Branding Strategies for IT Industries

A dissertation submitted in partial fulfillment of

the requirements for the award of MBA degree of
Bangalore University.

Submitted By

Mr. Sudheesh K.
Reg.No-04XQCM6100

Under the guidance of

Prof. Ramgopal S.
Internal Guide

M.P. Birla Institute of Management

Associate Bhartiya Vidya Bhavan.
Bangalore-560001
2004-2006
 DECLARATION

I hereby declare that the research work embodied in this dissertation entitled

“Branding Strategies for IT Industries”,

has been carried out by me in bangalore under the guidance and supervision of Prof.

Ramgopal S, M. P. Birla Institute of Management, Bangalore.

I also declare that this dissertation has not been submitted to any

University/Institution elsewhere for the award of any Degree/Diploma.

Place: Bangalore
Date: Sudheesh K.

2
 GUIDE CERTIFICATE

This is to certify that Mr. Sudheesh K., bearing registration no.04XQCM6100 has

undertaken a research project and has prepared a report titled

“Branding Strategies for IT industries”,

under my guidance. This has not formed a basis for the award of any degree/ diploma

for any other university.

Place: Bangalore

Date: Prof. Ramgopal S.

3
 PRINCIPAL’S CERTIFICATE

This is to certify that Mr. Sudheesh K., bearing registration no.04XQCM6100 has

undertaken a research project and has prepared a report titled

“Branding Strategies for IT industries”,

under guidance of Prof Ramgopal S. This has not formed a basis for the award of

any degree/ diploma for any other university/Institution.

Place: Bangalore

Date:

Dr.Nagesh.S.Malavalli

4
 CONTENTS
Chapter
Chapter Name Page No.
No.

Executive Summary 1

1. Introduction to Brand management 3

2. Design of the study and the Methodology 12

3. Review of Literature 16

4. Industry Profile 20

5. Analysis and Interpretation 50

6. Summary of Findings 60

7. Recommendations 64

8. Bibliography 66

9 Annexures 68

5
 List of Graphs used

Sl No: Graph About Page No:

1 Profile of the Respondents ( Freshers) 51

2 Salary Expectations of the Respondents 52
3 Choice of a future job 53
4 Expectations of Respondents about the job 54
5 Importance of brand image in joining a job 55
6 Building brand strategies in general 56
7 Profile of the respondents ( Working Professionals) 57
8 Age of the respondents 58
9 How did you get into the current organization 59

6
 BRANDING STRATEGIES FOR IT COMPANIES

A brand is the psychological and emotional identifier that gives a

company value. It is a strong, consistent message about the value of your
company. A company controls the message through marketing,
advertising, customer service, and all interaction with the market.
An IT company with its operations in India and concentrating
mainly on the US market will be urging for a brand value in the US
market and in the process tend to ignore the importance of building a
brand image in the home country. Such companies will be under the
impression that brand building within its home country might not bring
any direct revenue or add any new customers to it. This project is an
attempt to explore the relevance, importance and benefits of creating a
brand image in its home country for IT companies.
A representative sample of 25 IT professionals from different
companies and 25 freshers who are the potential employees in such
companies are randomly chosen and their perception towards the brand
image of the company they want to work with is analyzed. The other
factors like salary, growth opportunity, work culture, job profile…etc are
also considered.
Finally, after deriving the conclusion that brand image plays a
major role in employee’s perception towards the company, various
strategies are identified and recommended for an IT company which
would help in brand building.

7
 Chapter 2

Introduction to
Brand Management

8
What is a brand?
A brand is a name, term, sign, symbol or design, or a combination of them,
intended to identify the goods and services of one company and to differentiate them
from those of competitors. It is the place you own in the minds of people who matter
to you most. It is the psychological and emotional identifier that gives a company
value.

High brand equity provides a number of competitive advantages:

• The company will enjoy reduced marketing costs because of consumer
brand awareness and loyalty.
• The company will have more trade leverage in bargaining.
• The company can charge a higher price than its competitors because
the brand has higher perceived quality.
• The company can more easily launch extensions because the brand
name carries high credibility.
• The brand offers the company some defense against price competition.

A brand name needs to be carefully managed so that its quality doesn’t

depreciate. This requires maintaining or improving brand awareness, perceived
quality and functionality, and positive associations. These tasks require continuous
R&D investment, skillful advertising, and excellent trade and consumer service.

Truly effective brand building doesn't start with a series of ads or press
releases; it starts with your employees, the 24x7 "who" behind your brand.
Unfortunately, many companies spend more time, money and manpower
communicating externally rather than internally. Their "front lines," especially non-
management staff, are sometimes clueless about the brand. Creating a successful
brand starts at home. We create strategies and communication tactics that ensure
internal Brand Ambassadors understand and can effectively communicate key
messages to external audiences.

9
 Creating a proactive integrated marketing program includes all the essential
ingredients of attraction marketing: media relations, sales support, advertising,
collateral development, stakeholder relations, special events and interactive
marketing. All these elements, when combined with an effective strategy, build a
strong brand in the minds of external audiences. Our targeted approach yields the
exposure, enhanced awareness and assistance you need to achieve your business
objectives

Developing a Brand
A brand is a strong, consistent message about the value of your company. You
control the message through marketing, advertising, customer service, and all
interaction between your company and the market.
You don't need to be as large as Coca-Cola to have a brand. Building a brand involves
the same process, whether your company is two weeks or two years old, whether you
have 100 employees or none.
Here is how a brand typically develops:

Define the message. What is valuable about your company? Why do your customers
care? What's so different about your company? The answers to these questions should
form the core statement about your company's service, product, relationships, and
culture: You are faster and have better service (Federal Express). You have
unrelenting, perfect customer care (Nordstrom). Your products are edgy, new,
independent, high-performance (Nike).

Build the image. How does this translate to your overall image? Both visually and
verbally, you need to consistently communicate the company's message about its
value.

Market the image. How can you aggressively get the word out? The message means
nothing until your market hears it. Your marketing and advertising campaigns need to
communicate the company's value and establish its image.

10
Live the message. Is the message real? Does the customer agree with you? Here
comes the tricky, long-term part: You need to deliver on the implied promise. The
customer's experience must match the image, or the whole house of cards crashes. If
you market your company as faster and better but the customer disagrees, the brand
suffers.
In reality, this process is not linear, but circular. Your brand will evolve in
response to the customer and the evolution of your market and products. For example,
if you have a small business or start-up, you may believe that the value of your
product and company lies in one area. As you market your company and product,
your customers may communicate that they value something else. Then your product
and company may evolve toward that new value, bringing you to new markets.

Jagdeep Kapoor, the author of the famous book “24 Brand Mantras” has
presented 24 action oriented brand mantras, which will help a marketer develop an
effective brand strategy. The unique feature of these mantras and, therefore, of this
book is that they focus on building brands by appealing to both the rational mind and
the emotions. Often, in planning a brand strategy, the appeal is to only one of these
two aspects. For a brand to succeed, it is important that it delight the customer which
can only happen when the brand finds a place in both the mind and heart of the
consumer.

These 24 mantras are as given below. These are broadly classified as ‘Mantras
for the Mind’ and “Mantras for the Heart”.

Mantras for the Mind:

1. To build a big brand, adopt a short brand name
2. Don’t let jazzy research replace common sense
3. Use benefit segmentation to build brands
4. Sample to sell ample
5. Don’t hesitate to communicate
6. Like salt, use advertising in the right proportion

11
 7. What is visible, sells
8. Brand images are fragile, handle with care
9. Your consumer’s needs come first
10. Don’t under price yourself
11. Brands must make profit, not only noise
12. Focus on consumption rather than purchase

Mantras for the Heart

13. Build relationships to build brands
14. Respect your retailers
15. Avoid generality to give your brand a personality
16. Nurture your brand as you would a child
17. Service is the first step to a great brand
18. Remember, consumers look for perceived value in brands
19. Don’t sell the right product to the wrong audience
20. Pay heed to consumer emotions
21. Don’t prejudge your consumer
22. Respect the local consumer
23. Be honest, don’t con.

