace period of the financing was nearly ending and the 

date of the first amortization payment of more than 2 million dollars was soon due. It was 

indispensable for the presses to be ready and in operation by then. 

Printing presses are heavy machines, but of high precision. It is common practice that they 

should only be unpacked when all the civil work has been finished, to avoid damage to the 

more delicate components by dust from the construction. To gain time it was decided to begin 

installation of the presses before the construction work was completed. When he learned about 

this, the vice president of Rockwell’s technical area came to Brazil to stop the installation of the 

equipment, alerting everyone to the risk that was being taken with a $20 million dollar piece of 

machinery. But Mattos convinced the American that it was impossible to stop: they were 

behind schedule, the high investments being made had caused an enormous burden for the 

company, and further delays could result in financial damage to the whole business. 

Everything possible was made to protect the machines. The place where they were being 

installed was isolated, the floor was covered with wet rags to absorb the dust, and industrial 

vacuum cleaners were bought for the employees to use on the machines. In the end, the press 

installations were inaugurated on time and the equipment put in operation without problems. 

Miscellaneous problems 

The web presses form a complex assembly which operates at high speed and due to that, 

require a period for the stabilization of the system, as well as a number of consultations to the 

supplier. In January 1992, the first tests were made, with the newspaper A Noticia; the printing 

installations in Benfica were inaugurated with success in July of the same year. The change in 

quality was dramatic: on Saturday, O Dia was printed for the last time in black and white in the 

old letterpresses on Rua Riachuelo, and on Sunday it was printed in offset with 32 color pages. 

The inauguration of the printing plant was made half-way through a year that showed weak 

sales for all newspapers. Besides, the company was investing in construction, training, while 

still operating with all the normal costs of its old printing plant. The competitors were skeptical 

as to the company’s capacity to shoulder the costs of the investments made, and didn’t give it 

too long a life. 

Another outside factor came to O Dia´s rescue in 1992, with the reduction on international 

prices of newsprint. This fact, together with the extended 180 day payment period, provided 

the company with the required cash leeway. For a company that used 20,000 tons of paper per 

year, this represented an enormous relief, as can be seen in Annex 1. 


Computerizing the newsroom 

The experience accumulated with the Benfica installations helped deal with the next stage, 

which was computerization of the newsroom. The objective was to eliminate all the physical 

means used until then, photographs, collages, cut outs etc., and see to it that the paper be 

created, edited, page setup, up to the pre-printing stage, all digitally. This meant going from the 

old typewriter to the complete electronic page making of the newspaper. 

Due to the peculiarities of a newspaper’s newsroom, it was there that the management team 

expected to find the greatest resistance against change. It was important to feed on the 

enthusiasm and initiative of the people regarding the changes that were to come, and which 

could not be forced upon them in a top down way. Here the greatest difficulty was not the 

purchase of the equipment necessary for computerizing the newsroom, since that would be an 

investment far smaller than the one for the printing plant. The problem would be to convince 

the editors to abandon the typewriter, the methods they were used to, and to adopt the new 

technology. 

As a start, Denis de Oliveira set up some equipment such as scanners, word processors and a 

Macintosh page maker in a separate room for the editors, in order for them to familiarize 

themselves with the technology. The prevailing opinion in the newsroom about the new 

equipment was made clear when a few days later, a notice was found on the door of the room 

with the words “Mata e Entocha” (literally “kill and set afire”a play-on-words in a clear 

derogatory allusion to the trademark of the Apple McIntosh computer used in the newsroom). 

Denis insisted and set up another page-maker for the Classified Ads, and still another in the 

newsroom. Slowly the resistance was reduced because of the immense increase in productivity 

offered by the new technologies, a fact that the newly hired journalists coming from Jornal do 

Brasil and O Globo already knew. 

Fortunately, the success of the printing plant and the effect it had inside and outside of the 

company gave rise to great enthusiasm and expectations, which was the impulse and motivation 

the people in the newsroom needed to also give their great technological jump forward. In 

January 1993, O Dia completed the computerization of both the newsroom and the commercial 

area, and one year later, in 1994, became the first newspaper in Brazil to have total digital 

page-making ability of text and image in all its supplements. 

