Exhibitions and Business Events Blog

Outsourcing transactional and technical work to other countries has become a common practice in the hi tech world. Entities that provide these services are known as business process outsourcing firms (BPOs). Also those that rely heavily upon broadband Internet resources are continually referred to as information technology enabled (ITES) or BPO-ITES. Five major global BPO sectors are information technology (43%), financial services (17%), telecommunications (16%), consumer goods and services (15%) and manufacturing (9%).

India is the absolute leader in providing outsourced, offshore services, with about 63 percent share. Plenty of BPO companies have been employed by well known US internationals. Some of them include Accenture, AOL, Association, Cisco, Citibank, Dell, Delta Airlines, GE, Hewlett Packard, IBM, Motorola and Yahoo.

India relies heavily upon a plentiful, well trained, English speaking workforce, which mostly includes college graduated engineers, for the critical mass essential to make the industry a success that it is. The country enjoys good infrastructure and a healthy telecom industry; with observance to international standards for quality, security, training and the protection of intellectual property; with a tax-friendly environment and reasonably low labour costs despite the fact that, the gap in labour costs is closing.

A lot of this can be attributed to the government’s backing and encouragement. Over 4, 00,000 Indians offer outsourcing services, mainly in finance, human resources and customer care services. Of these, some include the call centers and technical support, medical transcriptions, data processing, billing and management support. Other surfacing areas of interest are also pharmaceuticals and legal services. With the change in the 1990s from government’s domination to privatization, India capitalized outsourcing and the industry has since then reached great heights. During the 1990s multinationals created wholly owned subsidiary in India to provide some of their back office and customer support services. These service providers have eventually taken advantage of the economies by providing services to multiple customers.

Outsourcing work is often exercised in combination with a service level management (SLA) that is included into the outsourcing contract. SLA’s function is to measure the work performed and the result may determine the price paid by the outsourcer.

Financial Protection for BPOs in India

Bangalore in Karnataka state is the hub for all U.S software companies in India. This city has a skilled workforce and a well-developed telecommunications infrastructure, while a city like Hyderabad is the centre for U. S companies which are engaged in life sciences. New outsource centers are increasing in many other locales in India where labor costs are lesser than in the established metropolitan centers, especially for senior employees. Cities gaining a considerable U.S business include Pune, Chennai, New Delhi and Mumbai.

A few firms also specialize in knowledge process outsourcing (KPO) or legal process outsourcing (LPO). Knowledge transfers frequently involve core business processes and intellectual property, and hence represent a higher level of risk for the outsourcing company. In India, there are two legal routes, statutory protection and written party-to-party agreements. Both methods are used for copyright, patent and trade mark protection. For the protection of trade secrets, companies rely on agreements. Even as copyright protection is available in India for software, patent protection is not so assured.

Outsourcing Practices:

The BPO industry is a fast growing industry. New services such as biotech research, tele-radiological services, design and engineering, and tax processing, are being created. They can create a local subsidiary or buy needed services directly from a local service provider. There are joint ventures and BOTs (build, operate and transfer) that begins as an outsourcing company body, advance as independents or are relocated or sold to local businesses. BPO transitions usually involve some form of performance testing during the changing stage, a process sometimes called “base-lining.”

There are compelling reasons for outsourcing, not the least of which is the cost of skilled and unskilled labor and economies of scale. The BPO industry prospered in its early years due to the considerable difference in labor costs flanked by first world and third world countries. That gap has narrowed in the past couple of years. The direct costs of labor, however, represent only part of the total cost of outsourcing. The gap in salaries and benefits is offset to some degree by added enterprise costs, such as management, employee training, communications, control, efficiency, security, preservation of intellectual property rights, and transportation.

A major cost aspect that employers are having complexity with resolving is employee turnover. The annual turnover rate among employees of business process (BPO) centers in India has reached epidemic levels, averaging 40 percent in latest years. There is not only a direct cost associated with employing and training, but also the costs of productivity and efficiency associated with learning curves and the cost of errors, which can lead to lost business.

India, emerging as an ideal export destination, driven by its cheap, yet quality goods.

Believe it or not, but a movie has helped rekindle the dashed hoped of Indian exporters. And the film in question is none other than Oscar winning movie, Slumdog Millionaire. There were reports doing rounds that this movie has helped India reclaim its lost glory, in the field of apparel and jewellery exports. In fact, according to a popular e-commerce site, the movie has bolstered demand for Indian goods significantly.

This does not mean that Indian exports are heading back towards the heady days of 2006-08. However, one cannot deny the fact that people world over, slowly, but steadily are graduating towards Indian goods. India, known as a Mecca of Manufacturing, is growing into a hub for exporters, dealing in assortment of goods. Many of the products have made in roads in countries such as United States and in many places, across Europe.