Defining Your Brand

No matter how big or small your company, developing an employer brand is
essentially a two-step process. The first step is identifying what your brand
represents. Many startups cherish the company culture that a core group of original
employees has helped create. For such startups, the challenge is not to create new
brands from scratch, but to articulate their existing brands in messages that can be
delivered to both existing and potential employees.

Communicating Your Brand

The second step is to figure out how you're going to communicate your brand
to both your existing employees and potential employees. For startups that lack the

12
resources to conduct large-scale branding campaigns, developing inexpensive,
creative ways to advertise an employer's brand is essential.
It's important to note that retention of and communication with existing employees is
as much a part of brand building as any message that your company sends to potential
employees.

"Retention and recruitment are two sides of the same coin," says Hodes. A
company must make sure that the atmosphere within the company is consistent with
the message it is delivering to potential employees.

What follows are a few inexpensive tactics for startups trying to build an
employer brand.
Unique benefits or office policies. These are a great way to generate buzz
around your workplace. Examples include allowing dogs in the office, offering
discounts to fitness clubs, and providing sabbaticals for long-time employees. Your
policies should reinforce the brand that you are trying to establish. If providing a
good work/life balance is an important part of your company, then you should be able
to point to several policies that allow your employees to achieve that balance.
Employee referral programs. Employee referral programs can play a
valuable part in communicating your employer brand--both inside and outside your
company. Referral programs build morale and help retain and attract people by
reminding employees why your company is a great place to work. Be sure to
emphasize the positives of working for your company along with the financial
rewards of providing a referral.
Awards programs. Publicly recognizing employees is a great way to
reinforce your brand with existing employees. Create a regular reward program that
relates directly to the core values that are central to your company's success. The
rewards do not have to be limited to cash bonuses. Give gifts that show a personal
touch.
Parties. Even if you can't afford to have a famous musician play at it, a party
is a great way to generate buzz about your company--provided it is well promoted,

13
both inside and outside your company. Reward employees who take the time to plan
your company parties. Emphasize that the event is both a celebration and a recruiting
vehicle.
Sponsoring events. Sponsorship of events, while somewhat costly, can be an
effective brand-building tool--if the event reaches your target audience. If your goal is
to recruit more programmers, make sure the event you're sponsoring is both
interesting to and attended by savvy programmers.
Recruitment website. The career section of your company's website should
play an integral part of any branding effort. For many job seekers, it will be the first
interaction they have with your company. Post your company's core values on your
website. Profile individual employees and provide quotes about why they enjoy
working at your company.

Here is the 'Seven Steps to Brand-Led Marketing'.

Step 1: Become truly 'Marketing Minded'
When many people think of marketing they think of meeting customers needs.
Understanding and responding to changing customer needs is essential, but there is
another dimension. Brand-led marketing ensures that you meet customer needs in a
way that is different from your competitors. If you can't find this point of difference
you're in danger of becoming a price-based commodity.
Ask yourself:
Do my customers really see me as different from my closest competitors? How/Why?
What can I do to make my business more distinctive and appealing to help secure
them as long-term and profitable customers?

Step 2: Monitor the Changing Environment

We live in a rapidly changing world of many threats and opportunities. Few business
managers take adequate time out to stop, look around, and reflect on how these
changes might have an impact. As a result, most companies die young.

14
Ask yourself, at least once a quarter:
What are the changing consumer trends, competitor activity, legislation, economic
trends or technology developments that might have an impact on my business?

Step 3: Have a Meaningful Vision for your Business and your Brand
A business Vision (or Mission) has a number or roles: most important of which are to
inspire and guide. Too many business Visions include words like 'leader', 'best',
'preeminent', 'most successful'. Words like this can mean many different things to
different people. Because of that they are of limited help in inspiring or guiding the
behavior of the business team. Brand Visions have just the same function. Make sure
that you have a written Vision for your brand that is strong enough to inspire and
guide behavior.
Ask yourself:
Do I have a brand Vision that everyone understands and has bought into?
How might I improve my brand Vision, so it is a stronger inspiration and guide?

Step 4: Build Your Brand 'From the Inside Out'

Building a brand is not just about advertising or 'marketing communications'. Nor is it
just about your 'product' or 'service'. Your brand is really what your customers think
of you, and how much trust they have in you. To build a strong brand you have to
have a clear idea of how you want to be thought of, and then consider everything that
you say and do.
In everything that you say and do, ask yourself:
Will this get me closer to where I want to be in the mind of my customers?

Step 5: Plan for Success

There is a phrase: "If you don't know where you want to go, any road will get you
there". This is true in life, and it is true in business. If you want to succeed you have
to have clear, measurable objectives - you have to know where you want to get to!

15
Ask yourself:
Do I have a brand plan with clear, measurable objectives? (And am I measuring the
things that are really important!).

Step 6: Become a 'Learning Business'

Continuously improving your brand-led effectiveness is essential to long-term
success. The best way to achieve this is to ensure that you take a little time to become
a 'Learning Business' by building learning into your processes.
For every marketing initiative you undertake, ask yourself:
How can I build learning into this, so that I can find out what works and what doesn't,
and do it better next time?

Step 7: Be Prepared to Change

What worked in the past may not work in the future. If you can achieve steps 1 - 6
that's great, but you have to go one step further. You have to be prepared to change.
Don't just do the same things better, look around for new ways of pursuing your
vision and your desired brand. Explore, experiment and anticipate.
Ask yourself:
Is there an opportunity to break out, and achieve a step-change from where I am now?

16
Design of the Study
and
The Methodology

17
3.1 Introduction
Each and every company wants to create its own brand image. Now days it is
difficult to find a company which does not try to create its own brand image. The
influence of brand name is vast and wide. It is influence that decides the future course
of action for a company. Likewise the strategic brand management is very crucial for
the company. The strategies of the brand management differ at different level. So the
study of the strategic management at different level is very important for any
company.

3.2 Statement of the Problem

Strategies of brand management are different at different levels of corporate
planning like Functional level, Business Level and Corporate Levels. The ways of
plans and policies framed and executed will be different at each level. A strategic
decision made at functional level strategy regarding the brand management will be
different from the strategic decision made at business level and corporate level. So the
study of the factors that influence the strategic brand management is important. In this
level an attempt has been made to study and understand the influence of factors of
strategic brand management.

3.3 Title
“Brand Building Strategies for an IT company”

3.4 Objective of the Study

‰ To study the influence of various company strategies in brand management.
‰ To understand the influence of brand image of a company in the minds of the
potential employees,
‰ To study the importance of brand image for a company.
‰ To suggest some general brand building strategies for IT company.
‰ To understand the Indian IT industry at the macro level.

18
3.5 Scope of the Study

The study limits itself to the employees of IT companies in Bangalore. The

results of the study can be generalized for IT professionals across the industry;
however, while generalizing it should be borne in mind that exceptions are bound to
occur.

3.6 LIMITATIONS OF THE STUDY

¾ It is a one time study.

¾ The study was restricted to Bangalore city and the findings may not be
applicable to any other geographical location.
¾ Non -coverage error- because of the inadequacies in the sampling frame or
design.
¾ Field error- the respondents may have provided the responses, which differ
from what is actually true to correct.
¾ The respondents might be subjected to personal bias.

3.7 DATA COLLECTION

Primary data:
Personal interview was conducted followed by purpose specific questionnaire
designed to obtain the data from the respondents.

Secondary data:

19
 Literature available in the field of Marketing, Brand Management and IT
Industry was thoroughly studied. The sources of information are newspapers, books,
journals, magazines and websites.

Tools for data collection

Questionnaire was constructed and administered to a sample of 12 working
professionals in the IT industry.

3.8 SAMPLING DESIGN

Sampling technique:
Simple random sampling technique was adopted for selecting a sample among
working professionals.