The human side: the cultural changes 

To radically change the technology is not difficult, compared with what is necessary to change 

people’s attitudes and a company’s culture. The chosen path here was to contract new and 

young talents, not yet contaminated by the old ways, and at the same time try to pick out among 

the old timers, those with the most potential and motivation to be trained for their new jobs. 

There was great emphasis on adequate training of employees, because of the totally new 

technologies that were being introduced. The printers who would be responsible for operating 

the new equipment were sent to the United States for training at the manufacturer’s plant.. 


Even with that, this was a period of insecurity and uneasiness, since it was well known that new 

technologies required less people. In the pre-printing section alone, the change to new 

procedures reduced the personnel required from 130 to 50 in a period of just 8 months. In the 

printing sector, the change from the ground floor of the Rua do Riachuelo building to the new 

installations in Benfica meant a reduction in personnel from 110 to 60 people. In the overall 

total, the reduction was from 1,150 to 680 employees. “In a situation like this, of radical 

changes in technology and culture, traumas are inevitable. Problems must be explained, but if 

disagreeable measures must be taken, they should be done immediately, without delays”, says 

Denis de Oliveira. 

This cultural change did not come easily. Mattos recalls: “The newspapers were not used to 

worrying about results, and it was a lot of work to instill in the employees, specially those in 

the newsroom, the idea that a newspaper is a product, and as such should be useful, pleasant 

and enticing to the eyes of its readers.” 

Aguinaldo de Oliveira is responsible for the Benfica printing plant. His working hours go until 

the first hours in the evening, when the first supplements are printed. He carries with him a 

cellular phone and a beeper so as to be located in case of emergency; it is a reminder that this 

newspaper printing plant operates seven days a week, 365 days a year, non-stop. He 

comments: 

In 1991, when O Dia was hiring people for the new plant, I applied . I was a 

graduate in electronic engineering, and was coming from an experience of 

several years of work in a high quality printing plant. I was surprised to have 

been chosen for the job, because there were other candidates with many years 

more experience than myself in other major newspapers. I discovered 

however, that what was being introduced here was a different form of work 

where my experience in a high quality printing plant and the fact that I had 

never been exposed before to the traditional methods of a newspaper printing, 

were relevant And our working methods here are quite different from what 

exists in the printing plant of a traditional newspaper. Years ago, the printers 

of O Dia were looked down upon both inside and outside of the organization 

because of the low quality of their product. Nowadays we have a group of 

people running the printing plant with half the number of employees per 

machine compared with other newspapers, and despite that, printing one of 

the largest circulations in the country in six different editions, every day. 

Morale has increased tremendously and we became the benchmark of the 

industry. 

The O Dia installations in Benfica are impressive due their modern arquitecture esthetics and 

also striking for their simplicity. From the outside it seems more like an office building. 

Inside, with ample spaces and abundant natural light, the architecture was projected so as to 

allow the observation of all the printing stages of a newspaper, from one single point. In the 

center of the building, dividing it in half, standing three-stories high, are the enormous offset 

web presses. Where one might expect to find oil, grease and soot normally associated with 


large-size equipment, the walls and floors are light colored, the space is clean and the 

employees, even the maintenance workers, wear uniforms in light shades of beige. 

Changing the image of the newspaper 

The O Dia team knew that the image of an populist, sensationalist and politically partial 

newspaper acquired through many decades, would not change from one minute to the other. 

An annual budget of 4% of the revenue was set aside for marketing, almost double the world 

average for the industry; and now with a new finished product, it was necessary to show to the 

public the changes that had been made. Together with the inauguration of the new printing 

plant, a advertising campaign was launched, with the basic objective to do away with the 

prejudice against the newspaper, reinforced in the following years with other supporting 

campaigns. One of these showed famous cariocas (Rio residents) reading the paper, followed 

by “Have you noticed who’s reading O Dia?” It was a good natured campaign, and its purpose 

was to increase the social acceptance of the paper. O DIA also broke a taboo by advertising on 

the network of its major competitor, Jornal O GLOBO. 

As a result, from 93 to 94 the newspaper grew 13.8% in class A/B on Sundays, against the - 

3.8% drop of O Globo and -10.1% of Jornal do Brasil. In class C, O Dia grew 9.2% against 

1.7% of O Globo and the drop of -13.6% of Jornal do Brasil. v Market survey firm Marplan 

study for the 1st semester of 1995, show that from Monday to Saturday, O Dia is market leader, 

with more readers than O Globo and Jornal do Brasil together, and that in classes A/B readers, 

O Dia has more than Jornal do Brasil. 

