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BRAND MANAGEMENT

RELEVANCE OF BRANDING
FOR IT COMPANY
(A RESEARCH PAPER)

SUBMITTED TO SUBMITTED BY

PROF. SUBHADIP ROY GROUP – 7, SECTION B

FACULTY, IBS HYDERAD ANURAG GUPTA (08BSHYD0136)

R. BRIJESH (08BSHYD0187)

KUSH GUPTA (08BSHYD0369)

KRITI SINGH (08BSHYD0357)

KUNAL DAVEY (08BSHYD0365)

K SWAPNEEL (08BSHYD0360)

MOHIT SOOD (08BSHYD0443)

NIMISH RASTOGI (08BSHYD0498)

TAKSHILA SETHI (08BSHYD0882)


BRAND MANAGEMENT

CONTENT

Sl. No. PARTICULAR PAGE No.

1.0 INTRODUCTION................................................................................................................2

2.0 IMPORTANCE OF BRANDING FOR IT COMPANY.....................................................2

3.0 HOW DO YOU BRAND IT COMPANY?.........................................................................3

3.1 CORE VALUES..........................................................................................................................4

3.2 CORE COMPETENCY...............................................................................................................4

3.3 HUMAN RESOURCE................................................................................................................5

3.4 PRODUCT AND SERVICES.....................................................................................................6

4.0 COMMUNICATING A BRAND FOR AN IT COMPANY...............................................6

4.1 EMPHASIZING ON CORPORATE SOCIAL RESPONSIBILITY............................................7

4.2 BRANDING THROUGH HUMAN CAPITAL..........................................................................7

4.3 USING APPROPRIATE ADVERTIZING MIX.........................................................................7

5.0 GENERIC MODEL FOR BRAND EQUITY OF IT COMPANY......................................9

6.0 CONCLUSION..................................................................................................................10

7.0 REFERENCE.....................................................................................................................11

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1.0 INTRODUCTION

It takes over five decades for an FMCG company to establish its brand equity but less than
one decade for an IT company to lay its footholds in its industry. Every company in every
industry builds a brand roadmap to succeed in the market place. But the brand definition and
brand properties are unique for each industry and each company. These are defined not by the
companies, but by the customers and markets they serve. Customers of an FMCG industry
are different from the customers of an IT industry and so the roadmaps of companies in each
of these industries are different. However, there are certain key components of brand strategy
that place all the companies and all the industries on a common platter. These are core values,
core competencies and perceived quality of product and services. Not all companies want to
leverage on all these three aspect of brand strategy. An FMCG may focus on perceived
quality of products and services to build a brand equity through commodity, personal or
emotional branding. Financial institutions may focus on core competency to build a brand
through corporate branding. For an IT industry, it is important that the companies identify all
the three aspects of brand strategy for growth and sustenance.

Through this paper, we shall gauge the importance of key components of brand strategy in an
IT company that could also be differentiating points in building brand indispensability. Also,
we shall analyze the role of brand communication in building brand equity. Based on the
above, a generic model is created that aligns brand identification and brand communication to
develop brand equity of an IT company.

2.0 IMPORTANCE OF BRANDING FOR IT COMPANY

We would not find much literature or adequate research on relevance of branding for an IT
company. But the same is not true in case of FMCG companies. Features of FMCG industry
that differs from an IT industry are as follows –

 Direct, large scale consumers thereby higher usage penetration


 Limited value of the products
 Availability of substitute and higher replacement
 Sensitive and fast changing consumer behavior

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 Generic product or Expected product categories

IT industry caters to high value services and selected scale of customers. It provides a
spectrum of augmented or potential product categories to its customers. Thus the Brand
dimension that we can associate an IT industry to, is more of experiential & rational and less
of emotional, which is quite contrary to FMCG industry. Branding strategies of each of these
dimensions (emotional, rational and experiential) vary. Emotional branding could be
addressed by design based, benefits based or feature based positioning; rational branding
could be addressed by price based, usage based positioning and experiential branding could
be addressed by tradition based, technology based, value based and competitive based
positioning. Thus the goal of any company should be to identify the right position and
validate it. For an IT company, appropriate positioning is achieved by branding through
employees, branding though customer experience and branding through consistent quality
services that exceeds the expectations of the customers.

It is usually observed that IT companies usually do not allocate enough money to fund a real
branding effort. This is because their earnings are utilized for lead generation, consultative
selling cost and to support customers and channel partners. Funding might not even be
necessary, for the reason that if the brand is well communicated through their products and
services, the value proposition of the brand is well delivered. Also unlike FMCG, brand need
not be reinforced explicitly in IT industry. The reinforcement happens through consistently
delivering quality products and services and providing customers experience. Companies
like BEA Systems, BEST Software, Peoplesoft make good money even without any branding
effort. This does not alleviate the importance of branding effort but only substantiates the fact
that branding of an IT company is not just the function of marketing effort for brand
recognition, but it is the function of inherent brand value embedded in the company’s value
system and processes. Ones the brand is established it can be used as reference points for
formulating corporate strategies.

