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)