In fact, backed by cheap labour force, and an array of goods, many small and large retail businesses across the globe, are eyeing Indian goods, to cater to their domestic requirements. As a result, ‘Made-in-india’ labeled goods have a huge fan following all across the globe, so much so that even China has been selling its goods under the Indian banner.

Small and Large Retail Businesses: If you are running a retail organization and are looking for products to sell, Indian exporters literally have thousands of items on offer. Indian exporters deal in different kinds of goods, from baby products, furniture, toys, hand tools etc. When a foreign company is on a look out for cheaper goods, they obviously fall on Indian Exporters.

Purchasing Products on a cheaper rate: Another reason why exporters from India are more popular than their foreign counterparts is because the products manufactured in India are particularly cheaper. Say, for instance, retailers of United States prefer to purchase goods from Indian Exporters simply because they can increase their profit margin, by selling it at an increased rate to their customers. And moreover, the Indian products are no less in quality as compared to the wholesalers located right in their home country.

Exporting products from India profit customers as well. As retailers purchase goods at an affordable rate, they pass on the benefits to the customers as well. So it is a win-win situation for everyone: the consumer benefits, the retailer benefits and even the exporters benefits in the process.

Though some are skeptical about exporting from India, but plenty of businesses, individuals, and people are rather positive about trading with India, as they have found that transactions go smoothly and the products are of good quality as well.

All said and done, Indian exporters have captured a larger share of the international markets. America has the largest number of retailers and business owners carrying out business transactions with exporters in India on regular basis. Even other countries have put their best foot forward, by establishing trade relations with India.

<!– /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:""; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Times New Roman"; mso-fareast-font-family:"Times New Roman";} a:link, span.MsoHyperlink {color:blue; text-decoration:underline; text-underline:single;} a:visited, span.MsoHyperlinkFollowed {color:purple; text-decoration:underline; text-underline:single;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} –>

India, emerging as an ideal export destination, driven by its cheap, yet quality goods.

Believe it or not, but a movie has helped rekindle the dashed hoped of Indian exporters. And the film in question is none other than Oscar winning movie, Slumdog Millionaire. There were reports doing rounds that this movie has helped India reclaim its lost glory, in the field of apparel and jewellery exports. In fact, according to a popular e-commerce site, the movie has bolstered demand for Indian goods significantly.

This does not mean that Indian exports are heading back towards the heady days of 2006-08. However, one cannot deny the fact that people world over, slowly, but steadily are graduating towards Indian goods. India, known as a Mecca of Manufacturing, is growing into a hub for exporters, dealing in assortment of goods. Many of the products have made in roads in countries such as United States and in many places, across Europe.

In fact, backed by cheap labour force, and an array of goods, many small and large retail businesses across the globe, are eyeing Indian goods, to cater to their domestic requirements. As a result, ‘Made-in-india’ labeled goods have a huge fan following all across the globe, so much so that even China has been selling its goods under the Indian banner.

Small and Large Retail Businesses: If you are running a retail organization and are looking for products to sell, Indian exporters literally have thousands of items on offer. Indian exporters deal in different kinds of goods, from baby products, furniture, toys, hand tools etc. When a foreign company is on a look out for cheaper goods, they obviously fall on Indian Exporters.

Purchasing Products on a cheaper rate: Another reason why exporters from India are more popular than their foreign counterparts is because the products manufactured in India are particularly cheaper. Say, for instance, retailers of United States prefer to purchase goods from Indian Exporters simply because they can increase their profit margin, by selling it at an increased rate to their customers. And moreover, the Indian products are no less in quality as compared to the wholesalers located right in their home country.

Exporting products from India profit customers as well. As retailers purchase goods at an affordable rate, they pass on the benefits to the customers as well. So it is a win-win situation for everyone: the consumer benefits, the retailer benefits and even the exporters benefits in the process.

Though some are skeptical about exporting from India, but plenty of businesses, individuals, and people are rather positive about trading with India, as they have found that transactions go smoothly and the products are of good quality as well.

All said and done, Indian exporters have captured a larger share of the international markets. America has the largest number of retailers and business owners carrying out business transactions with exporters in India on regular basis. Even other countries have put their best foot forward, by establishing trade relations with India.

B2B Buyers make long term purchases 

Though consumers indulge in long term purchases, like purchase of houses or cars, such purchases seldom happen. However, long-term purchases are a common feature in Business-To-Business Markets, where capital machinery, components are purchased for a longer duration.

Further, such products and services necessitate service back-up from the supplier as opposed to the consumer markets. Say, for instance, a computer network, new machinery, a photocopier or a fleet of vehicles, call for far more extensive after sales services than a house, or a single vehicle purchased by a consumer. Moreover, repeat purchases in case of machine parts, office consumables, will call for ongoing expertise and services, like delivery, implementation/installation advice, etc, services which a common consumer is less likely to demand.