3.0 HOW DO YOU BRAND IT COMPANY?

The drivers of brand equity of an IT company are as follows –


 Core Values

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 Core Competency
 Consistency in quality product and services
 Human Resource

We shall now understand the relevance of each of these drivers and validate their importance
through examples.

3.1 CORE VALUES

Core values are not list of cliché attributes that can are picked up from the list of adjectives
and defined by the company. Core values are inherent in the vision of the company and
emerge from the value system of its founder. Thus they are formed much before the company
lays down its structure. Slowly, the values permeate into the internal system - processes and
practices that eventually become the culture of the organization and into the external
environment – through quality product and services. Thus internal systems and external
environment both become party to the value system and create a perception in the mind of
customers. This perception creates brand image. The brand image continues to exist till the
business exists. Therefore for the longevity of business it is only appropriate that the core
values either remain intact or be enhanced. They can become a differentiating factor in a long
run, in a much competitive environment. Any branding effort should ensure that the values of
the organization are clearly communicated.

3.2 CORE COMPETENCY

During the course of business, a company develops learning and coordination skills, which
offers the company a competitive advantage. Thus core competency helps the company in
creating new products and services. It is observed that core competencies cannot be achieved
if the core values are not conducive to effective learning and coordination. It is only a myth
that the core competency could be developed by outspending competitor on R&D or
integrating vertically. The greatest challenge does not lie in developing core competency, but
it lies in identifying it at the early stage. Companies that have identified their core
competency at the early stage and delivered the same through their services have created
unmatched brand image for themselves. Thus core competency could be one of the vital
drivers of high brand equity.

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Tata Consultancy Service’s core competency in innovation and IT transformation has helped
in delivering high quality services and solutions. TCS is world’s first organization to achieve
an enterprise wide maturity level 5 on CMMI and PCMM.

Wipro has core competency of cost optimization and business transformation services. Cost
optimization is not an adequate tool to build a brand. In the long run, cost optimization may
drift from the company’s values. It has resulted in the company focusing only one few high
technology areas like telecom, internetworking and data communication.

3.3 HUMAN RESOURCE

There are two aspects of Human Resource in an IT company that are of utmost important.
One is the number of employees deployed for a project, and the other is the proficiency of
each employee. These two aspects could make or break relationship with the customer and
define the long term path of the organizations. Human capital is the driver of value system of
a company and a facilitator of best products and services to the customers. Brand promise can
be either fulfilled or compromised on the basis of employee’s desire and ability to promote it.
Hence, it is important that an employee’s behavior is consistent with the goal that the firm
has set with respect to the customers. Employee’s commitment, capability and loyalty have a
direct link to the corporate performance. Thus, it is imperative for an IT company to ensure
that its human capital projects company’s values, thereby creating an employee brand.
Employer branding not only creates a positive image of a company in the minds of the
external stake holders (clients), but also creates employee value proposition that evokes
emotional and rational benefits for current and prospective internal stake holders
(employees). EVPs reflect the image the organization wants to create. IT companies should
leverage on these and differentiate to gain brand equity.

Employer branding at Infosys has been the tiara of its success since inception. It has
leveraged the recognition of “The best company to work for in India” and “Employer of
choice” awards and topped the charts for the year 2001, 2002 and 2005. However, it had seen
a major setback in 2003, when it no where appeared in the list of top 25 employers. But the
company followed the principle of scalability and improved its ranking to second position in
the year 2004. Training practices, innovation and flexibility differentiates Infosys from its
competitors.

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3.4 PRODUCT AND SERVICES

The company does not have to walk an extra mile to achieve excellence in its product and
services. If the above three drivers (core values, core competencies and human resource) are
taken care of, the result is customer satisfaction and better brand experience. Products and
services are important, for they validate the efficient implementation of the three drivers
mentioned above. On one hand, they act as a tangible representation of all that a company
wants to deliver, and on the other hand they are the scorecards for customers to fill based on
their product experience. No brand becomes successful if its product fails to deliver what is
expected, nor do the brands grow if the company does not deliver more than what a customer
expects. Brand indispensability and brand experience are direct functions of the quality of
product and services offered. In an IT industry it is of utmost important that the services
offered create an everlasting relationship with the customer.