The success in breaking the advertisers prejudice against the newspaper may be noted below, 

by the commercialization growth of the news segment, since associating their image with O 

Dia started having a positive effect. 

O DIA: Evolution of News Ad sales (1.000 cm) 

750 

700 

650 

600 

550 

500 

450 

400 

350 

300 

198 198 199 199 199 199 199 199 


The classified ads also showed a strong growth in this period, as seen below: 

O DIA: Evolution of Classified ads (1.000 cm) 

4250 

4000 

3750 

3500 

3250 

3000 

2750 

2500 

2250 

198 198 199 199 199 199 199 199 

The success of the strategy introduced in the company was recognized by publications outside 

the company, such as the leading weekly magazine VEJA, which published the following 

article in March 1995: 

The graphical improvements made in 1992, with the support of modern 

printing machinery, made the new O Dia definitely get away from its old 

image. In colors, it has become one of the most modern newspapers of the 

country in terms of presentation. The newsroom was computerized, first-line 

professionals have been hired. New products were created, such as the 

second daily supplement and the automobile supplement. The total 

investment in this modernization amounted to $42 million dollars. The 

paper’s circulation on Sundays went from 300,000 to 470,000 copies. vi 

Results 

Nearly seven years have passed, and the success of the strategy introduced by the newspaper O 

Dia´s administration cannot be ignored. The paper is the leader in newsstand sales, which has 

been up to now its only distribution channel, ranks third in Brazil in terms of circulation, with 

300,000 copies on weekdays and 570,000 on Sundays, and it is the newspaper with the largest 

number of readers in the country vii , with more classes A/B readers than Jornal do Brasil. viii The 

years 1994 and 1995 saw the result of the strategy adopted and the strong investments made 

from 1990 to 1992, and were the direct result of the changes which began in 1989. The growth 

in number of readers, in newsstand sales, the increase in sales of classified and news ads, the 

penetration in class B and the ever growing acceptance of the O Dia brand, show the success of 

the strategy they have adopted. It also shows that the result of a new strategy being introduced 


does not materialize immediately; the year 1992 showed the worst result for the company, 

although it represented the highest point of the investments made. 

The productivity indexes of the company show that the strategy allows the company to operate 

with greater efficiency than its competitors, thus obtaining an important competitive advantage. 

Comparing with its strongest and most direct competitor, the newspaper O Globo, O Dia shows 

productivity indexes twice as large in classified and news ads (6.757 against 3.306 

cm/employee/year in classifieds, and 1.523 against 844 in news ads), more than three times in 

terms of the number of copies per employee (177.696 x 56.954 copies/employee), and 1.5 times 

more in terms of income per employee (R$ 175.000 in O Dia, against R$ 120.000 in O Globo). 

Revenues and number of employees for O Globo are market estimates. 

The bet on the country’s development and increased purchasing power of the low income 

population was correct and O Dia´s big jump happened with the start of the Real Plan, in mid 

1994. At that moment, the company was already prepared and ready to grow, offering a 

product which was custom made for the new times. Several other new products were also 

launched, such as new supplements, classified ads by phone, an automated information system 

by phone, Mr. Genius and others. Of these new products, one of the most important are the 

regional editions. 

The Regional Editions 

Breaking the market into geographic regions was a project turned possible by the production 

flexibility offered by the new printing plant. Once more the paper adopted an innovative 

strategy in the market, which was to offer a personalized edition, focusing on the local interests 

of the population in each of the designated regions of the state, with their own characteristics, 

including classified and news ads. In 1993 the first three regional daily editions were 

published: Região Sul, Serrana and Região do Norte/Noroeste, and in 1995 two more regional 

editions were added: Niterói/São Gonçalo and Baixada Fluminense. With these five regional 

editions, as well as the Metropolitan edition, O Dia started to cover the whole State with 

personalized editions for each region. For the advertisers, the regional editions have the 

advantage of allowing a sharper focus on their target public. 

This process of geographic segmentation allowed an average growth, in the last two years, of 

70% in these regions, and offers a great future potential growth. Annex 7 shows the six daily 

regional editions, side by side. 


