At Bangalore’s Leela hotel, business visitors from Fortune 1000 companies—the city gets its fair share of these—are welcomed with a bottle of bubbly, caviar and a note gently prompting them to get in touch with the financier of the largesse they have just received.
The gifts, it emerges, aren’t from the hotel, but from Wipro Ltd, a company whose rainbow-hued sunflower logo is slowly but surely becoming part of Bangalore’s visual topography—it can be seen atop buildings, in parks the company helps maintain, even on the shirts and T-shirts its around 30,000 employees in the city wear voluntarily, at work and at other times.
India’s software firms are not heavy advertisers in media such as print and television. That’s because of the $39.6 billion (around Rs1.6 trillion) revenue the industry generated in 2006-07, $31.4 billion came from markets outside India. The companies themselves like to refer to their marketing efforts as B2B—they are businesses (the first B) selling to other businesses (the second B). Although the companies are large by Indian standards, they are small compared to their multinational rivals. The largest Indian software firm, Tata Consultancy Services Ltd, ended 2006-07 with $4.3 billion in revenue. IBM Corp. ended 2006 with $91.4 billion in revenue and Accenture Inc., with $16.65 billion. Unlike these two multinationals, which advertise heavily in print and television, the Indian firms have traditionally chosen to play things quiet.
But things are changing now: the marketing initiatives of Wipro, more than 80% owned by chairman Azim Premji and his family, have usually been as understated as the man himself. But the company is unlikely to have tried the champagne and caviar route a few years ago.
The marketing transformation of the HCL group, which includes hardware firm HCL Infosystems Ltd and software firm HCL Technologies Ltd, has been far more noticeable and in-your-face. Since 2005, it has run ads in print and television. The company’s latest television ad shows a young techie taking a lift from a none-too-bright investment banker and showcasing the group’s all-round IT skills in the course of a journey to the middle of nowhere, where a chopper is waiting to ferry the former to a training session.
There will be more such marketing and advertising efforts from other Indian software firms, says Harish Bijoor who runs an eponymous marketing consultancy. He claims that the companies realized the need for strategic advertising three years ago. They need this “to emerge true-blue multinationals and build premia by creating an image that is larger than life”, he adds.
The growing domestic market is another reason why Indian software firms have started looking at mainstream advertising in India. According to industry lobby Nasscom (National Association of Software and Service Companies), the Indian market for software services was worth $8.2 billion in 2006-07 and will grow to around $11 billion in 2007-08. Much of the companies’ marketing efforts are also targeted at building a recruitment brand. Last year, for instance, Wipro hired 15,152 people, Infosys Technologies Ltd, 20,010, and TCS, 24,116. All three companies receive a lot of résumés, more than they need, but a good recruitment brand can help them attract the kind of talent they want.
The Indian software industry and the CEOs and other key executives of some of its larger companies are very well known, despite the companies themselves not promoting either themselves or their execs. Much of this has to with the fact that the industry is a media darling: It earns money in dollars, hires tens of thousands of young people; was among the earliest Indian industries to become globally competitive; and became a symbol of resurgent India long before the country did enough to merit the use of that adjective.
According to a study done by Cirrus Media Research Pvt. Ltd, a Delhi-based firm that tracks the extent and quality of media coverage, and business magazine Business Today, in 2006, the IT industry ranked number one in terms of coverage.
The quality of exposure score, which measures the quality of coverage (a score of 100 means the company received largely neutral coverage; less than 100 means that it received largely negative coverage; and more than 100 means it received largely positive coverage), of the industry was 139, signifying largely positive coverage. And three executives from the industry, including Infosys’ N.R. Narayana Murthy and Nandan M. Nilekani who shared the number one spot, and Wipro’s Aziz Premji at number six, featured among the top 10 Indian executives and businessmen in terms of media coverage.
“If you see the IT industry over the last few years, a big chunk of the coverage has been driven by personalities. If TCS and HCL don’t get as much coverage, then probably the biggest reason for it will be that they don’t have Narayana Murthy or Premji on their side,” says Sourav De, head, Cirrus.