The Role of a Business-to-Business Marketer

A B2B marketer has to keep in mind two important points here: First, the importance of relationship-building in business-to-business markets, especially with key customers and second to nurture technically focused sales team.

B2B Markets are more innovation driven than Consumer markets

Consumer markets are largely driven by innovation, vis-à-vis consumer markets. B2B companies that switch on to an innovation mode are generally done to counter an innovation that has taken place in a competitive company. B2C businesses generally have low-risk, as they behave according to the whims and fancies of the consumers as opposed to the calculated behaviour of various businesses.

However, this does not mean, that B2B marketers are bad innovators as compared to those in the consumer markets. Sometimes the opposite could be true, as innovation in a B2B world is carefully planned, implemented and eventually commercialized. Audiences in a B2B world are more defined and trends can be easily traced as opposed to consumer markets.

The Role of a Business to Business Marketer

Business to business markets has both time and indicative data from upstream, this helps them analyze various options before arriving at a decision. As competitors are at power with you, it becomes absolutely imperative to gather good quality intelligence. B2B marketers are suggested to take on detailed market research and then blend it with the upstream information in order to come up with complete market intelligence picture.

Consumer Markets rely on packaging to gain maximum leverage

There has been an unprecedented growth in the packaging of consumer goods in recent years, as packaging today is not simply reduced to preserving and protecting the goods, today it has evolved into a vehicle through which aspirations and desires get transpired to the customer. Consumers being less logical than business-to-business buyers, this strategy has proved quite successful in the consumer markets.

However, the same strategy can’t be applied in a B2B market, where product is valued primarily on technical parameters. More importantly, the offers are build on relationships, and not on dreams and aspirations.

Business –to-Business marketers

In Business-to-Business markets there is more emphasis on clear packaging. Resources are far better allocated to developing relationships and expertise.

Sub-brands make little sense in B2B markets

Building of a brand is never given too much preference in the B2B world. However, in this day and age, it is becoming increasingly important for each and every product to establish its own identity, so a sudden shift in approach- towards brand building- is been witnessed in the B2B world. In fact, in the past few years, the role of brand building has increased in the B2B world. In a B2B world, branding just influences 5% of the buying decisions, while in a consumer market 30% to 40% of the buying decisions is influenced by branding.

It has been frequently observed that B2B companies have a laid-back approach in terms of developing and implementing branding strategies as opposed to B2C companies. B2B companies are generally bad at recognizing branding strategies that is supposed to cover every aspect of the business.

In their eagerness to gain advantage of branding, many B2B companies have gone over board and have come up with large number of sub-brands, targeting every aspect of the product range. However, this approach is apt for consumer markets, where the marketer has to attract buyers of different segments and sub-segments of numerous target audiences. In business-to-business markets, target audiences are quite smaller and as explained earlier; more importance is given to relationships than branding. More importantly, B2B markets have more defined and well-informed buyers, so launching brands and sub brands are considered to be pointless in a B2B world.

The Role of a Business to Business Marketer

Here b2b marketer has to make sure that branding strategies are thoroughly researched and carefully executed. Branding strategy should act as a channel for transmitting company values and philosophy. Moreover, business-to-business marketers should acknowledge the fact that ‘less is more’ when we speak of branding in the B2B world. In other words, it is better have a single brand, where customers, stakeholders and employees can relate to, rather than having a set of sub-brands which eventually proves to be an obstacle to the marketer.

Conclusion: B2B buyers are tougher to deal with

Business-to-Business buyers’ jobs are said to be more challenging, because they are accountable of the purchases made to the companies concerned. As a result, they focus on the essentials, like the quality of the product. They don’t mind shelling out a little more, in an attempt to acquire the best of the products. Their experienced eye can instantly make out a bad product from the good. Business–to-Business Marketer B2B marketer’s job is to ensure that his products, services and intangibles meet and exceed customer requirements. Business-to-business buyers are more predictable than consumer counterparts. So this ultimately means that good quality market intelligence and attention to target market’s needs will help a b2b marketer better meet the market requirements.

Small number of Buying Units in B2B markets 

Pareto Principle or 80:20 principle rules almost all business-to-business markets. To put it more precisely, small number of customers rule the sales ledger. Even some of the largest business-to-business companies may just have 100 or few customers that may make huge a difference to sales.

The major difference between a consumer market and a B2B market is of scale. In consumer markets, there is a limit to a single persons purchase. No doubt, there will be heavy users of all consumer products, but in the consumer market there won’t much difference between heavy users or light users when compared to the scale of difference in business-to-business markets. The amount spend by the largest and the smallest buyer in a business-to-business world is likely to be much, much more as opposed to the amount spend by the largest and smallest buyers in the consumer markets.

