Currently, investments in branding initiatives are less than one per cent of their revenue budgets.
Sudin Apte, senior analyst and country head, Forrester Research, says that the importance being given to branding is encouraging as these firms were till now busy with such mundane matters as sales support and brochures, or simply on changing the logo and other cosmetic issues.
"In general, we'd say budgets have doubled over the past two to three years. Infosys, Wipro, and TCS are 2-3 years ahead of the other India-based IT services companies in spending. But again a lot of it comprises marketing and sales support," said Julie Schwartz, senior VP, research and thought leadership at IT Services Marketing Association, a membership community for marketing executives.
"There is a myopic view about marketing. We believe firms need basic, fundamental marketing like segmenting, tagging, articulating the message and differentiation, specialisation and a clear account strategy. Visibility and change in recall (or image) is the key. But that issue is more important for top firms. For the rest, basic marketing is what's needed," explains Apte.
Beaten hands down
TCS, the $4 billion IT major, launched its global branding campaign 'Experience Certainty' a few months ago. In the first phase it focused on the print media, spending close to $10 million.
Pheroz Vandrewala, executive VP and head of global corporate affairs at TCS, says, "We have seen that though we have proved our processes and delivery model, the top two companies (IBM and Accenture) beat us hands down in brand recall and visibility."
The company will decide on further investments based on the result of the campaign so far. "We feel there is a scope for the third spot in terms of brand image and we clearly want TCS to be there," Vandrewala says.
Playing the game
Mumbai-based Patni Computer Systems has also increased marketing spend by nearly 1.5 per cent.
Deepak Khosla, senior vice-president, Patni, who joined the company five years ago precisely to set the marketing and branding strategy in order, feels that the role of marketing is still not clearly defined.
"However, over a period of time I have seen that the marketing teams are becoming a crucial part of the business process. This is true for Patni as well. Of course, things like logo, relationship with analysts and others is also very important in the international market," he said.
ITSMA senses that more experienced outsourcing companies, especially in India, now have greater aspirations.
Schwartz says, "It's all about revenue growth, margin and profitability. When the outsourcers look over the fence and see the types of margins that Accenture, IBM Global Services, EDS, and CSC pull in, they wonder how they can play that game. They realise that they need to communicate different value propositions to their customer base."
Standing out
Wipro launched its "Applied Innovation Campaign" this January. The company has increased spending on marketing and branding by 70 per cent over the past year.
"Earlier, we based our marketing on influences and guidance from advisory firms like McKinsey or Gartner, or we banked on past record. Now, branding has become important, as only the top five global IT companies will be recognised,'' explains Jessie Paul, chief marketing officer, Wipro Technologies. "We want to showcase our uniqueness and be known as a global company."
Infosys spent Rs 70 crore last year on its brand building exercise. The company underlines that it focuses on earning the respect of all its stakeholders.
Aditya Nath Jha, associate VP & head branding, Infosys Technologies, says, "The brand value as a percentage of market cap was 27.4 per cent for 2006-07. It is about doing the unusual thing, about staking a position in the market place, or in the minds of the employee, and then reinforcing that image. The branding exercise has been and will continue to be a priority for Infosys."
Analysts hope that this is just the start and that companies will focus on differentiation rather than getting into the herd mindset.