Conclusion 

A 

s the year 1996 began, Mattos thought of the future. In May 1996 the equipment 

which was to complete the last expansion capacity stage of the Benfica 

installations, was due to arrive, to increase this capacity to 18%. New future 

expansions would be made with the construction of another printing plant, 

probably in the interior of the State, to be closer to the consumer market and to reduce 

distribution costs. Other challenges appear on the horizon. The new electronic media which is 

beginning to spread through the society is at the same time a challenge and an opportunity, the 

target of careful analysis by the newspaper. Ruth de Aquino states: “In times of the Internet, 

we cannot think just in terms of a newspaper. There are many projects in the agenda, but these 

are still confidential.” 

In his room, in the newspaper head-office, on the same floor where everything started in that 

1989 meeting, Walter de Mattos Jr. recalls the events and the roads traveled during the past 

seven years: 

We did things that others with more experience told us would be impossible. 

We were extremely bold and took three great risks: First, to carry out the 

changes we did without first assuring all the necessary financing, second, to 

promote a total break with the past when we chose to go from last to first 

place in terms of printing technology; and third, to promote total 

computerization of the productive processes. All this surrounded by the 

fierce competition of a newspaper with a lot more money than we had, and 

which belonged to the largest communication group in this country, 

encompassing newspaper, TV network, cable TV, etc. But we made it. This 

path we chose to use, the success the company has had, all this was only 

possible because we had people committed to this dream of change. And this 

dream only came true because this dream was dreampt by more than one 

person. 


Annex List 

A. Jornal O Dia: Newsprint - Consumption and annual cost 

B. Jornal O Dia: Selected Financial Data. 

C. Criteria for Socio economic classification of the population. 

D. Distribution of Socio economic classes in Rio de Janeiro. 

E. Jornal O Dia: Number of readers - June/August 1994 

F. Jornal O Dia: Productivity Indicators 

G. Jornal O Dia: Geographical Segmentation - Regional Editions 

H. Organization Chart: Grupo Arca e Jornal O Dia. 

I. Annual media budget - Brazil 1989-1995 

J. Estimate of number of readers - Greater Rio: 1988-1995 

K. Penetration of O Dia by socio economic class - (ABA) in Greater Rio 

L. Paid advertising: Classified and News ads 

M. Penetration by socio economic class 

Bibliografical References 

A. Sandrone, Cícero; “40 anos de O Dia”; Manuscript 1991. 

B. Veja Rio, June/July 94, year 4 nº 36 pg. 6 - 11 

C. Veja Rio, March 95, year 5 nº 12 pg. 8 - 13 

D. Carvalho, Elisabeth; “Em dia com O DIA - O Dia em 24 horas”; Vídeo, 1995 

E. Carvalho, Elisabeth; “O DIA em três tempos”; Vídeo, 15/7/95 

F. Revista de Comunicação; Ano 11, nº 42, November 1995. pg 4 - 17 

G. Christensen, C.R, Andrews, K.R., Bower, J.L; “Business Policy - text and cases”; 

Richard D.Irwin, Inc, 1978. “The Saturday Evening Post case”, pg. 455 a 481. 

H. Jornal O Dia: Top de Marketing ADVB-1995. Standard, Ogilvy & Mather 

I. Porter, Michael, E.; “The competitive advantage of nations”, pg 180-181. The Free 

Press, USA, 1990. 

References 

1 Porter, Michael, E., The competitive advantage of nations, pg 180-181. The Free Press, USA, 1990 

1 Sandrone, Cícero. “40 anos de O DIA”. Manuscript, 1991. 

1 Fórum Exame, 24/10/94 

1 Revista Veja, edição 1427, ano 29, nº 3, 17/01/96 

1 Estudo Marplan. “Top de Marketing ADVB-1995”; Standard, Ogilvy % Mather 

1 Veja Rio março 95. ano 5 nº 12, pg. 8 - 13 

1 Source: Su - Sistema Ibope de Jornal - junho/agosto 1994 

1 Source: Estudos Marplan 1º semestre de 1995 


Exhibit 1 

Newsprint: Consumption and annual cost 

Jornal O DIA: Consumo anual de papel de imprensa (ton) 

35.000 

30.000 

25.000 

20.000 

15.000 

10.000 

1990 1991 1992 1993 1994 1995 

Jornal O DIA: Custo anual de papel (milhões de dólares) 