The Role of a Business to Business Marketer

Since small number of customers rules the lives of businesses, database management has become a crucial component of business-to-business marketing. Customer relationship management systems help in updating databases. It includes personal details of members of the DMU along with each and every transactional and contract record.

Moreover, business-to-business marketer should be skilled at key account management. Key account management calls for prompt delivery of services and products in the given time period, buyers also look forward to services such as rapid problem resolution and technical advice. Further, key business-to-business accounts, today, are looking beyond the delivery of effective products and services at good prices, now they are aiming at partnerships. Today, they are looking for suppliers, who can bring value-additions to the table. Say, for instance, stock goods on their behalf, offer technical consultancy, calculate product efficiency and even provide long-term on-site support.

And since there are selected few buying units in business-to-business markets, it presents both an opportunity and an expectation to the B2B marketer. The marketer at his end should ensure that biggest buyers are provided with best value-added services. Remember, if you don’t satisfy his requirements, someone else will be willing to.

Fewer behavioural and needs-based segments comprise B2B Markets

A study of over 2000 business-to-business studies reveals that B2B markets have smaller number of needs-based segment than consumer markets, whereas an FMCG market boasts of not less than 10 or 12 segments. The average business-to-business market by and large has 3 or 4 segments.

Probably, a smaller target audience makes it convenient to have smaller number of segments in business-to-business markets. In consumer market, there are thousands of potential customers, so it is considered practical and economical to divide the market into 10 to 12 segments, though several segments may get separated by small variations or need.

The primary reason for smaller number of segments dominating the B2B markets is that business audience’s behavior and needs are comparatively lesser than that of a consumer audience. Whims, insecurities and indulgences are far less likely to affect the decisions of a B2B buyer, since the purchase is for place and not for oneself or for a personal family member. And since, numerous colleagues are involved in the decision making process, it will help sort out out the unwarranted behaviour.

Need-based segments in a b2b market often comprises the following

Price-focused segment – Often small companies fall in this segment. Companies work for low profits and consider the product/service of low strategic importance.

Quality and brand focused segment- This segment seeks the best possible product and don’t mind paying for it. Medium-sized and large companies seeking high margins fall under this segment, and consider product/service of high-strategic importance.

Service-focused segment- Both product quality and range is important for the buyer and even after sale services and delivery rank prominently in their must-have list. Both big and small industries fall under this category and are specially into bulk purchasing.

Partnership-focuses segment – Here the buyer regards the supplier as the strategic partner. Such companies work on comparatively high margins and consider the product/service of strategic importance.

The Role of a Business to Business marketer

Since business-to-business market is confined to a few segments, makes the role of a b2b marketer much easier. Nonetheless, the marketer has to put in some efforts to find which customers fit in which segment, and moreover he has to come up with innovative strategies to attract each of these segments Major challenges encountered by a b2b marketer while ascertaining behavioral or need based segmentation are as follows.

To arrive at a consensus on what segments to serve, and to familiarize oneself with the special features of this segment, this usually calls for investment in quantitative market research.

Once the segmentation has been achieved, there is a need to identify other segments like country and the industry sector. Behavioural and need-based segments usually bypasses ‘firmographic segments’ like country and industry sector.

Orienting sales team, marketing teams, customer relationship and various other departments, so as to get them acquainted with the segments. This calls for huge effort and investment, horizontally and vertically within the organization.

Given the limited size of b2b target audience, B2B marketers, more often than not split the target audience geography wise, with all the key accounts receiving the much-desired attention.

Personal Relationships are crucial in B2B markets

Business-to-Business Markets rides on personal relationships. Small number of customers that buys by and large from the same supplier is easy to talk to. Sales and technical representatives show excitement in meeting such buyers. People refer each other by their first-names. Personal relationships and confidence level reaches newer heights. Now days, it is a commonplace for a business-to-business supplier to have customers who have been loyal and committed for years.

The significance of personal relationships is particularly predominant in emerging markets like China and Russia, where the concept of branding is still at its budding stages. Here the customer completely trusts the salesperson in terms of the quality of the products.

The Role of a Business-to-Business marketer

Stress on developing relationships, helps cultivate faithful buyers, thereby making it easier for a b2b marketer to focus more on the sales and technical side, rather than devoting too much of time on promotional activities. Advertising budgets for B2B marketers are usually fixed in thousands of pounds and not in millions. Unlike a consumer salesperson, a B2B marketer focuses more on cultivating a limited number of relationships than be quantity driven as in the case of consumer markets. Here, stress is more on face-to-face contact, and the salesperson is expected to have in-depth technical knowledge of whatever he or she is selling. Trade shows; therefore have come up in a big way in B2B markets. They are considered to be number one promotional tool of US business-to-business companies.($ 17.3 billion per annum are spent on trade shows)

Developers of SEZs projects in Gujarat are pulling out all stops to catch the attention of SMEs in the state by offering them various tax benefits and added incentives. In fact, the developers are formulating different strategies to attract large number of SMEs to set their shops in the Rs.650 core-worth IT SEZ project, planned near Science City in Ahmedabad. 