Sample Size
A representative sample of 12 Working professionals at different levels of
management holding various jobs was selected for the study.

3.9 METHOD OF ANALYSIS

The collected data was analyzed according to the objectives of the study based
upon which suitable suggestions are made. Tabulation method with the help of Bar
graph, Pie chart and analysis is done for each data. The percentage frequency is
worked and evaluation is made based on the weightage given to the data in the
analysis process. The conclusion is made on the findings from the evaluation.

20
 Chapter 4

Review
of
Literature

21
Review of Literature

In describing the three "C"s of branding, William Arruda provides an easy-to-

use device that can help a brand manager ensure that the brand remains focused. In
addition to being able to boast these enviable benefits, strong brands have something
else in common. They all exhibit the “three C’s” of branding. The three Cs are:
clarity; consistency; and constancy.

In a research conducted by Bird, Channon and Ehrenberg (reported in Bird

and Channon 1969; Bird and Channon 1970 and Bird and Ehrenberg 1970). They
found that 'former users' were more likely to associate a brand with a positive image
attribute than those who had never tried the brand. This paper extends the findings of
their research to a different method of (1) classifying 'former users' and (2) measuring
associations with image attributes. The results replicate that found in the original
study, reinforcing the assertion that an image response is substantially influenced by
past usage. These findings make detecting any relationship between brand image and
future behavior a more difficult task, as the influence of past usage needs to be taken
into account in any analysis.

In the research report conducted by Mark Kobayashi-Hillary introduces India

and the major players in the Indian service industry. He offers a balanced view on the
trend to outsource to India, describing the reasons why a business should utilize India
as an offshore outsourcing destination and the steps needed to find and work with a
local partner. Not only does the book make a compelling economic case for
outsourcing to this region, it also discusses how to manage the entire transition
process, including the potential impact on local resources.

Leading global business intelligence and consultancy firms such as Giga,

Forrester Research and McKinsey & Co. have cited various reasons for the increase
of offshore outsourcing by MNCs to India. Outsourcing is expected to grow to at least
23 percent during 2002. India's quality and cost benefit edge is one of the major

22
draws for these organizations, analysts say. Giga predicts that, compared to other
competing countries such as China, Ireland, Israel, and the Philippines, India will
continue to dominate as the preferred off shore country.

According to a study conducted by Forrester in November, 2001, India's edge

over other competing nations in the IT outsourcing business is based on the country's
decade old experience in this area, fluency in the English language, supportive
Government policy infrastructure, and high quality offerings.

In his book Branding in Asia, Paul Temporal addresses a critical issue in

branding software services. How do you differentiate a company from others when all
it does is sell solutions, which other players are also doing? This question has been
dogging India Software Inc. for more than a dozen quarters now.

According to a Nasscom-McKinsey report, building a strong country brand

includes a distinctive and credible proposition that is consistent with the brand,
aggressive and targeted communication and consistent, aligned execution.

The India Software Inc. brand is a result of the Y2K boom, coupled with the
Indian offshore story. The brand attributes, namely cost-effectiveness and English-
speaking skilled manpower, have contributed to whatever the India brand stands for.
A conscious effort in branding software services started almost two years back, when
most outsourcers were having a tough time differentiating one Indian company from
another. As a result, Infosys, Wipro and TCS were running into each other for almost
all major bids. “Branding today only means differentiating and it has become more
crucial than ever,” says Sangeeta Singh, vice president corporate marketing, Wipro
Technologies

The above findings lead to a conclusion that branding and internal marketing
plays a major role in the success of a company. Branding involves various cross-
functional efforts of Human Resource management and Marketing Management. A

23
company has to be internally stable especially w.r.t employee’s satisfactions who are
the stakeholders in the company. By asking your employees directly why they think
your company is a great place to work, you can pinpoint the core aspects of your
employer brand that you want to publicize.

24
 Chapter 5

Industry Profile

25
 5.1

Overview of Indian
IT Industry

26
Introduction
The Indian IT sector has proved to be the country’s fastest growing segment,
even in troubled times—in the globally challenging economic environment of 2006.
The software and services industry, a major component of India’s IT sector, showed
significant momentum, higher than that of other industries in the country. India
continued to be a compelling investment destination, as leading companies either set
up shop here or beef up their existing infrastructure. Outsourcing of IT requirements
by leading global companies to Indian majors also picked up pace during 2002-03, in
line with worldwide trends.
The performance of the Indian IT sector was determined by its growth in the
following areas:
• IT software and services exports
• IT-enabled services
• The domestic IT market
• Telecom infrastructure
• Venture capital

IT software and services exports

Software and services exports continued to remain on top of the IT industry’s revenue
table. The export-driven software sector saw major long term projects come to Indian
IT leaders and Indian companies bagging a larger and larger share of the global
outsourced business. The software export sector logged in revenue of $23.6 billion
for the year to march 2006, a jump of around 33 percent, as compared to the previous
year.
The number included sales of $6.2 billion from the booming back-office
sector, which provides services such as payroll accounting, and managing voice and
data call centers. India's software services sector is likely to grow by more than 25
percent in 2006/07 on rising demand for outsourcing, an industry body said on
Thursday, but a shortage of talent and weak infrastructure remain concerns. The
National Association of Software and Service Companies (NASSCOM) said large
contracts worth a combined $100 billion were coming up for grabs over the next two

27
years, pointing to a vast and yet untapped market for Indian software companies
which have so far sealed mainly low-value deals.

Some of the key service lines for Indian players continued to be:
• Custom Application development and maintenance
• Applications outsourcing
• IT enabled services
• R&D services
Indian companies also made modest headway in segments such as packaged software
support and installation, product development and design services and embedded
software solutions.

Domestic IT market
The domestic BPO business is expected to grow at 60 per cent to clock Rs
4,200 crore during 2005-06 compared with Rs 2,640 crore in 2004-05. As much as 60
per cent of this would be call centre work. Other activities include HR and finance
and accounting operations. The domestic BPO business is expected to employ close
to 50,000 people in 2005-06, he said. In terms of revenues, the market had grown 85
per cent in 2004-05, from Rs 1,425 crore in the previous year.

Telecom infrastructure
India’s telecom infrastructure has become a priority area for the country, with
the Government focusing on making it world class. The telecom market, which is one
of the world's largest and fastest growing, has an investment potential of US$ 20-25
billion over the next five years. The telecom market turnover is expected to increase
from US$ 10 billion in 2004 to US$ 13 billion by 2007.
• International Long Distance, National Long Distance and Basic Telephone
services have been opened up for free competition
• ISPs have been granted licenses freely and are allowed to set up their own
international gateways and submarine cable landing stations.
• Internet telephony has been permitted

28
 • Revenue sharing has been introduced
• Telecom services have been corporatized.

Venture Capital
The Indian Venture Capital environment, in tune with the global economic
climate and lowered investment pace, also encountered a challenging phase. Despite
these adverse conditions, the VC disbursements in India increased marginally—from
US$ 1.1 billion during 2001-02 to US$ 1.2 billion during 2002-03.

Some of the highlights of the VC market in India are as follows:

• The number of VC firms in India is around 72, of which the top 10 account
for around two-thirds of total investments made
• The IT sector accounts for nearly 40 percent of the investments made till date
• Private equity and venture capital firms invested about $1.5 bn in 125 Indian
companies during 2005
• The 2005 Indian VC activity represented a slight decrease from 2004 when
129 companies raised $1.6 bn.