30 

25 

20 

15 

10 

5 

1990 1991 1992 1993 1994 1995 


Exhibit 2 

Selected Financial Indicators (US$ 1.000) 

1989 1990 1991 1992 1993 1994 1995 

Cuurent Assets 2.043 5.041 4.179 3.944 5.813 16.547 25.883 

Current Liabilities 2.660 2.547 6.917 16.996 10.843 24.297 29.132 

Long Term Assets 878 5.796 35.573 34.199 35.855 40.744 39.627 

Debt - 7.983 21.004 10.976 9.662 7.217 5.203 

Long Term Liabilities 306 8.490 23.364 13.810 12.739 11.260 9.657 

Equity 538 269 11.224 10.460 21.213 28.206 34.531 

Total Assets 3.504 11.305 41.505 41.266 44.794 63.763 73.320 

Income Statement 1989 1990 1991 1992 1993 1994 1995 

Revenues: 

Sales 23.098 27.094 32.114 33.027 39.277 44.844 59.064 

Services 22.803 29.357 33.065 35.694 40.293 48.064 58.541 

45.901 56.451 65.178 68.720 79.570 92.908 117.605 

Net Income 4.043 (340) 2.406 (1.251) 5.714 7.256 4.857 


Exhibit 3 

Critérios de Classificação Sócio-Econômica da População 

A classificação sócioeconômica da população é um recurso utilizado para segmentar o mercado 

de um produto, visando melhor focalizar a sua comercialização. Dois critérios distintos são 

utilizados: o da Associação Brasileira de Anunciantes (ABA), mais antigo, e o da Associação 

Brasileira de Institutos de Pesquisa de Mercado (ABIPEME). Os critérios e a pontuação adotados 

por cada um dos métodos é a seguinte: (Fonte: Marplan) 

a) Grau de instrução do chefe de família Pontuação Final por Método 

ABA 

ABIPEME 

Classe ABA ABIPEME 

analfabeto 0 0 A >35 >89 

primário 1 5 B 21a 34 59 a 88 

ginasial 3 10 C 10 a 20 35 a 58 

colegial 5 15 D 5 a 9 20 a 34 

superior 10 21 E 0 a 4 0 a 19 

b) Itens de conforto familiar - Critério ABA 

Quantidade 0 1 2 3 4 5 >6 

Automóvel 0 4 8 12 16 16 16 

Televisão 0 2 4 6 8 10 12 

Banheiro 0 2 4 6 8 10 12 

Empregada mensalista 0 6 12 18 24 24 24 

Radio 0 1 2 3 4 5 6 

Lava roupa 0 2 2 2 2 2 2 

Aspirador de pó 0 5 5 5 5 5 5 

c) Itens de conforto familiar - Critério ABIPEME 

Quantidade 0 1 2 3 4 5 >6 

Automóvel 0 4 9 13 18 22 26 

TV cores 0 4 7 11 14 18 22 

Banheiro 0 2 5 7 10 12 15 

Empregada mensalista 0 5 11 16 21 26 32 

Radio 0 2 3 5 6 8 9 

Lava roupa 0 8 8 8 8 8 8 

Vídeo cassete 0 10 10 10 10 10 10 

Aspirador de pó 0 6 6 6 6 6 6 

Geladeira 0 7 7 7 7 7 7 


EXHIBIT 4 

Socio economic Classes: Rio de Janeiro 

Distribuição percentual por classe sócio-econômica 

da população do Rio de Janeiro 

23% 

E 

B 

A 

2% 

14% 

35% 

D 

C 

Fonte: Marplan, 1995 

26% 

5.000.000 

Distribuição quantitativa das classes sócio-econômicas 

no Rio de Janeiro 

4.683.066 

4.000.000 

3.000.000 

3.478.849 

3.077.443 

2.000.000 

1.873.226 

1.000.000 

0 

267.604 

A B C D E 


Exhibit 5 

Jornal O Dia: Readers (1994) 

Número de Leitores: junho/agosto 94 

Jornal do Brasil 

466.500 

Estado de Minas 

Zero Hora 

O Estado de SP 

Folha de SP 

909.400 

996.900 

1.102.200 

1.148.900 

O Globo 

2.195.200 

O Dia 

3.131.800 

Fonte: SU - Sistema Ibope de Jornal 

O DIA: Número de Leitores: junho/agosto 94 

C 

1.118.700 

A/B 

500.300 

Fonte: SU - Sistema Ibope de Jornal 


Exhibit 6 - Productivity indicators 

16.000 

Tiragem/mês por Funcionário 

(1.000 exemplares) 