While he says that there is no denying that Infosys is way ahead in terms of corporate image, “it’s time the company measures whether its key messages are getting delivered to their target audience. There are too many passing references to Infosys and Wipro, and that dilutes the overall quality of exposure,” adds De.
In another study of second year B-school students by marketing and public relations firm Brand.comm, carried out in 2006, Infosys’ chief mentor and co-founder N.R.Narayana Murthy was the most admired business leader holding the top spot in a ranking of role models. He has occupied that position for the last five years.
That helps, but as Saurav Adhikari, corporate vice-president, strategy, at HCL—its chairman Shiv Nadar is another IT personality who is very well known—says, “Corporate branding is far more challenging.” In HCL’s case, adds Adhikari, the advertising “reflects the larger transformation within HCL itself”. Over the next 12 months, he says, the company will spend Rs12 crore on branding.
Every stage of the company’s ongoing communications effort has an objective, according to Adhikari: The group’s “fearless” campaign in 2005 spoke of size (the fact that the group had more than $2 billion in revenues) and passion; another one used the numbers 1 and 0, which constitute the binary alphabet, to explain what the company did across businesses such as banking, aerospace and life sciences; and the latest, the one with the investment banker and the young techie, focuses on youth and strives to make “an emotional connect”.
The next stage, says Adhikari, is about going global. In the next quarter, according to him, the company will launch a campaign in the US, but through direct mailers, the Internet, and forums, because “mass media in the US is very expensive”.
Mass or niche?
HCL’s approach to branding and advertising reflects the emerging trend in the Indian IT industry. Mumbai-headquartered TCS is a convert to this approach. In October 2005, the company hired New York-based brand consultancy Siegel & Gale for a brand overhaul.
“In 2000, (we said that) we wanted to be among the global top 10 by 2010, but we have already reached there in terms of profits and market capitalization,” says Phiroz Vandrevala, executive VP, TCS. In the next three-four years, we would like to be in the top three or five, he adds, “and to get there, we need a strong focus on branding”.
IBM and Accenture (the latter has Tiger Woods as a brand ambassador) occupy the top two positions in branding in the industry, says Vandrevala. “TCS definitely wants to be in third place,” he adds.
In April, the company launched a $10 million print ad campaign aimed at prospective employees and customers. An eighth of this amount will be spent in the domestic market itself. Response to this campaign will determine the company’s next step, says Vandrevala, and TCS could look at advertising in regional languages, outdoor advertising, TV and online advertising. “We could even look at a brand ambassador,” he adds.
Wipro and Infosys aren’t looking at large-scale mainstream efforts at branding and advertising. Wipro launched its branding efforts this year with a campaign titled “Applied Innovation—From Ideas to Business Results” at Davos in January. In May, the campaign with the tag line “Applying Thought” was unveiled for its clients and was seen at Austin, Texas, in the US and at a few select places in Bangalore, Pune and Mumbai in banners and billboards. The company plans to get into online advertising and will launch its online ad initiatives next month.
Both efforts were targeted at clients and customers.
That’s the key target audience for the company’s advertising, says Jessie Paul, chief marketing officer, Wipro, and “personal relations are far more credible than an advertisement because people love a track record and client references and mass media may not be the best way to do that”.
Infosys, too, believes more in old-fashioned word of mouth publicity than mass advertising. “Advertising is a one-way communication and can be useful when you have to reach out to millions of people you don’t know,” says Aditya Nath Jha, assistant vice-president and head, branding, Infosys. It isn’t that the company doesn’t realize the importance of branding, he adds. “A 40% year-on-year growth (like we are seeing) will not come without a strong brand,” says Jha.
In their own way, however, the two companies are taking cognizance of the need to go mass-market. Infosys plans to hire a marketing services firm that can take care of all its communication needs that are currently handled in-house, because “scaling up becomes an issue as the canvas becomes larger”, according to Jha. And Wipro’s Paul says the company runs mainstream campaigns focused on specific regions, works on multimedia visibility during industry events, and does focused online advertising.
But the champagne and caviar might be just as effective.