4.0 COMMUNICATING A BRAND FOR AN IT COMPANY

The existence of the drivers of brand equity could only be appreciated if it well
communicated to the world outside. Communication of a brand of an IT company is very
different from that of an FMCG company. Unlike FMCG companies, which communicate
extensively through advertising, packaging, promotions, merchandizing and events; IT
company communicate through direct and interactive marketing, public relations and less
extensively through advertising. The focus on corporate branding and employer branding are
paradigm to this industry.

Effective ways to deliver value of a brand in an IT industry are –

 Emphasizing on CSR Initiatives


 Branding through Human Capital
 Using appropriate advertizing mix

We shall discuss each of the above and validate with examples.

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4.1 EMPHASIZING ON CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility does not have its meaning limited to the services the
company offers for the development of the society, but also represents the commitment of the
company to build a self regulating mechanism to ensure that it adheres to ethical standards,
law and international norms. A company could carry out CSR successfully only if its value
system supports it, besides true involvement of its employees. Thus it will be appropriate to
say that communicating CSR requires an understanding of consumer insights. Consumer
perceives the credence values that are founded in the ethical stands of the organization and
delivered by exhibiting of trust, sensitivity, responsibility, accountability commitment
through CSR. They further reflect on the acceptance and recall of the brand. Thus CSR is a
powerful tool through which IT companies could gain recognition and provide value to
customer’s partnership with them.

4.2 BRANDING THROUGH HUMAN CAPITAL

As discussed earlier, employer branding puts an IT company on a strong foot hold in market
place. This is because customers realize that excellence in services is obtained through happy
and committed employees. Quality of work force would define the return on the investment
for customer on the services he is seeking. Thus customer looks for companies which have
higher employer recognition. This, many a times act as a differentiating factor for an IT
company to win contracts from reputed clients. The trend in IT industry has been that the
Brand personality is characterized by the head of the company who runs it. CEO as brand has
been a major influencing factor to the success of the organization in a competitive market
place.

4.3 USING APPROPRIATE ADVERTIZING MIX

The integrated market communication utilized by IT companies comprises of –

 Advertisements for recruitment in print media – Newspapers and magazines


 Advertisements of products and services through print media – Newspapers and
magazines
 Events – Shows / Sponsorships
 Press releases

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The value propositions exhibited through the above are –

 Commitment
 Trust
 Integrity
 Accountability
 Innovation
 Reliability
 Competitiveness
 Performance
 Advanced technology, etc.

From the above we see that these positioning factors are the indicators of the core values of
the organization, which in turn develops a brand image. Brand image that an organization
wants to create can be delivered by making adequate communication efforts on a frequent
basis.

When we see a newspaper advertisement for recruitment in an IT company, the advertisement


focuses on the key values the company stands for; therefore indirectly calling for candidates
who align the company’s value systems with their own. This builds an employer brand.
Events, shows and sponsorship communicate a company’s commitment to encourage
creativity, innovation and quest for technology improvisation.

IT companies climb the ladders of success much faster than other companies, thus they are
always subjected to media attention with success attributed to their innovative products and
services or to the leader of the organization. The world acknowledges to the success of the
organization particularly to the success of the leader, thereby making him an icon. Any press
release by the CEO or an innovation in the products and services catches media attention. The
amount of brand equity such a communication generates is unimaginable. While the negative
publicity can break the organization, positive publicity will do the organization wonders.

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5.0 GENERIC MODEL FOR BRAND EQUITY OF IT COMPANY

The figure given below depicts the linkage between the elements of brand identification and
brand communication structure for developing brand equity.

BRAND IDENTIFICATION

CORE COMPETENCY
Facilitates the creation of
Creates

CORE VALUES QUALITY PRODUCT AND SERVICES BRAND EXPERIENCE


Provides
Supports

Imbibed in HUMAN RESOURCES Creates

Develops

BRAND EQUITY

BRAND COMMUNICATION Develops

CORPORATE SOCIAL RESPONSIBILITY


EMPLOYEE VALUE PROPOSITION THROUGH PRINT PRESS
MEDIARELEASES, SPONSORSHIP

This model can also help in identifying the gap and bridging it. We say that a gap exists if the
brand value as perceived by the customers is different from the value the company wants to
deliver. The gap could exist due to improper positioning of the brand or inappropriate brand
communication method used. For any company with a long term perspective, brand valuation
should be a frequent practice. There are many brand approaches to valuation such as
awareness and franchise valuation method, excess earning method, addition of all
communication investment and relief from royalty method. While these represent both direct
and indirect technique of measurement of impact of brand commercially, through external
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environment, they fail to look inwards. These methods need not necessarily hold good for an
IT company. The real valuation method shall take cues from the external environment and try
to gauge the effectiveness of their internal value structure. Before we begin to calculate using
any of the above methods, a thorough internal evaluation is required.