14.000 

12.000 

10.000 

8.000 

6.000 

4.000 

2.000 

0 

1988 1989 1990 1991 1992 1993 1994 1995 

700 

Centimetragem/mês por Funcionário: 

Classificados e Noticiário 

600 

500 

400 

300 

200 

100 

0 

1988 1989 1990 1991 1992 1993 1994 1995 

Receita por Funcionário (R$) 

140.000 

120.000 

100.000 

80.000 

60.000 

40.000 

20.000 

0 

1988 1989 1990 1991 1992 1993 1994 1995 


Exhibit 7 – Regional Editions 

Case Study: Jornal O DIA Prof. Luiz Eduardo T. Brandão 32

Exhibit 8 

Organizational Structure 

Grupo ARCA 

Editora O DIA Ltda. 

Jornal O DIA 

Radio FM O DIA Ltda. 

Radio O DIA 

Diaudio Ltda. 

Informacoes por telefone Mr. Genio 

Editora A Noticia Ltda. 

Jornal A Noticia 

Radio ARCA FM Ltda. 

Radio RPC 

Transdia Transportes e Locacao Ltda. 

Transporte e Locacao 

Ary Carvalho 

Presidente 

Ass. Qualidade 

Walter de Mattos Jr. 

Vice Presidente 

Eucimar de Oliveira 

Editor Chefe 

Antonio Kriegel 

Dir. Comercial 

Denis de Oliveira 

Dir. Operacoes e Proj 

Carlos Pinheiro 

Dir. Adm e Financeiro 

Editores 

Classificados 

Pre-Impressao 

Administracao 

Noticiario 

Impressao 

Financas 

Marketing 

Circulacao 

Informatica 

Case Study: Jornal O DIA 

Prof. Luiz Eduardo T. Brandão 

33

Exhibit 9 

Annual Budget per Media: 1989 - 1995 

1989 1990 1991 1992 1993 1994 Jan/Set 94 Jan/Set 95 95/94 

US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 % Var. 

TOTAL BRASIL 1.764.897 2.294.505 1.913.360 1.918.816 2.300.981 3.485.725 2.230.679 3.467.306 55,4 

- Direto 233.113 339.712 342.144 329.371 375.676 654.099 412.172 704.566 70,9 

- Via Agências 1.531.784 1.954.793 1.571.216 1.589.445 1.925.305 2.831.626 1.818.507 2.762.740 51,9 

Televisão 966.516 1.314.060 1.069.859 1.137.476 1.350.066 1.933.333 1.281.113 1.857.125 45,0 

- Direto 58.104 98.958 94.571 91.215 89.103 195.080 124.984 193.078 54,5 

- Via Agências 908.412 1.215.102 975.288 1.046.261 1.260.963 1.788.253 1.156.129 16.640.477 1.339, 

3 

Rádio 47.755 109.615 98.294 93.419 93.146 149.377 95.863 155.836 62,6 

- Direto 11.486 22.995 23.067 23.772 25.211 56.644 37.179 54.787 47,4 

- Via Agências 36.269 86.620 75.227 69.647 67.935 92.733 58.684 101.049 72,2 

Jornais 485.582 588.151 524.998 467.156 604.888 904.601 579.244 1.032.307 78,2 

- Direto 97.951 135.129 154.245 148.724 179.317 253.294 158.867 298.044 87,6 

- Via Agências 386.631 453.022 370.753 318.432 425.571 651.307 420.377 734.263 74,7 

Revistas 223.863 220.787 176.405 161.213 183.611 294.505 173.681 305.754 76,0 

- Direto 44.832 56.696 50.266 40.415 50.229 79.466 46.324 94.744 104,5 

- Via Agências 179.031 164.091 126.139 120.798 133.382 215.039 127.357 2.110.010 1.556, 

8 

Outdoor 25.913 45.559 33.805 51.715 57.852 129.104 84.588 82.941 (1,9) 

- Direto 5.689 13.172 12.346 18.719 23.131 48.805 31.378 33.730 7,5 

- Via Agências 20.224 32.387 21.459 32.996 34.721 80.299 53.209 49.211 (7,5) 