The SMEs connected with Gujarat’s IT industry will predictably get a major boost, due to number of IT Special Economic Zones (SEZs) being developed in the state. The Centre has already given the ‘go ahead’ to set up almost five IT SEZ projects in the state. Most of these SEZ’s will be aggressively targeting SMEs.

To cement their own growth prospects, SEZ developers in Gujarat are sketching-out different strategies to attract the attention of SMEs, since they have learnt that their future growth depends on how best they support the development of small and mid-sized units, informed, Arghya Banerjee, Senior Analyst at SKP Securities in Kolkata.

The SEZ project scheduled to come up near Science City in Ahmedabad, will reportedly cover over a 26-acre of land and has already received a green signal from the Union ministry of Commerce and industry. The project is said to commence from September 2009, and is expected to get over by March 2011.

Industry experts are pretty optimistic about the upcoming IT SEZ projects in Gujarat. According to them IT SEZ projects in Gujarat will attract huge number of SMEs, once the Software Technology Parks in India (STPI) scheme culminates in March 2010.

Another industry analyst D Dasgupta pointed out that IT SEZ projects in the state will attract more SMEs as they could take leverage of tax benefits and other additional incentives

Calica Construction and Impex Pvt Ltd., an Ahmedabad-based company, will be responsible for commencing work on the Rs 650 crore SEZ project.

Indian companies, across sectors are feverishly trying to make their presence felt on the global radar, despite the downturn delirium gripping them tightly. As many as 20 companies have made their way to the Forbes’s Asia List. Interestingly, 40 percent of the companies who made to the list, are based in China, noted Forbes. 

According to business magazine Forbes, Twenty Indian Companies will make it to the list of 200 best companies after having clocked a sales of less than $1billion in the Asia-Pacific region.

The companies that have made it to the list includes, Biotech major Biocon, industrial equipment firm AIA engineering, IT outsourcing firm Allied Digital Services, software entity AurinoPro Solutions and construction material company Birla feature.

The aforesaid companies have either escalated their sales and profits in the past 12 months or may do so in the coming quarters. Companies involved in sectors like apparel, media, technology and healthcare have predominantly dominated the list. Interestingly, 40 percent of the companies who made to the list, are based in China, noted Forbes.

Other Indian companies who have made it to the list includes, Deepak Fertilisers, gas storage products entity FDC, drug ingredients provider Divi’s Laboratories, GSS America, Micro Technologies, publishing entity Godesic and IT consultancy ICSA, infrastructure firm IVRCL infrastructure, security systems entity Nitin Fire Production, medical devices company Opto Circuits, television broadcaster Raj television, aluminium foil maker Parekh Aluminex, and oil exploration firm Selan Exploration Technology.

Forbes selected the top 200 companies from over 12,000 publicly-listed firms with sales of less than $1 billion in the Asia Pacific region.

In the current year, Forbes Asia ‘Best Under a Billion’ list was predominately dominated by nearly 78 small and mid-sized firms from China and Hong Kong. Japanese companies made it to the list in quite a big number, so much so that Japan was the second most featured company in the coveted list with over 24 companies, while the neighbouring country South Korea had 23 firms.

India bagged the fourth place with 20 companies, while Australia clinched the fifth position with 18 companies.

Bangalore-based cardiac implants maker MediVed Innovations is all set to usher in a new era in the field of Indian healthcare, with its new launch-artificial cardiac Made in India pacemakers- in the coming months. 

When we hear that a Bangalore-based cardiac implants maker MediVed innovations is coming up with India’s first indigenously developed artificial cardiac pacemaker, the development obviously demands attention. The launch will help MediVed Innovations bag a place among top six manufacturers in the wider world for producing devices that control the beating of the heart.

The launch will be nothing short of a game-changer for MediVed Innovations, operating in the domain of domestic therapeutic devices since last three years, informed Founder and Chairman and Managing Director, Mr. Dinesh Puri.

As of now, Ranbaxy, Cipla, Dr. Reddy’s and Biocon have been setting precedent by driving down the cost of therapeutic devices, likewise we will also follow-suit, Puri further added.

The biggest plus, the cost of indigenous cardiac pacemaker will be 3-5 times lower as opposed to the imported devices.

According to industry experts, over half of the country’s cardiac related deaths are because of arrhythmia. A pacemaker will help prolong the life of such patients by 8-10 years.

MediVed, started making artificial Made In India Made In India pacemakers, earlier this year, in a technology tie-up with Uruguay’s CCC. “We have a project plan of Rs 75 crore and will be going in for another round of overseas capital in the next six months,” Mr Puri said.