Based on the gap identified, we should develop the brand roadmap to bridge it. The problem
existing with improper positioning of value perspective of the brand should be given greatest
attention. One should follow a backward approach in seeking the solution.

6.0 CONCLUSION

Branding in an IT industry is a unique concept and cannot be generalized with any other
industry. Within the industry as well, different positioning of the brand has helped companies
gain a strong foot hold in the market place. Though the aspects that build brand equity may
not be generalized, certain elements of brand identification remain common for all the
companies in IT industry. Core values, Core competencies, Human Resource and Quality
product and services are the foundations of branding strategy. Through appropriate
communication mix, the brand could reach the mass in the way the company expects them to
perceive. Thus a generic model is created which gives linkages between the elements that
help creating brand equity. The same could be used in identifying the brand gap and in
bridging it. Brands are brittle. If it takes years to develop them, it would just takes few
moments to break them. Ones a brand equity is developed and the earnings obtained, one
must continue to maintain the brand image.

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7.0 REFERENCE

1. Morten Bach Jensen, Suzanne C. Beckmann (2007), ‘Determinants of innovation and


creativity in corporate branding: Findings from Denmark’, Journal of Brand
Management, Vol 16, No. 7, pp – 468 – 479.
2. Narumon Kimpakorn, Gerard Tocquer (2007), Employees’ commitment in the service
sector: Luxury hotel chains in Thailand, Journal of Brand Management, Vol 16, No.
8, pp – 532 – 544.
3. Bilal Mustafa Khan (2009), ‘Internal branding: Aligning human capital strategy with
brand strategy’, The Icfai university journal of brand management, Vol 6, No.2, pp 22
– 36.
4. Felicitas M. Morhart, Walter Herzog, & Torsten Tomczak (2009), ‘Brand-Specific
leadership: Turning Employees into Brand Champions’ Journal of Marketing, Vol 73,
pp 122-142.
5. Randle D. Raggio, Rober P. Leone (2009), ‘Drivers of brand value, estimation of
brand value in practice and use of brand valuation: Introduction to special issue’,
Journal of Brand Management, Vol 17, No. 1, pp – 1 – 5.
6. Sunando Das, Curt Stengner (2009), ‘Managing tomorrow’s brand: Moving form
measurement towards an integrated brand equity’, Journal of Brand Management,
Vol 17, No. 1, pp – 26 – 38.
7. Rob Leavitt, Phil Dover (2006), ‘Building brand loyalty for IT services: Lessons from
industry leaders’, Branding Services – Global perspective, Icfai university press
(2006), ISBN 81-314-0103-0, pp 70 - 77.
8. David A Aaker (1991), ‘Managing Brand Equity – Capitalising on the value of a
brand name, The free press publications (1991), ISBN 0-02-900101-3.
9. M G Parameswwaran (2006), ‘Building Brand Value’, Tata Mc-Graw Hill
publications Co. Ltd. (2006), ISBN 0-07058322-6.
10. Mike Moser (2003), ‘United we brand: Bringing brand values inside’
http://hbswk.hbs.edu/archive/3388.html, 24/3/2003.
11. ‘Branding the company’, http://www.salescreators.com/Section1/branding.html,
3/01/2010.
12. Lawson Abinanti, ‘Branding and positioning’, Pragmatic Marketing,
http://www.pragmaticmarketing.com/publications/topics/03/0312la, 6/01/2010.

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13. Thomas Manning (2009), ‘The convergence of brand and human resource
management’,
http://www.customerthink.com/article/convergence_brand_human_resources,
6/02/2009.
14. Laura Pasternak (2009), ‘Brand beyond marketing’,
http://marketing.about.com/od/marketingyourbrand/a/beyondbrand.htm, 27/12/2009.
15. ‘Brand Valuation’, http://www.ifaia.org/articles%20-5.htm, 28/12/2009.
16. ‘The business vision and company mission statement’,
http://www.quickmba.com/strategy/vision, 22/12/2009.
17. Rahul Neel Mani (2009), ‘Sapient India: Core values rule’,
http://www.expressitpeople.com/20040531/management3.shtml, 28/12/2009.
18. ‘Top 10 software companies in India’,
http://www.rediff.com/money/2008/jul/17sd1.htm, 17/07/2008.
19. ‘Consumer Behavior’, http://www-rohan.sdsu.edu/~renglish/370/notes/chapt05/,
22/12/2009.
20. Prashanth (2006), http://www.cio-
weblog.com/50226711/indian_it_services_companies_top_20.php, 9/07/2006

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