Verticals focus
The vertical segments that Indian companies are focusing on, which are likely
to bring them maximum revenues and benefits include the following:
Financial services. Financial services includes securities, banking and insurance and
is the largest user of IT solutions. According to NASSCOM, during 2005-06 this
segment accounted for the largest share of Indian software and services exports.
Telecom. The telecom sector is a large IT spender and invests substantially on IT
services. According to IDC, IT services spending by telecom services providers will
grow at around 20 percent in the medium term, while IT investments will grow at 11
percent.
Manufacturing. Even though IT investments by the manufacturing sector reached a
plateau during 2005-06 on account of the global economic downturn, it continues to
be a big investor in IT services. Manufacturing companies are focused on improving

29
competitiveness through enterprise software related to product life-cycle
management, SCM, CRM, ERP and e-business.
Healthcare. Healthcare is an emerging vertical for the Indian software and services
markets. Several Indian companies are providing solutions such as customer
management systems, maintenance of electronic medical records services, etc. for
healthcare service providers, health insurance companies and life sciences and
medical equipment firms.
Retailing. Cost reduction and increased competitiveness are expected to spur IT
spending by the retailing vertical, even in challenging times. This vertical will
therefore create a major opportunity for Indian software and services companies,
particularly for vendors supplying solutions in areas such as supply chain and
logistics management, CRM and e-business
Travel, Transportation and Logistics. The IT spend, particularly in the long term, by
the travel, transportation and logistics sector is expected to go up significantly,
particularly in Europe and Asia. Indian companies operating in the Internet based
application software and CRM domains are likely to be the major beneficiaries.
Government. Governments, especially in the developed markets such as US, Canada
and the UK are expected to increase IT spend over the next few years. IT services
spending during 2002-05 is forecast to grow at a CAGR of around 11 percent.

Service lines

Currently India has a high penetration in two IT services markets, namely, custom
application development and application outsourcing. NASSCOM estimates indicate
IT-ITES sector estimated to grow by 28%, to account for 4.8% of GDP in FY06.
Employment in software and services sector to touch 1,287,000. Software and service
exports to grow by 32%, to reach USD 23.4 billion

Indian companies are now looking at:

Consulting. Some of the large, global IT consulting firms such as Accenture, IBM
Global Services, KPMG Consulting, Cap Gemini Ernst and Young, EDS and CSC are
already present in India. Indian companies have until now been involved in

30
implementing IT solutions designed by these established consulting firms, which has
helped them build domain knowledge in verticals such as telecom, financial services
and manufacturing. This experience can be leveraged to provide IT consulting
solutions.

Package implementation and support. Implementation, customization and support

of packaged applications offers a major opportunity for Indian players as they have a
highly offshorable component. ERP and CRM applications are expected to register
high growth.

Industry structure
According to NASSCOM, the Indian industry's lobby, the country's exports
from the software, other IT services and business-process-outsourcing industries grew
by more than 25% to $12 billion last year, of which infrastructure services accounted
for just over $300m. Currently 37 Indian companies have exports of more than
Rs1billion.

100002001 2002 2003 2004 150

2005 2006
8000
rowth rate

SALES 1900.57 2603.59 3622.69 4760.89 6860 9028

100
sales

GGROETH RATE 6000

115.4035 36.99 39.14211 31.41864 44.09071 31.6035
4000 50
2000
0 0
2001 2002 2003 2004 2005 2006

SALES GGROETH RATE

Growth rate of Sales of Computer and Software industry

31
32
33
34
 In March 05, NASSCOM conducted a survey to ascertain the adoption of
international quality standards by IT software and services companies in India. An
analysis of top 300 companies in India revealed.

Quality Certification No. of Companies

Already acquired ISO 9000 or SEI and other certification 216

Companies acquired quality certification by March 2002 6

Certification expected between April-December 2002 64

Additional certification expected during 2002 70

No plans at present 22
Source:NASSCOM
SEI Quality No. of Companies as on 31st No. of Companies by 31st
Assessment May, 2002 March, 2003

SEI CMMi 3 5

SEI CMM Level 5 42 46

SEI CMM Level 4 22 38

SEI CMM Level 3 24 34

SEI CMM Level 2 3 16

PCMM Level 5 2 2

PCMM Level 4 1 2

PCMM Level 3 5 6

PCMM Level 2 4 12

Note: Some companies have multiple certifications.

Source: NASSCOM

35
 5.2

Indian ITES-BPO
Industry

36
IT Enabled services (ITES)/BPO
NASSCOM estimates indicate that during 2002-03, the IT-enabled services
segment grew by a phenomenal 65 percent. Revenues from this sector rose from
around Rs. 71 billion in 2001-02 to approximately Rs. 117 billion in 2002-03.
Compared to other competing ITES nations such as Ireland, the Philippines and
China, India drew the bulk of the global ITES/BPO business on account of its
unmatched price/performance/quality proposition.

The Indian ITES/BPO engine continued to surge forward on account of the

following reasons:
• India’s vast pool of English speaking and skilled manpower, which rates high
on qualification, capabilities, quality of work and work ethics
• India’s telecom and physical infrastructure, which is approaching parity with
other developed countries
• The strong quality orientation of Indian ITES players
• The strong cost/value proposition associated with outsourcing non-core
processes to India. Customers are stated to realize cost savings of the order of
40-60 percent by moving some processes to Indian shores
• India’s unique geographical location enables 24x7 service offering and
reduction in turn around time due to time zone difference.
• The presence of a regulatory environment that’s conducive to the growth of
the ITES market

Some of the key ITES services lines include:

Customer care
Web sales/marketing
Billing services
Database marketing
Accounting
Transaction document management
Transcription

37
 Telesales/telemarketing
Benefits administration
Tax processing
HR hiring/administration
Biotech research

The Indian ITES-BPO industry is on an evolutionary path, having gone

through three key phases. The pioneers in the Indian ITES-BPO market were MNCs
such as GE and American Express that set up captive offshore facilities to gain access
to skilled, competitively priced manpower. Today, captive centers continue to be the
preferred option for overseas companies and their number has more than doubled as
compared to third party service providers. Retention of management control and low
risks associated with captive facilities have contributed to the popularity of this
business model within the Indian ITES-BPO market. Increasingly, companies are
choosing to set up captive centers in multiple regions rather than growing in one or
two locations.

The second phase of growth of the Indian ITES-BPO market witnessed the
emergence of a number of VC backed third party vendors. In the third and current
phase, a number of established IT software services companies have ventured into the
ITES-BPO arena. The need to create an end-to-end portfolio of service offerings,
leverage existing customer relationships, attain critical mass, etc. are driving this
trend.

BPO
Business Process Outsourcing (BPO) is the investment strategy for sourcing
best practices in the business value chain. Any process can be outsourced creatively
to add capabilities rather than get rid of tasks.
BPO is a business discipline, which is of a long-term nature. Any company
can outsource routine tasks. And in doing so, they may save money and provide a
more efficient service than using in-house operations, but it will not leverage a firm's

38
capabilities in terms of customer service, innovation and change adaptation. A
company has to prioritize its process needs, build a portfolio of best practice process,
link them together, integrate them and balance what it retains in-house and what it out
sources.
The payback is huge and it has become essential since the best practices have to be
used in every process.

BPO helps build best practice processes

The BPO provider base is expanding and so is the range of processes that can be
outsourced. Over a period of time, any routine business process can be outsourced by
BPO. A BPO provider can far more effectively handle processes like payroll
processing. This will not only reduce costs but also capital investment.

BPO provides expertise on demand

If business activity goes up, the process base is available and if it goes down, there
are no layoffs. A company need not staff its processes with in-house employee and
not knowing what to do with these heavy cost processes at a time when business is
not doing well. When business volumes of activities and transactions can vary widely,
BPO, adds flexibility, adaptability and ability to scale.

BPO levels
Merely identifying best prospects & service is not enough to improve customer value.
Effective execution of the same in a manner to enhance the profitability of customer
relationships is vital. Business Process Outsourcing can be broadly split into
following levels, based on the outsourcing trends & reports.
Basic Data entry
Data processing & analysis
Departmental outsourcing (HR, Accounting, Payroll)
Customer interaction services
Business Intelligence & Knowledge services

39
 Outsourcing partners ideally provide the business, application, education and
technical consulting services needed to implement the BPO initiatives strongly into
the organization.
BPO Value proposition
Focus on core competencies
Converting fixed costs to variable
Take advantage of a proven, shared infrastructure
Manage enterprise processes efficiently
Develop profitable customer relationship & reach out to wider markets
Reduce transaction overheads
End-to-end business solutions
Entry into specialized, business intelligence & knowledge based solutions
Maximize ROI using web enabling services
Substantial bottom line benefits
Importance of Offshore outsourcing

Offshore outsourcing is not just about cost-savings. It’s about looking for the
right partners to help keep the company competitive. Outsourcing means taking away
the routine functions so you can focus on core issues & help raise bottom lines. In
offshore outsourcing proper management is the key differentiator in defining success
& failure.