Externo 16.268 16.333 9.999 7.838 11.398 24.806 16.189 33.343 106,0 

- Direto 15.051 12.762 7.649 6.526 8.685 20.810 13.440 30.182 124,6 

- Via Agências 1.217 3.571 2.350 1.312 2.713 3.996 2.749 3.161 15,0 


Exhibit 9 

Annual Budget per Media: 1989 - 1995 

TOTAL RIO 263.274 332.526 280.184 300.591 352.434 541.527 346.625 525.283 51,5 

- Direto 44.315 52.116 59.746 69.299 70.885 116.970 77.629 109.828 41,5 

- Via Agências 218.959 280.410 220.438 231.292 281.549 424.557 268.996 415.455 54,4 

Televisão 114.797 164.257 125.311 135.233 164.941 264.159 170.909 242.352 41,8 

- Direto 2.793 7.587 7.564 6.479 5.699 28.271 22.101 17.386 (21,3) 

- Via Agências 112.004 156.670 117.747 128.754 159.242 235.888 148.808 224.966 51,2 

Rádio 13.220 26.695 18.868 16.904 17.582 28.767 19.311 30.760 59,3 

- Direto 3.347 4.429 4.517 6.618 6.128 8.601 6.102 6.318 3,5 

- Via Agências 9.873 22.266 14.351 10.286 11.454 20.166 13.209 24.442 85,0 

Jornais 132.721 137.763 132.858 143.190 164.431 235.479 148.273 243.889 64,5 

- Direto 37.825 38.842 46.521 54.565 57.001 74.870 46.272 82.560 78,4 

- Via Agências 94.896 98.921 86.337 88.625 107.430 160.609 102.001 161.329 58,2 

Outdoor 2.536 3.811 3.147 5.264 5.480 13.122 8.132 8.282 1,8 

- Direto 350 1.258 1.144 1.637 2.057 5.228 3.154 3.564 13,0 

- Via Agências 2.186 2.553 2.003 3.627 3.423 7.894 4.978 4.718 (5,2) 

CLASSIFICADOS 

- Brasil 219.331 240.395 219.878 172.269 245.043 364.571 235.429 430.741 83,0 

- Rio de Janeiro 51.757 54.538 51.801 46.615 55.588 77.286 49.508 95.452 92,8 

% RJ 23,6 22,7 23,6 27,1 22,7 21,2 21,0 22,2 

INDETERMINADOS 

- Brasil 266.251 347.756 305.120 294.887 359.845 540.030 343.815 601.565 75,0 

- Rio de Janeiro 80.964 83.225 81.057 96.575 108.843 158.193 98.765 148.437 50,3 

% RJ 30,4 23,9 26,6 32,7 30,2 29,3 28,7 24,7 


Exhibit 10 

Estimate of number of newspaper readers in the Greater Rio: 1988 - 1995 

Marplan 1988 1989 1990 1991 1992 1993 1994 J/S 95 

(Ajustado) (000) (000) (000) (000) (000) (000) (000) (000) 

Universo (15/65) 5.244 5.412 5.586 5.764 5.949 6.139 6.335 6.537 

Lêem Jornal: 3.236 3.379 3.386 3.778 3.848 4.164 4.127 4.483 

Lêem Domingos: 2.941 3.106 2.895 3.184 3.304 3.709 3.717 3.944 

- O DIA 1.292 1.319 1.351 1.533 1.515 1.969 2.079 2.068 

- O Globo 1.382 1.607 1.309 1.546 1.723 1.778 1.700 2.073 

- Jornal do Brasil 571 581 533 457 483 430 352 331 

Lêem Segundas: 1.636 1.793 1.760 2.020 2.176 2.302 1.969 2.320 

- O DIA 857 897 819 1.003 992 1.202 1.105 1.285 

- O Globo 585 725 587 702 966 1.001 810 957 


Lêem Ter./Sáb. 1.553 1.745 1.757 2.031 2.071 2.208 1.979 2.032 

- O DIA 755 797 765 955 911 1.098 1.052 1.121 

- O Globo 581 731 585 702 919 987 836 818 



Domingo 

Exhibit 11 

Penetração de O DIA por Classe ABA 

Grande Rio de Janeiro (1.000 leitores) 