The company has already supplied 50 Made In India pacemakers to some hospitals and will be soon appointing distributors in India and other emerging markets. Chinese and Spanish original equipment manufacturers have already expressed their interest in the products. According to Puri, an indigenously developed pacemaker would cost Rs.60, 000-Rs.1.5 lakh, while an imported pacemaker would cost around Rs 3.5-5 lakh

The active cardiac implant industry is coming up in a big way. There is also demand for neuro-stimulators for depression, Alzheimer’s and Parkinson’s disease. “Within a span of three years, the company plans to make 10,000 Made In India pacemakers and will be achieving a turnover of around Rs.150 core,” Puri further opined.

There is a massive demand for Made in India pacemakers in the country. According to a recently published data, every year, around 20,000 patients of arrhythmia or irregular heartbeat go in for a pacemaker in the country. Unaffected by the slowdown, the domestic medical devices market stood at $2.7 billion (around Rs 13,500 crore) in 2008.

The market for Made in India pacemakers or cardiac rhythm management and interventional cardiology devices is predicted to grow 13 per cent.

Medi Ved is also into making cardiac pacing leads, ECG programmer systems, patient wands and pacing system analysers.

Business-to-Business Markets are very different from Consumer markets, as different as a proverbial chalk and cheese. The differences are so deeply embedded that even business strategies are formalized accordingly. To add my two-bit of pseudo-wisdom here, the entire outlook of a B2B marketis quite different from a consumer market. 

Say, for instance, the shirts we buy. What do you think? The shirts arrive at the shop right away. No, there is a process involved, a value-chain that starts with a consumer demand, and from here on dozens of business processes or services take off. In case of shirt, first the cotton or fibre is woven into a cloth, and then it is turned into a garment, then packed and distributed through various levels, before it is finally made available to the end consumers. The process involved somewhat reads like this: companies sell cotton to merchants, who then sell it to spinners, who sell it to weavers and finally to garment makers, so on and so forth. Unlike in the consumer markets, here the buyers don’t buy for sheer pleasure, but their ultimate objective is to add value to the products and then move the products down the value chain, before they reach the general public.

In other words, b2b marketing is all about meeting the demands of businesses.

There are about ten major factors that make business-to business stand apart from consumer markets. The ten factors are described in detail below:

1] Complex Decision Making Units Govern B2B Markets

It has generally been observed, in a traditional household, be it Indian or otherwise all crucial decisions are the preserve of the prominent few. Even when it comes to purchasing items such as food, clothes or cigarettes, a chosen few in the family, call the shots. Akin to a conventional household, even in a business-to-business world there is a Decision Making Unit (DMU) that presides and decides over matters. This could be a highly complex unit or has the potential to be so.

Say, for instance, purchase of low value products, any junior level employee could be engaged, but when it comes to buying a plant considered crucial for company’s growth, many more people get involved and decisions are made over a protracted period. Nonetheless, DMU at any given point of time is said to have a short-term existence, expert’s drop-in, give their vital suggestion and then back-out. In fact, people involved in DMU keep changing due to high attrition rates.

All these aspects have implications on Business-to Business markets. The target group for B2B communicators is vague, in the sense that they keep changing, comprising individuals with different tastes and motivations. Buyers look forward to a good deal. Production Managers desire high throughput. Health and Safety Executives wish to keep the risk low. Moreover, every person, who is part of the DMU, will bring along with him/her psychological and cultural baggage. All this brings to the fore some interesting variations, which eventually influences the selection of products and suppliers.

Business-to-Business purchases can be divided into four different categories according to the financial value and business risk involved.

• Low-risk, low-value purchases- More often than not, a junior person is involved, because there is hardly any financial or business risk involved. To put it in other words, only little thought process goes into decision making.

• Low-risk, high-value purchases- Sometimes purchase of raw materials calls for a combination of technical and marketing personnel. Even senior people, like board members have to be roped in. This complexity is imperative, just to ensure that cost is minimized without impacting the quality aspect. Purchasing personnel’s may be the chief decision makers, who would prefer to look at it transaction-by-transaction basis, under the supervision of technical employees.

• Low value, high risk items- Say, for instance, the purchase of office-insurance should comprise a mix of specialists and purchasers. There is risk in the product, and not in the price involved and each transaction carried out tends to be unique, so the presence of expert, mainly an in-house legal expert would be important whenever a deal is carried out.

• High value, high risk purchases- Here large numbers of decision makers are involved, evaluating a large range of purchase decisions. For instance, for purchase of plant equipment, a CFO, R&D Director, Production Director, Purchasing Director, Head of Legal Department, CEO and number of top management department heads are involved.

The Role of a Business-to-Business marketer

The role of a BtoB marketer assumes crucial importance because he/she is facing a very knowledgeable buyer. So he/she should be well-prepared in advance and should demonstrate high-level of competence in all the interactions with the target audience. Not just the product knowledge, the B2B marketer should have all the necessary technical and other back-up information that the buyer will seek during purchases.

