INFORMATION TECHNOLOGY IN MARKETING OF SERVICES: THE INDIAN PERSPECTIVE

“Companies best equipped for the twenty-first century will consider investment in real-time systems as essential to maintaining their competitive edge and keeping their customers.”

- Regis McKenna

Introduction

• Information technology in India is an industry consisting of two major components: IT Services and BPO.

• The sector has increased its contribution to India's GDP from 1.2% in FY1998 to 7.5% in FY2012. According to NASSCOM, the sector aggregated revenues of US$100 billion in FY2012.

• Information technology is playing an important role in India today & has transformed India's image from a slow moving bureaucratic economy to a land of innovative entrepreneurs. The IT sector in India is generating 2.5 million direct employment.

Importance of Information Technology in Marketing of Services• Helps in gaining in competitive advantage over

rivals.• Saves time by providing prompt transaction.• Helpful in CRM and database management.• Service enhancement.• Improved and up-to-date market intelligence.• Helps in improving marketing efficiency and

effectiveness

How Has Technology Changed The Role Of Marketing In The Recent Past?

There’s no denying that technology has changed the way that global citizens receive, interpret and react to information. With the proliferation of the internet at the turn of the twenty-first century, and the rapid evolution of devices that allow quick and easy access to its millions of portals, consumers are finding new ways to interact with companies and with products. Given these new forms of buyer seller interactions, many professionals and individuals alike now believe that the information age, facilitated by evolving technologies, has redefined the role of marketing.

Contd.

The scope of IT in any organization is pervasive and has dynamic repercussions for its business operations, business environment and the way of marketing of its products and services. Three areas in particular will be considered:

• changes in the nature of marketing activities; • changes in the nature and use of marketing information by

enabling the handling of higher volumes of and more complex marketing information (“information effects”);

• Changes in the structure and organization of the marketing function (“invisible effects”)

Contd.

• As we understand, service marketing demands more personalized services which requires personalized communication. Technologies like SFA(Sales Force Automation), CRM(Customer Relationship Management), IMC(Integrated Marketing Communication), CDW (Customer Data Warehouse) for Database Marketing (DM) etc. are good examples of how technology can help the marketer in winning customers’ loyalty.

Innovative ways of marketing

• Quick response or “QR” code is an easy way to encourage website visitors to make know about a company’s.

• Retina trackers/eye-tracking technology (or EEG bands) and brain-wave monitoring, they can make heat maps of where consumers eyes tend to go on a label or a store shelf, or even see what experiences cause the pleasure centers of consumers' brains to light up.

• Big Data Intelligence: Data mining from data warehouses, like Twitter Data Grants, which allows research institutions free access to its public and historical data after submitting a proposal.

The service marketing triangle and technology

Dimensions/types of services on the basis of technology:

Technology Intensive Services Technology Extensive Services

1. (ICT) Information and communication 1. Real Estate Technology-based Software firms.

2. Banking 3. Medical & healthcare

Source: Research work of Sunbdo (2000)

Information Technology is everywhere. Following are the main technology-dependent sectors:-

1. Technology in Banking:- • Automated Teller Machines (ATMs)• Virtual Bank (CAT, i.e. Customer Activated Terminal or

Kiosk).• Image Processing Function• Electronic Funds Transfer at Point Of Sale (EFTPOS)

System or Debit Cards.• Electronic Data Interchange (EDI)• RTGS, NEFT System, IMPS,ECS, CBS• ICICI Bank Tab Banking (Account opening services)

2. Technology in Education:

• Virtual classroom Concept• Digital Library• Projectors- for audio-visual effects.• Smart Board/ Mimio Board Technologies

(Sensor-based-interactive-white Boards)

3. Technology in Health Care:• Electronic Medical Record (EMR): This digital record can hold

the full details of an individual patient’s full medical history, which ultimately helps to direct diagnostic and therapeutic decisions when a patient enters the healthcare system.

