DETROIT, AUG. 13 -- The chairman of Knight-Ridder Inc., parent of the Detroit Free Press, said yesterday that its aggressive marketing campaign was aimed at competing with the Detroit News and denied suggestions that the strategy was aimed at reaching a joint operating agreement with the rival newspaper.

Alvah H. Chapman Jr. was questioned by Duane Ice, attorney for newspaper employe unions that, along with Mayor Coleman Young, oppose a partial merger of the two papers.

In a Justice Department hearing on the proposal, Ice produced a memo to Chapman from Knight-Ridder President James Batten that referred to losses at both the Free Press and the News in 1982 and 1983.

"We had hoped that this kind of financial pain would be sufficient to bring the News to the negotiating table receptive to a joint operating agency on terms Knight-Ridder would find acceptable," the Batten memo read.

It proposed stepping up competition with the News on all fronts, and Chapman said the proposal grew into a Free Press program called Operation Tiger.

Chapman has not denied that he regarded a joint operating agreement as a possible means of keeping the Free Press alive after concluding in the early 1980s that Detroit could not support two independent, profitable newspapers.

But he denied that was the goal of the circulation-building offensive.

"The goal of Tiger was to improve the market share of the Free Press," he said.

Chapman said earlier this week that he will recommend closing the Free Press if the Justice Department denies Knight-Ridder a limited antitrust exemption for the proposed joint operating agreement with the News, which is owned by Gannett Co.

Gannett owns the nation's largest newspaper group; Knight-Ridder the second-largest.

Combining Free Press and News advertising, circulation and production operations would let the papers reduce their combined payrolls by 600 to 1,000 employes, cut circulation and newsprint costs by publishing one combined edition on weekends, and raise newsstand and advertising prices, Chapman said.

During the week, the Free Press would publish in the mornings and the News in the afternoons.

Gannett and Knight-Ridder say the News and Free Press lost $142 million from 1981 through the first quarter of 1987.

Under the Newspaper Preservation Act of 1970, U.S. Attorney General Edwin Meese III can approve a joint operating agreement if one paper is in danger of failing and the agreement would preserve independent editorial voices.

Young has expressed fear of decreased editorial diversity under such an arrangement, and newspaper employe unions fear job losses. Each paper employs about 2,200 people.