Increasingly, sourcing work overseas is no longer a tactical option that can

help firms save a few dollars here and there; it is a strategic necessity for any
company that cares about its long-term competitiveness.

For most business organizations across the globe, offshore outsourcing is an

interesting option, but they are reluctant to explore this option. The major reasons
being most are not aware of the benefits of offshore outsourcing & the possibilities in
outsourcing. Occasional failures of outsourced software projects have been
discouraging people to entertain the various options that the fast changing globally

40
competitive markets have to offer. Whether it is a service or a product to sustain an
organization's competitiveness, one has to relentlessly pursue cost reduction goals
without compromising the quality of the solutions. The biggest boon outsourcing has
given to the global business community is the strength to upgrade their core business
while being at the cutting edge of technology.

There are a few logical and important guidelines that any organization has to
follow to be successful in outsourcing software to offshore businesses. India has
established itself as one of the most competitive destinations for software outsourcing
development services.

Unlike in house development or on site development, the offshore software

development has certain peculiarities associated with its process. Most of the steps
that are involved in onsite development are present in offshore development. Critical
steps have been included in the process to ensure successful completion of the
project.

Why is India a hot destination for offshore outsourcing? Amongst many other
reasons one primary attribute is the top quality software management policies ensued
during the outsourcing process. Some of the best business brains & management
gurus head top Indian companies keeping it abreast with the latest fundamentals in
offshore outsourcing management.

Some key factors that makes Indian companies an obvious choice in offshore
outsourcing are stated below.
• Leverages the best-of-breed industry practices in terms of quality standards
and project management process, to ensure total simplicity and control of the
offshore programming activities.
• Focuses on continuous efforts toward increasing efficiency and improving the
quality of our offshore software outsourcing services and delivery processes.

41
 • Incorporates an effective communication strategy and the ability to understand
your specific business needs on the basis of our technical expertise and
business aptitude.

Types of software outsourcing

The term software outsourcing has been described as a situation where in a
customer contacts a software development company for the part or complete
development of a software product or delivering a IT enabled service. The level &
type of work agreed upon differs in each case. The software outsourcing with an
external organization can be for development of complete or partial software
products, the purchase of packaged or customized software products or involving the
vendor in the full software development cycle & also contract with him for
maintenance after delivery. The different types of software outsourcing can be
broadly described as below:

1. Product Component outsourcing

In Product Component outsourcing, the developer is contracted to develop a part of
an overall system. In case of large and complex systems where the organization does
not have the capacity or required skill to develop a particular thing is outsourced.

2. Process Component outsourcing

In Process Component outsourcing the customer organization simply contracts for an
external group to perform all or part of the functions of one or more of their process
steps or components.

3. Software Acquisition
In this type, the organization outsource each and every activity associated with the
software which includes design, development, programming, testing and maintenance
.The main reason for such type of offshore software outsourcing is to focus on the
organizations core values.

42
Emerging Opportunities
Apart from the traditional markets where Indian IT software and services
players have a strong presence, it is also important to focus on emerging areas, where
the future opportunities lie. The Indian software industry needs to develop a strong
strategy for some of these segments and based on current trends, build skill sets that
will be relevant for these “on-the-anvil” markets.

According to NASSCOM, one of the emerging sectors where Indian IT

software and services companies can make a tremendous impact, is the software
products segment, which encompasses the embedded software, offshore product
development, Research and Development and shrink wrapped and enterprise products
domains

Future of Outsourcing
Outsourcing is here to stay. In a highly competitive business environment,
companies need to stick to their core competencies and go for strategic outsourcing to
reduce their costs and become more effective in their services to their customers.
Outsourcing will be looked at as an essential business skill. A companies' success in
managing their outsourcing relationship will determine its business success.

43
 5.3

India –
Destination for Offshore
Outsourcing

44
 Ten years ago, if someone asked an Indian what his people were really, really
good at doing, he would have a blank. Today, he will proudly say: Software. India
would be a world leader in a century because the industries that will define most of
this century are Information Technology, Telecommunications are areas where India
and Indians have shown a surprising amount of skill and creativity. Secondly, a major
telecommunication companies in the world today either have a software development
center or are planning to have one in India. Meanwhile India is being identified with
software in the same sense as Japan was once identified with consumer electronic
goods or Germany with engineering. The IT industries thus have given a new identity
to the country among the nation of the world, particularly among the developed
countries.

In recent times, software companies in India have shown a tremendous

maturity, by opting for higher quality levels in their processes. In fact, 10 out of 17
companies at SEI CMM lever 4, and 9 out of 18 companies worldwide at SEI CMM
level 5 are companies of Indian origin.

Credit for India’s rapid growth in the IT software services and ITES/BPO
domains must go in part to the availability of a robust infrastructure (telecom, power
and Roads) in the country. Relevant telecom facilities are an important prerequisite
for the success of the software industry and over the years, the Government has taken
steps to ensure that telecom remains a priority area.

Similarly, regular, reliable, uninterrupted power, a major necessity for running

IT software and services businesses, has also received substantial attention from the
Government. Recent steps to privatize the distribution of power and bring in greater
efficiencies and customer centricity in the market have been welcomed by the ICT
industry.

The overall roads and highways scenario in India has also witnessed major
improvements over the last few years. Most cities and fist and second tier towns are

45
connected and interlinked to each other. Major investments have gone into the
development of highways, both on the side of the central and state Governments.
Clearly, the Indian Government has understood the importance of infrastructure to
industries such as IT and created a conducive environment for its development and
expansion.

Key offshoring models

Indian offshore ITES-BPO set-ups are typically based on one of the following
models:

Captive models
* Pure captive model: An internal cost center or a 100 percent subsidiary, e.g., GE,
American Express, HSBC.
* Captive-partnership model: Strategic alliance with Indian provider for
implementation of support services such as infrastructure set-up, recruitment and
training, e.g., EDS-TCS

Strategic Alliance/Joint Venture models

* Build Operate Transfer (BOT)/Joint Venture: Provider-owned/joint operations,
which are transferable to the customer at a pre-determined time
* Inverted BOT: The Indian provider provides only implementation support to start
with and is allowed to buy in only when the center reaches certain milestones, e.g.,
WNS-BA

Outsourced model
* Pure outsourcing: Use of an India-based provider to conduct offshore business
processes, e.g., Amazon-Daksh, Aetna-Daksh
* Managed outsourcing: Full-time or part-time resources in India to facilitate
transition, relationship management, and transfer of domain knowledge to third-party
provider, e.g., Greenpoint-Progeon

46
Pricing models
Companies in the ITES-BPO industry have traditionally adopted the following
pricing models:
Per unit time variable (per seat, per hour): This is the most common pricing model
adopted by Indian ITES-BPO companies. The client guarantees a minimum amount
of business, and billing is on per seat, per employee or per hour basis. Specialized
areas are typically billed on a per hour basis, where the billing rates per hour depend
on the service provided.
Per seat (or employee) per month: The customer guarantees a certain number of
seats (or employees).
Incident or activity based: The billing is per call, per statement produced, or per line
transcribed.
Gain share-based models: Compensation is based on actual success, which is
gauged based on preset parameters. These could include actual savings, or sales lead
generated, or actual sales, etc.
In 10 or 15 years, organizations may be outsourcing all work that is "support"
rather than revenue producing, and all activities that do not offer career opportunities
into senior management. In the 1990s, outsourcing took on new strategic dimensions.
Rapidly changing market dynamics caused organizations to spend more time focusing
on their core business and global competitive pressures.