• Senseonics: A mobile alert app to monitor glucose level in patients.

• Pedometer: A portable gear to count a runner’s steps, e.g., Nike’s + Fuelband.

4. Technology in BPOs/KPOs:• India is one of the fastest-growing IT services markets

in the world, with three-quarters of large Indian enterprises increased their IT spending in 2013, with an average IT budget of US$ 12.2 million, according to a survey by Gartner.

• A majority of the Fortune 500 and Global 2000 corporations are sourcing IT and ITES from India.

• In 2013, the $13 billion Philippines BPO industry grew by 15.6%, compared with the 8.9% growth of India's $20-billion BPO space – NASSCOM.

India’s top IT company: TCS

Tata Consultancy Services (TCS) was founded in 1968 as a division of Tata Sons by J R D Tata. TCS is one of the largest provider of information technology (IT) services, business solutions and consulting company headquartered in Mumbai. Currently, TCS has over 3,00,000 employees across the globe. It is the largest Indian company in terms of market capitalization and is the largest India-based IT services company in 2013.

TCS’s contribution to India’s GDP

During recent times, TCS has become the country’s biggest wealth creator. According to a Motilal Oswal study, TCS has come out tops in the 2008-13 period, overtaking ITC, which had led in 2007-12. Revenue: F.Y-2012-13= RS. 48426.14 Cr

IT companies on the world stage

IBM TCS Accenture HP Infosys

Series1 202 68 56 54 32

25

75

125

175

225

World's top IT companies by Marketcap

Mar

ketc

ap i

n $

Bill

ion

(As

on D

ec 3

0th

201

3)

Comparison of economic benchmark

2009 2010 2011 2012 2013

TCS 1.1 1.5 2 2.2 2.6

IBM 13.4 14.8 15.9 16.6 16.5

1

3

5

7

9

11

13

15

17

Net profit comparison

Net

pro

fit

(In $

Bill

ion)

Will information technology make marketing obsolete?

Paradoxically, while marketing is almost universally regarded as essential to modern organizations, marketing departments have come under increasing fire.

Charges of inadequacy and inefficiency are common. The U.S. auto industry receives regular abuse, being accused of failing to provide the cars people want. And thus causing erratic behavior in the distribution process.

Contd.

• Information technology blurs the classic strategies of cost leadership (seeking market share through low cost) and differentiation (targeting special market segments), as it offers the possibility of achieving both. This is because it, facilitates not only rapid and flexible design but also targeted delivery of products and services.

Contd. Returning to our question: Will information technology

make marketing obsolete? If we think of marketing in conventional, compartmentalized, planning-back-at-headquarters terms, separate from operations, sales and R&D, the answer is likely to be yes. But, the answer is no, if we think of marketing as distributed throughout the organization, bringing in the voice of the customer through appropriately collected information and helping to define and communicate a bundle of benefits in an integrated way with R&D, operations and sales. Then information and information technology will play a transformational role in strengthening marketing throughout the organization.

Future of Sustainability of Information Technology in Marketing of Services:

The ability of information technology to permit large scale operations and yet provide individual attention is only just beginning to be tapped, thanks to Database Management System (DBMS). As part of information-oriented strategy, many big organizations maintain database of its frequent buyers to provide new services to them, such as "frequent buyer" programs that reward brand loyalty.

Conclusion:

What happens next?

In the next five years, it won’t be strange to see marketing’s function becoming more diluted with information technology, giving birth to marketing-tech teams. CMOs and CIOs will collaborate on greater projects, with the former dropping more budget bucks on information technology than the latter. Why will this happen? Mankind’s fascination with mobile technologies, configured with GPS, 4G and Wi-Fi capabilities, combined with their thirst for information on-the-go will channel attention away from traditional media outlets to handheld devices. Already, the Gartner Group estimates that the mobile application industry will reap USD 15 billion by 2015.