Ano A B C D E Total 

1989 6 16 32 26 12 24 

1990 7 19 30 26 10 24 

1991 4 16 33 28 15 27 

1992 8 18 30 28 12 25 

1993 8 23 40 33 20 32 

1994 8 27 38 34 18 33 

J/S 1995 10 22 40 32 17 32 

Segundas-Feira 


1989 6 15 22 15 7 17 

1990 7 18 20 12 4 15 

1991 7 17 23 14 10 17 

1992 8 20 21 13 6 17 

1993 9 22 27 14 5 20 

1994 6 22 23 12 12 17 

J/S 1995 12 24 25 14 7 20 

Terça a Sábado 


1989 6 14 19 14 3 15 

1990 8 16 18 11 5 14 

1991 6 15 22 14 7 17 

1992 6 17 19 13 4 15 

1993 8 20 24 14 4 18 

1994 8 21 21 12 9 17 

J/S 1995 11 20 22 13 6 17 

Fonte: Estudos Marplan 

Grande Rio de Janeiro: Leitores de jornal, por classe 

Terça a Sábado Total A B C D E 

O DIA 1.070 19 183 389 339 140 

O Globo 761 61 419 208 45 28 

Jornal do Brasil 214 26 151 32 3 2 

Fonte: Marplan, 1º Semestre 1995 


Exhibit 12 

Paid Publicity: Classifieds and others 

Classificados (1.000 cm) 

Noticiário (1.000 cm) 

O DIA O Globo J. Brasil ODIA O Globo J. Brasil 

1988 2.485 4.552 3.409 330 1.320 986 

1989 3.388 5.280 4.311 355 1.606 1.020 

1990 3.322 5.165 4.079 410 1.660 885 

1991 3.167 5.309 2.872 518 1.592 943 

1992 2.639 5.057 3.017 470 1.328 855 

1993 3.007 6.476 3.553 532 1.534 960 

1994 3.475 7.089 2.899 591 1.781 921 

1995 4.078 8.792 2.846 750 2.246 980 

Total newspaper Sales per year 

O DIA O Globo J. do Brasil Total Geral 

1988 87.332.673 95.463.655 60.795.211 243.591.539 

1989 87.812.854 105.051.533 61.800.556 254.664.943 

1990 86.938.047 104.025.470 56.411.131 247.374.648 

1991 100.523.685 112.230.699 56.228.581 268.982.965 

1992 87.931.032 108.029.505 51.742.627 247.703.164 

1993 96.509.118 111.842.655 48.634.521 256.986.294 

1994 109.085.611 121.631.573 45.116.777 275.833.961 

1995 123.142.912 151.497.457 42.272.055 316.912.424 

Sunday Sales: Montly Average 


1988 345.650 442.869 245.403 1.033.922 

1989 329.589 480.995 248.335 1.058.919 

1990 344.765 478.457 223.171 1.046.393 

1991 415.598 538.354 215.994 1.169.946 

1992 372.764 505.767 194.036 1.072.568 

1993 448.516 525.505 182.558 1.156.579 

1994 499.410 611.720 163.703 1.274.833 

1995 593.289 854.113 149.258 1.596.660 


Exhibit 13 

Penetration per Socio Economic Class 

O DIA: Participação por Classe - terça a sábado 

100% 

80% 

60% 

40% 

20% 

0% 

1989 1990 1991 1992 1993 1994 J/S 1995 

A B C D E 

Weekday Circulation: Monthly Average 


1988 220.855 230.737 152.954 604.546 

1989 225.328 254.950 155.900 636.178 

1990 220.317 252.661 143.149 616.127 

1991 252.251 269.109 143.751 665.111 

1992 219.413 261.892 133.426 614.730 

1993 233.907 269.982 125.045 628.933 

1994 265.501 287.244 116.864 669.609 

1995 291.979 338.021 109.843 739.843 

Source: O DIA / IVC 

Newspaper readers: Penetration per Class(%): ABA 

A B C D E 

1988 94 82 70 46 20 

1989 92 84 71 44 19 

1990 91 83 66 46 22 

1991 80 86 70 53 31 

1992 93 85 68 49 28 

1993 95 89 73 53 34 

1994 94 86 69 51 35 

1995 94 87 73 52 37

Case Study - Newspaper O DIA - IAG - A Escola de NegÃ³cios da ...

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