The marketer should also display due diligence and patience when negotiating with the Decision Making Unit, addressing all their fears of finance, production, technical and other decision-makers.

2] B2B Buyers adopt a more logical approach

There is a yawning gap in the approach of B2B buyer vis-à-vis a conventional consumer. We believe that a B2B buyer leaves his emotional baggage at home, as opposed to a normal buyer.

The normal buyer loves to show off. He spends wildly as per his whims and indulges in unnecessary expenditure. For instance, he may spend $3000 on a jacket, which is high on glamour quotient, instead of opting for a $200 counterpart -which better serves the purpose- available at a neighborhood shop. A conventional consumer, doesn’t think twice before shelling out $1000 for a season ticket at a football club that inevitably turns out to be a disappointing experience every Saturday, or spends $6.50 on a packet of cigarettes, and invite all health problems.

The fact is that consumers being less-informed and less accountable perform tasks to please themselves; this is not the case with B2B buyers. B2B buyers have ROI (return on investment ) on mind. They buy what they need and not what they want.

The Role of a B2B Marketer

The logical approach of B2B buyers help B2B marketers in a big way, as they have to simply focus on designing and manufacturing good products and delivering them on time and at a good price.

All said and done, however, the job of a B2B buyer involves loads of risks. B2B buyers have a lot at stake, his reputation, his credibility. No B2B buyer will buy an unreliable product or service, as emotional issues such as trust and credibility are absolutely crucial for him. A B2B buyer places greater emphasis on his brand, and reputation, which conveys reliability and consistency of his products.

3] B2B Products are Complex

Similar to complex Decision Making Units in business-to-business markets, B2B market products are typically complex.

When it comes to purchase of a consumer product, it can be carried out very easily, without giving much thought to the finer aspects, however the opposite is true when it comes to purchase of industrial products. Industrial Products are largely custom-made and calls for high-level of fine-tuning, while consumer products come in a largely standardized format. Even complex consumer products can be chosen by following fairly simple parameters. Say, for instance you may buy a car going by its looks and speed. You might buy a stereo, merely because you like its sound quality.

On the other hand, even simple industrial products have to go through expert examination and modification before buying in B2B markets. For example, a turbine manufacturer or a commercial website designer won’t buy a product just by its look and feel. Instead the purchase of turbine will involve a whole host of technical, productivity and safety issues, whilst the choice of website will depend on various parameters like its interactivity with users and its capability to draw potential clients via search engines.

Buyers of consumer products are hardly interested in technical details of the products. Majority of the car buyers, for instance, are only concerned with the speed of the car and how it will attain the maximum required speed. Likewise, the buyer of Chocolate bar is far more interested in knowing the taste of the chocolate than in the technology and ingredients that are involved in its making. So naturally, consumer products are often marketed in ways that are superficial.

Car Manufacturers sometimes may completely turn a blind eye to cars performance; instead they show interest in the non-physical attributes like sex-appeal of their products, while, Business-to-Business campaigns provide the target audience with specific factual information. A company, while buying vehicles for its sales force is unlikely to consider the sex-appeal of the car. In fact, most of the target companies are well-informed about the product they deal in, so the role of promotional material in a BtoB business is merely confined to providing product specifications.

The Role of Business-to-Business Marketer

The basic quality every B2B marketer should develop is to gather complete information on the technical aspects of the product or services he is selling. Not just technical details, the marketer should have in-depth information on aftersales services, problem resolution, client management etc. B2B sale is typically a ‘technical sale’. So salespeople in business-to-business markets are considered extremely experienced and technically oriented.

India’s apparel export industry has been badly hit by the global slump, reports Caroline Andrade 

The global economic slowdown has begun to take its toll on Indian exports. The textile industry by far is the worst industry affected, and with garment sales drying up in the U.S, suppliers in India have nowhere to turn. The condition is desperate now, because the industry has taken a hit when many of the leading players had invested huge sums in upgrading infrastructure and expanding capacities, planning to meet the growing demand of the export markets.

According to the Economic Times, India with apparels exports worth $9.7 billion in 2007-08 is the fifth largest exporter of readymade garments in the world. However recent data released by Apparel Export Promotion Council (AEPC) showed that apparel exports plunged 11.29% in November 2008 to $621 million dollars, compared to $700 million during the same period in 2007.

This could worsen during the current fiscal year, when apparel exports are likely to fall 24% short of $11.62 billion target and may wind up at $8.78 billion. Latest surveys conducted by the AEPC in Gurgaon and Okhla towards December-end showed 84% manufacturing units reporting a fall in export orders and employment in the range of 20% to 80%.

