it & industrial marketing

7/29/2019 IT & Industrial Marketing

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IT Services: Changing face of Industrial

Marketing in India Post Liberalization

Abstract

The Information Communication Technology and Electronics is the world's largest and fastest

growing industry and is increasingly finding applications in all sectors of the economy. Today,

India is a large, vibrant and one of the fastest growing economies in the world. As a result of

impressive growth of the economy, steadily increasing purchasing power of the people and

aspirations of the young, India is one of the fastest growing markets for electronic gadgets. The

domestic demand for electronic hardware is estimated at US$ 400 billion by 2020.

High offshore component of delivery and superior execution in multi-location delivery continue to

be key differentiators. Broad-based industry structure; IT led by large Indian firms, BPO(Business Process Outsourcing) by a mix of Indian and MNC third-party providers and captives,

reflects the depth of the supply-base. While the larger players continue to lead growth, gradually

increasing their share in the industry aggregate; several high-performing Small and Medium

Enterprises (SMEs) also stand out.

With a large pool of skilled manpower-chartered accountants, doctors, MBAs, lawyers, research

analysts-India would be able to add value to the global KPO business and its high-end

processes like valuation research, investment research, patent filing, legal and insurance claims

processing, online teaching, media content supply, among others. Skilled manpower and multi

lingual capabilities combined with the advantages of lower costs can help the country to emerge

as a frontrunner in KPO (Knowledge Process Outsourcing), globally. Increasing adoption oftechnology in the domestic industries is already beginning to reflect in their enhanced

performance and competitiveness.

In addition to all above, with the backdrop of any services industry, one can examine the newly

attained focus on branding. Top Indian IT companies, for instance, are stepping up investments

for branding initiatives, so that they can be counted among the top players on the global stage.

Infosys spent INR 70 crores in 2006 on branding, and decided to go for a rebranding exercise to

change its positioning. Wipro followed in January 2007, launching the Applied Innovation

campaign, and increasing marketing and branding spends by 70 percent. And TCS was not far

behind, with the launch of ExperienceCertainty, spending close to $ 10 million on print media

in its first phase.

The objective of the case study is to study changes in the industrial marketing in Indian IT

industry.

Key words: Outsourcing, SME, Branding, Innovation


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1. Introduction

The Information technology industry in India has gained a brand identity as a knowledge

economy due to its IT and ITES (Information Technology Enabled Services) sector. The IT

ITES industry has two major components: IT Services and business process outsourcing (BPO).

The growth in the service sector in India has been led by the ITITES sector, contributingsubstantially to increase in GDP, employment, and exports. The sector has increased its

contribution to India's GDP from 1.2% in FY1998 to 7.5% in FY2012. According to NASSCOM,

the ITBPO sector in India aggregated revenues of US$100 billion in FY2012, where export and

domestic revenue stood at US$69.1 billion and US$31.7 billion respectively, growing by over

9%. The major cities that account for about nearly 90% of this sectors exports are Bangalore,

Hyderabad, Chennai, Delhi, Mumbai. Bangalore is considered to be the Silicon Valley of India

because it is the leading IT exporter. Export dominate the ITITES industry, and constitute

about 77% of the total industry revenue. Though the ITITES sector is export driven, the

domestic market is also significant with a robust revenue growth. The industrys share of total

Indian exports (merchandise plus services) increased from less than 4% in FY1998 to about

25% in FY2012. According to Gartner, the "Top Five Indian IT Services Providers" are TataConsultancy Services, Infosys, Cognizant, Wipro and HCL Technologies.

This sector has also led to massive employment generation. The industry continues to be a net

employment generator - expected to add 230,000 jobs in FY2012, thus providing direct

employment to about 2.8 million, and indirectly employing 8.9 million people. Generally

dominant player in the global outsourcing sector. However, the sector continues to face

challenges of competitiveness in the globalized world, particularly from countries like China and

Philippines.

Present study focuses only the industrial marketing in the IT sector and focuses on the various

factors relating to IT services industry.


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2. Literature Review

A literature review of Indian IT industry shows the changes occurring in the industry across

various sectors like Telecom, banking, education, healthcare, SMEs etc. over a number of years

owing to the new trends and technology shift like Cloud- Computing and emergence of Big Data

in the industry. The IT companies in India have evolved over the years from outsourcing firms tolarge software developers and solutions providers. This huge shift has been possible due to the

government initiatives like creations of ITeS Special Economic Zones, increasing focus on

target market, proactively tracking of customer need, client developments, talent retention

opening up of communication channels, use of technology, building of alliances and delivering

sales and marketing excellence.

