Indian software firms are increasingly taking to products in an effort to move up the value chain. But as V Senthil Kumar points out, in the final analysis, the success of a software product depends largely on the fundamentals of classical marketing: a good product, availability, pricing and post-sales support

Many large Indian software companies went the services way since it was the easiest from an investment and revenue standpoint. This also resulted in pricing becoming the deciding factor in winning business. Again, there has been very little effort to specialise in any one particular market segment, and this prevents these companies from ‘productising’ their learning and knowledge gained from various projects.

However, the current market situation has forced Indian companies to look at capitalising on their knowledge base to build Intellectual Property, and also to move up the value chain even where services are concerned. It is only now that many companies have realised that a business model based on services alone is inherently restrictive, as its growth is linearly related to manpower. This means that the company will have to virtually double manpower to double revenues. Software product companies, on the other hand, can geometrically or even exponentially increase revenues without a corresponding increase in manpower.

But what hurdles does an Indian software company face when it adopts the product route? These are broadly the following:

• The ‘Made in India’ tag is a deterrent in the global markets, as Indians are known for developing customised software, not software products;
• The lack of comprehensive domain knowledge of any particular industry;
• The lack of product marketing skills—as against services selling which in many cases is just costing on a time and material basis;
• Software product development is inherently a high investment, high-risk strategy, without assured returns. This itself is a significant deterrent to most Indian software companies as it is a sea change from the services business mindset, where returns are rapid, and investments low

Assuming that Indian software companies do build capabilities that enable them to develop products, the next step will be to market it effectively. In fact, marketing the product is as important as building it. So how do companies operating in the software product space build a global brand?

The first step towards creating an international brand involves understanding the unique characteristics of the technology space. The IT industry is still relatively new, operating in a dynamic market that is constantly reinventing itself. These market conditions make speed and availability vitally important as customers can vanish in a fraction of a second. The rapid evolution of the IT market makes it imperative that the IT company know exactly who the customer is and what are his specific needs?

Here are some attributes of what customers look for in an IT brand:

• Trustworthy and confidence building
• Innovative
• Adaptable and flexible
• Futuristic
• Credible

So what would be the essentials for marketing a software product to create these brand values? There are five fundamentals that need to define marketing a high-tech product.

• Awareness: The first step is to educate the market about the product. Sustained engagement of the market through hard-hitting images and powerful selling tactics will result in mind share for the new product.
• Availability: It is said of modern day markets that the consumer is in it only for a fraction of a second. If you are in the right place at the right time, you will win more customers. On the contrary, if you are not available then others who are, will grab him, irrespective of the benefits your product offers. But how can a company with limited knowledge of different international markets build a strong network of vendors? The answer lies in partnering with successful local players. Partners help build wider networks, allowing for greater accessibility to customers. They also bring to the table invaluable knowledge of local market differentiators.
• Acceptable: IT products are a bundle of non-tangibles. The user experience promised by IT products cannot be simulated. Therefore, messages conveyed through marketing campaigns need to clearly defined to create as closely as possible the experience the product guarantees. Promoting your brand through endorsement by key customers with strong market influence and high brand recall generates tremendous credibility.
• Assurance: Sale of an IT product is not a one-off deal. It involves cultivating long-term relations with customers. Sustaining this relation calls for a well defined product roadmap, taking into consideration support and service initiatives and value addition through upgrades. When operating in an increasingly complex and rapidly changing technological space, product designs need to be flexible, allowing for maximum interoperability.
• Authentic: New products in the technology space rapidly breed look-a-likes. In order to stay ahead of them, the marketing campaign should focus on distinguishing the product from others.

Markets for technology products are characterised by aggressive competition, high degrees of obsolescence and dynamic trends and cycles. Comprehensive market research will help assess level of technological progress of targeted markets and assist in designing market specific approaches and models. However, marketing strategies need to be multi-dimensional, addressing local needs and integrating them with global perspectives. In the final analysis, the success of a software product depends to a largely on the fundamentals of classical marketing: a good product, availability, pricing and post sales support.

The author is head-corporate marketing, i-flex solutions