In 2008, Bangladesh’s exports increased 11%, while India’s exports were down 1.25%. The conditions after September worsened. While Bangladesh’s exports grew by 21%, India saw a decline of 10-12% in the September-December ‘08 quarter.

Last year, India even lost its position as the fifth largest apparel supplier to the US. Vietnam is also posing as a serious threat and is expected to overtake India this year. Bangladesh currently enjoys cost advantage because of cheap labour.

Explains, N. Kanagaraj, the proprietor of M.K Textiles, in Tirupur district, “Our buyers are not able to sell their goods in their country, because people are not interested in buying the goods. So they are selling the goods at a reduced price in their country. The exporters to the U.S have been reporting about payment defaults. There are also instances where the overseas buyers have been asking for price reduction and delayed payments.”

S.N Rangaiah, general manager, accounts & finance, Gokaldas Exports Ltd. agrees. He says, “Gokaldas is not getting orders. We have factories on rental basis, so my industry is getting impacted; consequently I have had to reduce my facilities by 30%.” He elaborates saying, “I cannot pay salaries to all my employees now, and thereby my employees cannot be maintained well. I have also had to reduce my manufacturing facilities.”

“The customers who were buying goods worth Rs.100 crore earlier, now buy goods only worth Rs.70 crore. It is a chain reaction, if the demand goes down; even I am bound to get affected.” He adds, “My revenue entirely depends upon the U.S, if their economy is not doing well, then my export orders are going to be affected.”

The sharp decline in the export orders, has led to a subsequent decline in the profit margins of various companies. Bangalore based Gokaldas Exports, Arvind Ltd, Bombay Dyeing and Manufacturing Co. registered losses in the October-December quarter.

Financial results of 50 major companies listed in the Bombay Stock Exchange, showed that although the turnover increased, profits became negative in the second quarter in the year 2008.

Gokaldas Exports, controlled by the equity giant Blackstone, reported a net loss of Rs.15 crore for the third quarter of the current fiscal as against a net profit of Rs. 17 crore for the corresponding period of last fiscal. Gokaldas, which exports for brands like Nike and Gap, noted that even as sales moved up marginally, it could not help trimming its expenditure and it amounted to an increase of around 6 percent.

Coming summer, the MD Rajendra Hinduja expects the situation to be even worse with a 30-40% dip. “The turnover of our company is reduced and the losses incurred were nearly 25- 30%,” says S. N Rangaiah of Gokaldas Exports. He explains, “We had made forward covers for the dollars. So if in last January (2008), the value of the dollar was Rs.42, we made advance booking of the dollar, thinking that it would be valued at Rs. 43.”

“However now that the value of the dollar is Rs. 51.16, I am not getting it at that value. Hence if I had not to make that forward cover, I would not be incurring losses and would get it at the current rates.”

Sumir Hinduja of Gokaldas Images says, “Prices get lower obviously. Most customers prefer to buy something cheaper, so brands like GAP and Old Navy have more demand in the U.S.” He adds, “Brands like Walmart, having target operations, are expanding their business, by selling cheap priced goods. They are like the Big Bazaar of India.”

Says Mahesh Doshi, of D.M Apparels, Mumbai, “In the long run profits have been down by about 50%,” He explains, “If the volume of turnover comes down, the affect is geometrical; lesser margin lesser turnover.”

Indian exporters are also at a disadvantage on the duty drawback front. Duty drawback is the reversal of taxes paid on the inputs used in garment manufacturing. India offers a duty drawback of 8% on exports while in China it is 17%, in Vietnam it is 15% and in Bangladesh it is 14%.

S. N Rangaiah of Gokaldas Exports says, “The one relief package applicable to us is the duty drawback scheme, which is a cash incentive and most of the garment industries go for this scheme, but there is no income here. Hence we have not been benefited directly.”

“The industry has been fighting for an increase in the duty drawback scheme so though the government announced a 1,400 crore package to the apparel industry per se, the industry is not benefiting from it, except for the 2% relief package given by it.”

He explains that earlier the interest rate was high at 4%, and the government brought it down to 0% and then increased it again at 2%. “Now we are requesting the government to increase it more by 2%,” he concludes.

However, ministry officials seem to be optimistic about doing something for the revival of this industry and say that it is only a matter of time. Says, Bala kumar, assistant director, Ministry of Textiles, Government of India, “Suppose if the industry wants to avail of the schemes, then they have to apply for a loan from the bank. The bank in this case means the Government of India, so once the financial allocation of the government gets exhausted, then they (textile industries affected) will be given the money next year. There is no problem, it is only a matter of time.”

Yet, Bala Subrahmanya, Professor of Economics, Indian Institute of Sciences, Bangalore says, “When already investments are made, the government could have helped the Indian exporters, by diversifying their market ranges. Money is not the solution; a market needs to be created for those suffering. It would be helpful for those incurring losses, but only to a small extent.”