Understanding the industrial marketing in case of IT industry requires analyzing the reasons

which have led to the growth and development of the IT companies in India and understanding

their business model.


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3. Discussion & Views

The various factors in industrial marketing that have led to the growth success of IT service

sector companies in India have been discussed below. These factors are:

Segmentation: IT companies have well segmented their customers into different buckets on

the basis of the revenue generated from them. They have also used this segmentation to build

units around their key clients to be customer-centric and provide them end-to-end solution. The

segmentation followed is not only on the basis of revenue bucket but also on the geographical

concentration of the customers.

Pricing: IT companies have priced their service offerings to fit to the needs of their customers

depending on their key requirements. Companies like TCS, Infosys etc, are now targeting the

Small and Medium Businesses (SMBs) by building platforms for them on cloud-computing

technology so that they need not have to invest in any IT assets or employ IT staffs.

For example, TCS-built world-class business automation suite to SMBs, eliminating the need for

them to invest in any IT assets or employ IT staff. Clients pay a monthly rental for the software,as per usage, instead of the traditional one-time license.

Technology: Technology forms the basis of the any IT Company. IT companies are therefore

investing more in futuristic areas related to healthcare and life sciences, material science,

computer science, engineering, innovation labs and as well as forming alliances with other

global companies to acquire knowledge and technology to help their customers by delivering

more value to them.

Innovation and R&D: IT Companies continuously engage in customer-focused innovation and

launches new offerings that use technology to address its clients business problems. Some of

the newer service offerings of TCS are: new software products for banks, retail and hi-techindustries, mobility solutions, etc.

The IT Companies R&D continued to make a difference to its customers and society whilst

improving quality and efficiency of current offerings, the customer focused technology initiatives

have helped their customers prepare for future challenges.

Brand Communication:

IT Services industry has also adopted the process of building brand awareness and

communicating the same to their customers over the years to propel their growth. The IT

companies have well commiunicated their core competencies to their target customers bybranding means. The table below shows how Wipro has communicated its brand over the

years. A similar communication strategy can be by others IT companies also highlighting their

core competencies and brand promise to their target customers to build on their brand

reputation as shown below:

1. Sincerity:Wipros Applying Thought, Applied Innovation

2. Ruggedness:Infosyss Powered by intellect, driven by passion


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3. Sophistication:Accentures High performance delivered

4. Excitement:Cognizants Passion for making a difference

5. Competency:TCSs Experience Certainty


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4. Conclusion

Embracing emerging technologies, increased customer-centricity, deepening focus on new

markets, adopting new business models are some successful growth strategies followed by the

IT industry. Thus the emerged trends that can be seen Indian IT industry industrial marketing

scenario are:

Integrated service offerings including Infrastructure Management and Analytics with

strong domain focus.

Provide full array of cost savings options (e.g., labor, technology, new delivery models).

Diversify geographic and industry targets as well as delivery locations. Invest in local

(developed markets) to ensure full access to the market.

Target service areas that bring value, including operational excellence and business

flexibility, and emphasize industry specific solutions for specific needs.

Focus on non-linear models like creating IP, Outcome based pricing Integrate new

delivery models (e.g., software as a service [SaaS] and platform) to ensure competitive

differentiation, focusing on SMB and emerging markets Explore innovative marketing and sales channels Target Niche solutions specific to

individual geographies like Islamic Banking for Middle East, Distance English education

for China and South East Asia etc.


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References:

Mathur, Somesh K., Indian Information Technology Industry: Past, Present and

Future for National Development, Journal Paper

Tata Consultancy Services,Annual Report 2011-12

NASSCOM Resource Centre/Indian IT-BPO Industry, Website:http://www.nasscom.org/indian-itbpo-industry

http://www.nestorsourcing.com/ Future of IT Industry in India 2012 2013

http://en.wikipedia.org/wiki/Information_technology_in_India

http://www.thehindubusinessline.com/industry-and-economy/info-tech/tcs-

expects-stable pricing-in-2013-report/article4216442.ece

http://www.nasscom.org

http://www.it-taskforce.com

http://www.archive.globalservicesmedia.com/News/Home/NASSCOM-2012--

Milestone-as -Indian-IT-BPO-Sector-Revenue-Estimated-to-Cross-USD KPMG(2006, January) Report on Indian IT Sector Sankaran Krishna(2005),

India: Globalization and IT Development. South Asian Journal.

it & industrial marketing

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