BEAT AND THE REST

The Indian software and services industry has come a long way from being low cost solutions provider to being a preferred hub for outsourcing for global corporations. The industry has around 3032 players generating total revenues of $15.9 Billion in 2004.

However, on closer examination it is revealed that of these estimated 3032 IT and ITeS companies in India the top 20 accounts for combined revenues of $5.77billon or a whooping 36.3% of the entire pie. Further only .43% of the players in the industry have revenues in excess of $100Million. It was in the context of this enormous disparity that Prayag decided to anchor a study into the marketing practices prevalent amongst the players in the Indian IT and ITeS industry.

Structure of the Indian IT Industry
Annual revenues	Number of Companies
< $10M	2888
$10M - $100M	131
$100M - $500M	9
$500M+	4

In today's scenario marketing has become an inseparable part of any organization's growth strategy and irrespective of size, marketing activities should be accorded a high priority in any company's growth strategy. We have tried to study the marketing practices of companies across the breadth of the IT and ITeS industry with a view to compare and contrast these practices, to discover the trends in marketing emerging upon the industry as well as to examine as to how well the marketing practices of Indian companies compare with global technology marketing practices

Survey respondent's statistics

Respondents by Category

Respondents by Relative Size

Great care was exercised so as to make the sample appear as representative of the industry profile as possible. A total of 52 companies ranging across the breadth of the IT and ITeS industry with a global delivery model were included in the study and the respondent group comprised CMOs, VPs (Marketing) and CEOs of these companies. A primary survey was employed to obtain empirical data on the current state of the marketing function of the respondents. Data collection was pursued using a structured questionnaire. The data collected ranged from operational aspects like the size of Marketing teams, Marketing expenditures and Technologies used to aid marketing practices to the thrust areas in marketing identified for the year ahead.

The objectives of the research were threefold. First, it sought understand of the degree of conformity between the current focus areas of marketing as against the desired focus areas. Second, it evaluates the prioritization of the various marketing programs by the respondents. Last, it also tried to gain an insight into the thrust areas with respect to the marketing practices planned for the year ahead by the respondent group.

The results of the study revealed that the Indian IT industry in general has not fully fathomed the importance of the marketing activity in stimulating growth. Not surprisingly, marketing is not an evolved function as far as the Indian IT and ITeS industry is concerned. Again, there is no real alignment between marketing activities pursued and the business goals pursued.

Marketing is mostly viewed as being ancillary to sales support and is heavily skewed toward operational activities. The thrust of the marketing activity is also directed toward customer acquisition with minimal efforts made in terms of customer retention. Also, in very few instances have proper marketing metrics been installed to help the management gauge the effectiveness of the marketing programs.

It was found that as many as two third of the companies outsourced their marketing activities and that offshore played a significant role in the execution of the marketing programs for most of the respondents.

While marketing expenditures as a percentage of the revenue generated confirm to international standards (average around 2%) they remain woefully inadequate given that in absolute terms the size of companies in India is an order of magnitude lower. Finally on examination of the technologies in place to assist marketing programs it was found that the high technology Indian vendors have failed to leverage technology to the fullest extent to assist their own marketing initiatives.

For a full presentation on the results, get in touch with Jayanthi.badrinath@prayag.com