There is something in a name

Much has been written about brand-building but how serious a survival strategy is it for Indian software firms? Here's an update.

Vipin Kumar

WHAT is common between Vicks Vaporub, Colgate toothpaste, Amul dairy, Horlicks malt drink and Infosys Technologies? The simplest possible answer would be that all Infosians would have used these products at least once in their life! But jokes apart, Infosys, along with the others, is today regarded as one of the most powerful brands in the country.

So even as Infosys shares the honours with the others as one of the most well-known brands in India — it was valued at Rs 5,376 crore as on March 31, 2001 — an interesting element in the software major's brand-building exercise stands out: that it has never spent a single penny on advertising! Its soaring stock prices, stock options, millionaire drivers and electricians and a spartan N.R. Narayana Murthy built its brand automatically.

But then why should Infosys embark upon an exercise to value its brand? It is mainly a software export firm, targeting overseas clients.

When it comes to doing this business, the famous cost and quality advantage of the Indian software professional should stand the company in good stead. So how does it matter whether the Infosys brand is powerful or not?

Well, it wouldn't have mattered much in the past for any software company, but things have changed in the last few years — perhaps for the better or perhaps for the worse. Today, overseas clients don't look only at the price quoted by the bodies they hire to write software codes, but are keen to know where they come from. Yes, the India brand does command some premium even now, but that alone is not going to land business for any one. ``Price is no longer a deal maker. Today companies are looking at proven capabilities, expertise and the brand to outsource their work,'' says Rolf Jester, Regional Director and Chief Analyst of Gartner Dataquest (IT Services).

Jester strongly urges Indian software services companies to embark upon brand-building exercises in the US as Gartner surveys have revealed that American companies are increasingly looking for known names to outsource software rather than experimenting with new vendors. ``Many Indian companies are not established brands in the US. This is a critical factor that will separate winners and losers. Indian firms need to do a lot of brand-building,'' he says.

Agrees Sangita Singh, Head, Strategic Marketing, Wipro Technologies. ``Branding has become very important these days, even more so in the current situation. Because clients are now looking for stability (from their vendors) and they are keen on constant track records.'' So Wipro not only seeks to build its own brand name, but it is also branding different services. For instance, the company markets various services frameworks and methodologies under the `WiproWebSecure', `Channel W' and `DocSmart' brands.

Go for exclusivity

According to Gautam Kumra, Principal, McKinsey and Company, Indian software companies also need to differentiate themselves from each other. ``For an outsider, all Indian software companies look the same today, with thousands of people, SEI CMM Level 5 certifications, overseas listings... So these companies need to differentiate themselves from the others,'' Kumra says.

Phaneesh Murthy, Head of Sales and Marketing of Infosys, says this has become an issue not only between Indian companies but also between Indian and multinational firms. ``The US and Indian companies have also started to look similar now. Everybody has operations everywhere...'' Murthy says.

Surely, creating well-known brands is one of the solutions to address this issue too. So how are these people going about building their brands?

Winning combinations

Firstly, this is an uphill task for an Indian IT company, especially for small and medium-sized firms. Indian IT companies have always faltered when it comes to marketing home-grown technologies abroad and this is one reason why our industry has so far failed to deliver a globally successful software product. No doubt, India has built a reputation as a software services destination, but it remains to be seen how many of our companies would be able to build individual brands in the global arena.

``Indian companies are in a Catch 22 situation,'' says Arjun Malhotra, Chairman of TechSpan and a veteran with over two decades' experience. ``While our IT firms generally spend 15 per cent of their revenues on sales and general administration expenses, US companies shell out a much higher rate of 25 per cent. This is one reason why our companies enjoy a higher profit margin vis-a-vis US companies.''

If Indian companies also increase the sales and marketing efforts, naturally the cost will go up, affecting the profitability. However, unless they spend more on marketing to leverage on their brand, it is difficult to survive.

In order to get around this issue, various companies adopt various methods. Take Infosys for instance.

The company wants its brand to be ranked amongst the top five IT service providers in the world. The steps taken to achieve this goal: tie-ups with major media houses such as The Economist for co-branding events, partnerships with reputed academic institutions and renowned thinkers etc. Wipro uses a variety of tools such as press and industry-specific journals and the Internet to spread the brand awareness. It also has customer-relationship programmes that help build the brand through one-on-one interactions. Alliances and partnerships with industry leaders too help the company in strengthening its brand.

Small companies and start-ups take to more innovative means since they may not be able to afford such costly propositions. For instance, the Ashok Soota-promoted MindTree Consulting adopted a logo designed by a spastic child.

The company got tremendous media coverage by this step and in the process quickly became one of the most well-known start-ups in the country. Wipro's Sangita Singh says that existing clients are the best brand ambassadors as most orders come from existing customer references.

Technology is another differentiator. ``Value addition is the distinguishing aspect today in branding,'' says Phaneesh Murthy. Sangita Singh too feels that the quality of services is what separates the boys from the men. ``In today's business environment, it is critical for Wipro Technologies to differentiate itself with a `clutter-breaking' value proposition,'' she adds.

However, most of these efforts have so far been targeted at the US market, and it is only now that companies have started to create their brand awareness in other places such as Europe and Japan. `

`When I talked to some leading corporations in Europe, I found that none of them had heard about any major Indian software company,'' says Suresh Rajpal, the ex-HP India head, who has now started Tecnova Information Systems.

``For us, targeting the European market, this was the best news,'' Rajpal says. That many of these markets do not understand English makes brand-building efforts all the more difficult.

And when our companies establish their brands in these countries, it will be another story worth writing about.

vipin@thehindu.co.in