Organizations are realizing that they can't be all things to all people. As a
result, organizations are focusing more on their core competencies and relying on
service providers to manage critical but non-core processes for them.

India has effectively provided efficient software solutions to Fortune 500

companies. Citibank, Morgan Stanley, Wal-Mart, AT&T, General Electric, Reebok,
General Motors, Sony, Boeing, Coca-Cola, Pepsi, Swissair, United Airlines, Philips,
General Electric, IBM, Reebok, Lucas, British Aerospace, General Motors, and Sears
are some companies relying on software companies in India.

47
 It is not surprising that corporate giants in the United States, Europe, and
Japan are increasingly looking to India for cost-effective and high-quality software
solutions. In fact, a World Bank-funded study in the United States confirmed that
vendors rated India as their number one choice for outsourcing.

India has invested heavily in technical education and can provide a ready
supply of bright people at relatively low cost. Infrastructure improvements in India,
particularly in the area of telecommunications, and the independent nature of working
in IT make it possible to bring this talent to bear on virtually any programming task.
Traditionally, the most active location for staging these types of IT initiatives has
been India. A strong supply of high-programming talent, favorable government and
tax incentives, and the ability to complement U.S. time zones with a virtual around-
the-clock approach are some of the advantages India has to offer.

Some of the key benefits of outsourcing from India are:

• Access to leading practices: external service providers give companies
access to an extensive, highly specialized knowledge base--which
providers must improve continuously to stay in business.
• Clearer strategic focus: Allow managers to focus on core competencies
and strategic issues rather than on routine, time-consuming activities
• Better resource allocation: can help shift the traditional focus from
transactional activities and reporting to the delivery of forward-looking
information and value-added business analysis.
• Improving service quality and productivity --reduce response time,
deploy solutions faster and improve system availability.
• Improve performance--maximize the performance of an organization's
enterprise client/server computing environment through the use of the
latest technology and an outsourcer's performance management tools and
expertise
• Achieving cost effectiveness as well as cost Reductions
• Significant cost savings, up to 80% in certain cases.

48
 • While it can be quite difficult to recruit the expected competence in
Western countries, it is a completely different scenario in India, where
there are lots of available programmers with a good academic background.

NASSCOM
NASSCOM is India’s National Association of Software and Service
Companies, the premier trade body and the chamber of commerce of the IT software
and services industry in India. NASSCOM is a truly global trade body with around
850 members, of which nearly 150 are global companies from the US, UK, EU, Japan
and China. NASSCOM’s member companies are in the business of software
development, software services, and IT-enabled/BPO services.

NASSCOM was set up to facilitate business and trade in software and services
and to encourage advancement of research in software technology. It is a not-for-
profit organization, (funded entirely by its members) registered under the Societies
Act, 1896.

NASSCOM has been the strongest proponent of global free trade in India.
NASSCOM is committed to work proactively to encourage its members to adopt
world-class management practices, build and uphold highest quality standards and
become globally competitive.

NASSCOM’s Vision
NASSCOM’s vision is to establish India as the 21st century’s software
powerhouse and position the country as the global sourcing hub for software and
services.

49
NASSCOM Membership
NASSCOM welcomes as members, companies and firms that are incorporated
and/or are registered in India, which have made and will make positive contributions
to the IT software and services industry in India and globally. Member companies are
expected to comply with the association’s code of conduct. NASSCOM membership
covers members and associate members’ categories. Members are entitled to hold
office and vote at any meeting of the association. Associate members enjoy all
membership benefits, but are not entitled to vote at any meeting.

Member Services and Benefits

NASSCOM provides value-added services to its members to grow their
business and create an ecosystem which promotes growth and profitability.
These include:
• Forums for making business connections and share best practices (SME
Forum. ITES BPO Forum, Products Forum and MNC Forum)
• Participation in seminars and conferences (in India and abroad) with customer
delegations
• Access to world-class research and market intelligence services; and counsel
from leading analysts and think tanks and consultants
• Access to knowledge of global business practices (taxation, legislation,
immigration policies, recruitment and branding)
• Opportunity to “give back” to the society by participation in NASSCOM
Foundation and other digital divide initiatives
• Contribute to development of global standards and thought leadership in areas
of IP creation, security, data protection, and next-generation software quality
standards

Membership Strength
The membership of NASSCOM has been steadily increasing. In 1988,
NASSCOM had 38 members, who together contributed close to 65 percent of the
revenue of the software industry.

50
 Within a short span of fifteen years, the membership of NASSCOM has
grown multifold to touch 819 members as of 31st December 2003. These members
currently account for over 95 percent of the revenues of the software industry in
India.

Building the great Indian software brand

Indian software services companies invest a mere 1-2 percent of revenues in

branding initiatives. Ergo, India Software Inc. lacks a focused approach towards
branding and it’s high time we get moving aggressively on this front, says Pankaj
Mishra.

“Today, there is a need to communicate India’s potential to serve the entire

spectrum of IT requirements from outsourcing to consulting to markets across the
globe. Nasscom’s global communications effort will also aim to address any concerns
that the industry and governments in foreign markets may have and attract more
technology investments to India,” says Kiran Karnik, president of Nasscom.

Challenges

The biggest challenge for India Software Inc. remains a synergy between the
‘umbrella India brand’ and various players who have different attributes and
positioning. While Nasscom has to play an instrumental role in finding this synergy,
it will have to shed its ‘Big Boys club’ image in order to do so.

The recent emergence of an anti-offshoring lobby in the US also poses a threat

to the India Software Inc. brand. Nasscom has hired a PR agency in the US for
creating awareness about the benefits of offshore outsourcing. New Jersey is already
in the process of passing a law that will prevent offshore outsourcing of government

51
work to India. Reports also suggest that even the state of Washington is mulling a
similar law with broader implications.

And then there’s the China challenge, which keeps cropping up whenever one
starts talking about challenges. “China is a serious threat to India’s cost-effective
proposition in the long term, if not immediately. Promoting India as an offshore
destination, especially with the emergence of China, remains a daunting task,” says
Srinivas Uppaluri, general manager marketing, Infosys Technologies. He adds that
sustaining a conducive political environment and infrastructural issues also pose a
serious threat to the India Software Inc. brand.

Aligning smaller Tier 2 and Tier 3 players with the mainstream India brand
(promoted by Nasscom) is another big challenge towards establishing the country
brand. Their processes will have to be in line with the brand characteristics already
established by large Tier 1 players.

Tier 1 branding
Credibility and global delivery are two important attributes established by Tier
1 players over the last few years. TCS is perhaps one of the pioneers in global
offshore outsourcing and has spearheaded the Indian offshore story for at least a
decade. Then came the likes of Wipro and Infosys, who shared the pie with TCS.
Those were the good old Y2K days when the demand-supply equation favoured
Indian vendors, and credibility [of a vendor] was never high on an outsourcer’s mind.
But things have changed drastically in the post-Y2K scenario. “Outsourcers are now
looking at credibility while making a choice between vendors. The brand attributes of
India Software Inc. today are excellence in global delivery and a solution
orientation,”.

Many successful technology services brands worldwide have leveraged

mergers and acquisitions as a powerful tool to gain mind share for addressing new
markets. For instance, IBM’s acquisition of PwC Consulting has imparted Big Blue’s

52
services business an enviable consulting brand. When consulting firms like Razorfish
and Sapient were begging to be acquired, many analysts believed that some of the
large Indian companies could gain by acquiring them. However, none of them did so,
though a few approached Sapient, exploring the acquisition opportunity. “M&A gives
a different twist to branding, and it definitely is an effective branding strategy,” says
Singh of Wipro.

Tier 1 players have also started partnering with various business schools like
Wharton and Berkeley University. Infosys has an award programme with Wharton,
while Wipro’s Vivek Paul delivers lectures at various international business schools.
These industry-academia partnerships have helped Tier 1 firms build their respective
brands.

Tier 2 branding—Can NASSCOM help?

Whenever a large outsourcer looks at India, one filtering criterion is vendor size.
Recently, a Tier 2 firm based in Bangalore lost business because the outsourcer
overlooked vendors having a turnover of less than $100 million. The only way a Tier
2 or Tier 3 firm can compete effectively is through niche expertise. “Small players
have no choice but to focus on niche markets. We cannot compete on cost as we lack
scale,” admits Prashanth Prakash, CEO of NetKraft. Nasscom, according to him,
lacks an effective policy to address the smaller players, especially when it comes to
branding issues. “India Software Inc. is not only about the top firms, it should also
include players like us. Nasscom has definitely failed to address this issue so far,” he
adds.

Nasscom has to be more proactive in streamlining smaller players towards the

India Software Inc. brand. It has to help these companies identify their core
competencies. Nasscom should also encourage smaller players to interact with
established players like Wipro and Infosys. Apart from exploring sub-contracting
opportunities, this initiative would lead to a uniform brand communication for India
Software Inc.

53
Building Brand India
A strong country brand helps companies that operate in it. Over time, a strong
country brand equity also helps retain market share and command price premiums.
According to a Nasscom-McKinsey report, building a strong country brand includes a
distinctive and credible proposition that is consistent with the brand, aggressive and
targeted communication and consistent, aligned execution.

“One of the major objectives of our global communications campaign is to

communicate the business value and competitive edge that Indian IT vendors are
offering to global enterprises in a tough market environment. Nasscom has formed a
core committee within the Executive Council, which will spearhead activities in the
campaign,” says Arun Kumar, chairman of Nasscom. However, Chakravarti of
Mindtree feels that Nasscom should not act as a ‘super advertising agency’ for India
Software Inc. and suggests that Nasscom and the software services industry will be
better off by focusing more on Tier 2 firms and helping them.

Building a country brand in software has never been attempted by any nation
so far. The CII recently talked about its plans for branding India with a punchline—
Served from India. The apex body is already designing a logo and an application for a
copyright has been filed. But this has to be a combined effort, along with Nasscom
and its members, both large and small ones. This streamlined approach of the
associations is important before the campaign hits the overseas markets.

India Software Inc.’s brand message

¾ A safe destination to do business
¾ Hassle-free procedural and regulatory environment
¾ Long-term sustainable competitive advantage in people and infrastructure
¾ Preeminent destination for cross-border IT services
¾ Leading global ITES hub for high-value activities
¾ Strategic product development and R&D base
Source: McKinsey

54
India Software Inc.
Strengths
¾ Excellence in global delivery
¾ Cost-effectiveness
¾ Fortune 500 clientele
Weaknesses
¾ Lack of streamlined approach for branding India Software Inc.
¾ Geopolitical situation in the sub-continent
Opportunities
¾ Improve brand recall by investing in branding
¾ Participate in industry forums to gain better mind share
¾ Replicate software services success in ITES
Threats
¾ Anti-offshoring lobby in the US
¾ China as a strong brand for offshoring

“Served from India”

A brainchild of industry body Confederation of Indian Industry (CII), the
phrase ‘Served from India’ is being touted as an umbrella brand for Indian services,
just as the ‘Made in India’ brand is used for Indian products. CII is gearing up to
launch this brand and is currently working on its design and logo. Thrilled by its
creation, the industry body has even applied for a copyright. The brand will
encompass sectors like software, IT-enabled services, design services and
biotechnology. It will be used as an umbrella brand to promote the Indian services
sector, both within India and overseas.

55
 Chapter 5

Analysis
and
Interpretation

56
Q1. Profile of the Freshers Respondents

Aggregate % Freshers Respondents

80% &
50%-60% 60%-70% 70%-80% above

Respondents 1 12 9 3

% 4% 48% 36% 12%

Table 1

A
g
re
g
a
teP
e
rc
e

Graph 1

Interpretation: It is observed that 48% of the respondents have secured an aggregate

of 60%-70% and 36% of them have an aggregate of 70%-80%. This would infer that
nearly 86% of the respondents are average and above average students. 12% of the
respondents have aggregate of >80% who are considered as brilliants at studies.

57
Q2. Salary Expectations of the Freshers Respondents

Salary Expectations
4k-8k 8k-10k 10k-12k 12k & above
Respondents 2 1 10 12
% 8% 4% 40% 48%
Table 2

S
a
lryE
x
p
4

Graph 2

Interpretation: 48% of the respondents expect a salary of 12k and above and 40% of
the respondents expect a salary between 10k and 12k. This would infer that nearly
88% of the respondents expect a salary of more than 10k, which is exactly, or just
above the average scale for the freshers in the industry.

58
Q7. Choice of the future job (a decision of brand image Vs salary).

Choice of future job and company

Low
High Brand
Avg Brand Brand
image,
Image, Avg image,
Avg/less
salary High
salary
Salary
Respondents 9 14 2
% 36% 56% 8%
Table 3

Preferred company to work with

8%
36%

56%

High Brand image, Avg/less salary Avg Brand Image, Avg salary
Low Brand image, High Salary

Graph 3

Interpretation: It can be inferred that 36% of the respondents give more importance
to brand of the company irrespective of the salary. 56% give equal importance to
brand and salary. Only 6% of the people give importance to higher salary more than
the brand of the company.

59
Q4. Expectations of Respondents about the job

Expectation of the future job

Good company's
Good Challenging work Growth brand
Salary job culture opportunity image

Respondents 15 15 15 22 16

% 60% 60% 60% 88% 64%

Table 4

Expectations about Job

90%
80%
% of Respondents

70%
60%
50%
40%
30%
20%
10%
0%
Good w ork
Challenging
Salary

opportunity

company's
Good

Grow th
culture

brand
image
job

Graph 4
Interpretation: The above figure indicates that 60% of the respondents considers
Good salary, challenging job, good work culture. 64% of the respondents gives
importance to Brand image and 88% to growth opportunity in their job.

60
Q5. Level of importance to brand image in their decision to join a
company

Level of Importance to Brand Image

Important
Not at all Not so Very
Respondents to some Important
important important important
extent

Total 2 2 15 18 13

% 4% 4% 30% 36% 26%

Table 5

Importance of Brand Image

40%
Re s p o n d e n ts

30%
% of

20%

10%

0%
important

important
Important

Important

important
Not at all

to s ome
Not s o

ex tent

V ery

Graph 5

Interpretation: The above figure indicates that 30% of the respondents say Brand
image of the company is important to some extent in their decision to join. 36% say
important and the other 26% say it is very important. Only 8% of the respondents say
that it is not important. So on a whole, it can be concluded that 8% of the respondents
say brand image is not important, 30% of them have neutral opinion and 62% of them
say brand image is important.

61
Q8. Brand building strategies in general

Brand building strategies

Word Corporates
Newspaper Press Internet Sponsori
of participation
Advtg Releases Advtg ng events
mouth is summits
Respond
22 18 9 41 30 23
ents
% 44% 36% 18% 82% 60% 46%
Table 6

Brand building strategies

90%
80%
% of R es pondents

70%
60%
50%
40%
30%
20%
10%
0%
Newspaper Press Internet Word of Corporates Sponsoring
Advtg Releases A dvtg mouth participation events
is summits

Graph 6

Interpretation: It can be inferred that 82% of the respondents think 'word of mouth'
is the best way of building brand. 60% of the respondents that Corporates
participation in various summits also helps in building brand. 46% of the respondents
feel sponsoring various events and 44% feel Newspaper advertising will also help in
building brands.

62
Profile of the Working Professionals respondents
Table 7

Work Experience
5 yrs
1-2 3-5
Respondents <1 year and
years years
above
6 12 6 1
% 24% 48% 24% 4%

Work experience
4%
24%
24% <1 year
1-2 years
3-5 years
5 yrs and above

48%

Graph 7

Table 8
Age profile
20-24 25- 28- 33 &
Respondents
yrs 28yrs 32yrs above
10 12 2 1
% 40% 48% 8% 4%

Age
4%
8%

40% 20-24 yrs

25-28yrs
28-32yrs

48% 33 & above

Graph 8

63
Q. How did you get into to the organization you are currently
working with?

Mode of joining

Campus Friend's Newspaper

Respondents Others
recruitment reference advertising

11 5 6 3
% 44% 20% 24% 12%
Table 9

Campus
12% recruitment
Friend's reference
44%
24%
Newspaper
advertising

20% Others

Graph 9

Interpretation: It can be noticed from the above graph that 44% of the respondents
joined the company through campus recruitment. The other means like newspaper
advertisement and friend’s reference together forms 44% and only 12% of them have
joined the company through other means.

64
 Chapter 6

Summary of
Findings
And
Conclusion

65
Chi Square (χ2) Test

Null Hypothesis: Ho: Brand image is not considered as an important factor in the
decision to join a company compared to salary.
Against
Alternate Hypothesis: H1: Brand image is considered as an important factor in the
decision to join a company compared to salary.

Test Statistic
For 2∗2 contingency table of the form, a b the statistic is given as
c d

χ2 = N (ad-bc)^2
~χ2
(a+c)(a+b)(c+d)(b+d) (1)

Decision Rule
At 5% level of significance and 1 degree of freedom,
Ho is accepted when, χ2 ≤3.841

0.05

66
 Calculation

Important Not an important Total

influencer influencer
Brand image 34 16 50
Salary 22 28 50
Total 56 44 100

a=34, b=16, c=22, d=28, N=100

χ2 = N (ad-bc)^2
~χ2
(a+c)(a+b)(c+d)(b+d) (1)

= 100(34*28-16*22)^2
(56*50*50*44)

χ2 = 4.09

Finding

At 5% level of significance and 1 degree of freedom, χ2 lie in the critical region.

Hence, Ho is rejected. Thus it can be concluded that both experienced people and
freshers consider brand image as an important factor in the decision to join a
company compared to salary.

67
Conclusion
From the above findings, it can be concluded that brand image of a
company plays a major role than compared to salary in the decision of an
employee to join the company. Even though the other factors like growth
opportunity, work culture and nature of job plays an equal role, brand
image has an upper hand when compared to the salary. It can also be
concluded from the fig that ‘word of mouth’ is the easiest and the best
way of building a brand in the industry. This signifies the importance of
Employee satisfaction and Corporate Social Responsibility of a company
towards achieving word of mouth marketing.

68
 Chapter 7

Recommendations

69
Recommendations
• Articles and research papers by the employees to be published in
leading magazines.
• Participation of company leaders in various summits and meets
thereby building a rapport with others in the industry.
• Technically sound Public Relation Officer to announce frequent press
releases.
• Membership in various forums and participating in these forums’
discussions and meets.
• Sponsoring selected events related to the industry.
• Highlights of the high profile people in the company to be marketed in
all possible ways.
• Encouraging ‘word of mouth’ advertising by motivating the employees
in this regard and rewarding their efforts in an effective way.
• Advertisements of recruitment in leading newspapers on a regular
basis.
• Internet advertisements in leading websites.
• Tier 1 players have also started partnering with various business
schools like Wharton and Berkeley University. Infosys has an award
programme with Wharton, while Wipro’s Vivek Paul delivers lectures
at various international business schools. These industry-academia
partnerships have helped Tier 1 firms build their respective brands.
• Company’s brand can also be build by exhibiting Corporates Social
Responsibility by contributing part of their funds for social causes like
education, healthcare, rural development, infrastructure and
environment protection.

70
Bibliography

71
Bibliography
‰ Jagdeep Kapoor , 2001, 9th Edition, “24 Brand Mantras - Finding
a Place in the Minds and Hearts of Consumers”.
‰ Colin Bates, 2003 , “Managing Your Total Brand”.
‰ Jean & Noel Kapferer, 2001, “Strategic Brand Management”.
‰ Philip Kotler, 2000, Millennium Edition, “Marketing
Management”.
‰ http://marketing.about.com
‰ http://www.buildingbrands.com
‰ www.nasscom.org
‰ http://www.ebrandmanagement.com/
‰ www.managementfirst.com/brand.htm
‰ http://www.themanager.org/Knowledgebase/Marketing/Brandi
ng.htm
‰ Journals and Reports from IIM-B library.

72
Annexure

73
1. Questionnaire for working professionals
Hi,
I am doing my dissertation project on the topic “Branding strategies for an IT
company”, which is part of the MBA curriculum. To pursue the objective, I need your
valuable, sincere feedback to this questionnaire. I assure you that the information
collected will be used only for the academic purpose.
Thanks and Regards
Yoganand

Personal information
• Name:
• Company:
• Age: a) 20-24 b) 25-28 c) 28-32 d) 33 and above
• Designation:

1. How did you join this company?

‰ Campus recruitment
‰ Friend’s reference
‰ Newspaper advertisement
‰ Others (please specify)……………………..

2. What is your total work experience?

‰ Less than 1 year
‰ 1-2 years
‰ 3-5 years
‰ 5 years and above

3. How many organizations have you worked earlier? ………………

74
 4. Why did you join this organization?
‰ Better salary
‰ Challenging job
‰ Good work culture
‰ Growth opportunity
‰ Company’s brand image
‰ Others (please specify)………………………………………………….

5. On a scale of 1 to 5, rate the importance of brand image in your decision to

join a company.
1. Not at all important
2. Not so important
3. Important to some extent
4. Important
5. Very important

6. What are the main reasons for the above rating on brand image of a company
you want to work with?
‰ ………………………………………………………………………..
‰ ………………………………………………………………………..
‰ ………………………………………………………………………..

7. Which all among the following do you think would build the company’s
image in the minds of the people?
‰ Newspaper advertisements
‰ Press releases
‰ Internet advertising (like in jobs websites, Nasscom website…etc)
‰ Word of mouth
‰ Company Corporates’ presence in various summits
‰ Sponsoring various events
Others (please specify)…………

75
2. Questionnaire for Freshers
Hi Friend,
I am doing my dissertation project on the topic “Branding strategies for an IT
company”, which is part of the MBA curriculum. To pursue the objective, I need your
valuable, sincere feedback to this questionnaire. I assure you that the information
collected will be used only for the academic purpose.
Thanks and Regards
Yoganand
Personal information
• Name:
• College:
• Semester:
• Branch:
8. What is your aggregate % of all the previous semesters?
‰ 50%-60%
‰ 60%-70%
‰ 70%-80%
‰ 80% and above
9. What is the salary level you expect?
‰ 4k-8k
‰ 8k-10k
‰ 10k-12k
‰ 12k and above

10. Do you have any work experience? (Y/N). ………………

If Yes, how many years? ……………….

11. What are your expectations about your future job?

‰ A very good salary
‰ Challenging job
‰ Good work culture

76
 ‰ Growth opportunity
‰ Company’s brand image
‰ Others (please specify)……………………………………………
‰

12. On a scale of 1 to 5, rate the importance of brand image in your decision to

join a company.
1. Not at all important
2. Not so important
3. Important to some extent
4. Important
5. Very important
13. What are the main reasons for the above rating on brand image of a company
you want to work with?
‰ ………………………………………………………………………..
‰ ………………………………………………………………………..
‰ ………………………………………………………………………..
14. Given a choice, which company do you prefer to work with?
a) A company with very high brand image for an average/lesser salary.
b) A company with a relatively known brand image and for an average
salary.
c) An unknown company with low brand image but for a high salary.
Which one do you prefer?
15. Which among the following do you think would build the company’s image in
the minds of the people?
‰ Newspaper advertisements
‰ Press releases
‰ Internet advertising (like in jobs websites, Nasscom website…etc)
‰ Word of mouth
‰ Company Corporates’ presence in various summits
‰ Sponsoring various events
‰ Others (please specify)…………….………………………………

77
78