Compulsory Industrial Training Report

On

Study On Marketing Of Service In IT Industry

PREPARED FOR AND PRESENTED TO

PATNI COMPUTER SERVICES

UNDER THE GUIDANCE OF

COMPANY SUPERVISOR NAME COLLEGE MENTOR NAME

Mr.Randhir Kumar

Mr. Vishal Verma

SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF POST GRADUATE DIPLOMA IN MANAGEMENT

BY

MR. ROSHAN PRASAD KARN

IEM MANAGEMENT COLLEGE ANWARI BARABANKI (2009- 2011)

DECLARATION

I, Mr.Roshan Prasad Karn here by, declare that the CIT report entitled Study On Marketing Of Service In IT Industry. , has been done by me under the supervision of Mr.Randhir Kumar Asst. Branch manger of PCS, Lucknow and under the able guidance of Ms. Vishal Verma, Faculty, I.E.M Management College, and it has not been submitted earlier to any university or any other institution.

(ROSHAN PRASAD KARN)

PLACE: LUCKNOW DATE:

ACKNOWLEDGEMENTS

I wish to express my gratefulness to Mr Vishal Verma, faculty and my mentor for the project, I.E.M Management College for her constant guidance during the project.

I am extremely indebted to Mr. Randhir Kumar, Branch Manager, Service Department, Patni Computer Services, Lucknow for giving permission to undertake the project work in his organization.

It is a great privilege to me to express my sincere thanks to Mr., Asst. Manager, Service Department, Patni Computer Services for his help, cooperation and support during my project work.

Lastly, I have absolutely no words to express my feelings of gratitude to the staff members of marketing executives for their full cooperation and valuable suggestions in the completion of my project work.

(ROSHAN PRASAD KARN)

Table Of Content
Description Chapter-1 Chapter-2 Chapter-3 Chapter-4 Chapter-5 Chapter-6 Chapter-7 Chapter-8 Bibliography Introduction Industrial Profile Company Profile Project Profile Observation and Findings Suggestions Conclusion Page No.

INTRODUCTION

STUDY ON MARKETING OF SERVICE IN IT INDUSTRY.,

What Is Service?
A service is the action of doing something for someone or something. It is largely intangible (i.e. not material). A product is tangible (i.e. material) since you can touch it and own it. A service tends to be an experience that is consumed at the point where it is purchased, and cannot be owned since is quickly perishes. A person could go to a caf one day and have excellent service, and then return the next day and have a poor experience. So often marketers talk about the nature of a service as: Inseparable - from the point where it is consumed, and from the provider of the service. For example, you cannot take a live theatre performance home to consume it (a DVD of the same performance would be a product, not a service).

Intangible - and cannot have a real, physical presence as does a product. For example, motor insurance may have a certificate, but the financial service itself cannot be touched i.e. it is intangible. Perishable - in that once it has occurred it cannot be repeated in exactly the same way. For example, once a 100 metres Olympic final has been run, there will be not other for 4 more years, and even then it will be staged in a different place with many different finalists.

Variability- since the human involvement of service provision means that no two services will be completely identical. For example, returning to the same garage time and time again for a service on your car might see different levels of customer satisfaction, or speediness of work.

Right of ownership - is not taken to the service, since you merely experience it. For example, an engineer may service your air-conditioning, but you do not own the service, the engineer or his equipment. You cannot sell it on once it has been consumed, and do not take ownership of it.

Services Marketing
Services marketing is marketing based on relationship and value. It may be used to market a service or a product. Marketing a service-base business is different from marketing a goods-base business. There are several major differences, including: 1. The buyer purchases are intangible 2. The service may be based on the reputation of a single person 3. It's more difficult to compare the quality of similar services 4. The buyer cannot return the service The major difference in the education of services marketing versus regular marketing is that instead of the traditional "4 P's," Product, Price, Place, Promotion, there are three additional "P's" consisting of People, Physical evidence, and Process.Service marketing also includes the servicewomen referring to but not limited to the aesthetic appearance of the business from the outside, the inside, and the general appearance of the employees themselves. Service Marketing has been relatively gaining ground in the overall spectrum of educational marketing as developed economies move farther away from industrial importance to service oriented economies.

DIFFERENT STRATEGIES OF SERVICE MKT. The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation. ADL has two main dimensions - competitive position and industry maturity. Competitive position is driven by the sectors or segments in which a Strategic Business Unit (SBU) operates. The product or service which it markets, and the accesses it has to a range of geographically dispersed markets that are what makes up an organization's competitive position i.e. product and place. Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be renamed an 'industry life cycle.' Of course not only industries could be considered here but also segments.

It is a combination of the two aforementioned dimensions that helps us to use ADL for marketing decision-making. Now let's consider options in more detail. Competitive position has five main categories:
y

1. Dominant - This is a particularly extraordinary position. Often this is associate with some form of monopoly position or customer lock-in e.g. Microsoft Windows being the dominant global operating system. 2. Strong - Here companies have a lot of freedom since position in an industry is comparatively powerful e.g. Apple's iPod products.

3. Favourable - Companies with a favourable position tend to have competitive strengths in segments of a fragmented market place. No single global player controls all segments. Here product strengths and geographical advantages come into play. 4. Tenable - Here companies may face erosion by stronger competitors that have a favourable, strong or competitive position. It is difficult for them to compete since they do not have a sustainable competitive advantage. 5. Weak - As the term suggests companies in this undesirable space are in an unenviable position. Of course there are opportunities to change and improve, and therefore to take an organization to a more favourable, strong or even dominant position.

From here the strategic position of an organisation can be established. Managers then need to decide upon the best strategic direction for the business. For example they might use a Gap Analysis. According to ADL, there are six generic categories of strategy that could be employed by individual SBU's:
y y y y y y

Market strategies. Product strategies. Management and systems strategies. Technology strategies. Retrenchment strategies. Operations strategies.

This well known marketing tool was first published in the Harvard Business Review (1957) in an article called 'Strategies for Diversification'. It is used by marketers who have objectives for growth.

Ansoff's Product/Market Matrix

y y

Market Penetration Here we market our existing products to our existing customers. This means increasing our revenue by, for example, promoting the product, repositioning the brand, and so on. However, the product is not altered and we do not seek any new customers. Market Development Here we market our existing product range in a new market. This means that the product remains the same, but it is marketed to a new audience. Exporting the product, or marketing it in a new region, are examples of market development.

y y

Product Development This is a new product to be marketed to our existing customers. Here we develop and innovate new product offerings to replace existing ones. Such products are then marketed to our existing customers. This often happens with the auto markets where existing models are updated or replaced and then marketed to existing customers. Diversification This is where we market completely new products to new customers. There are two types of diversification, namely related and unrelated diversification. Related diversification means that we remain in a market or industry with which we are familiar. For example, a soup manufacturer diversifies into cake manufacture (i.e. the food industry). Unrelated diversification is where we have no previous industry nor market experience. For example a soup manufacturer invests in the rail business.

Benchmarking
Benchmarking relies upon a comparison between the activities of your own organization and those of another. Originally benchmarking was used in manufacturing operations where one process could be compared and contrasted with another. Think about it in basic terms - you measure a piece of wood along your bench. You keep one end of the wood level/flush with the end of the bench and cut a notch in the bench itself with your chisel at the other end. Then you place other pieces of wood in the same location - the shorter ones you reject and the longer ones you cut down. A benchmark is a measurement tool. Xerox is commonly cited as the original proponent. More recently the definition has broadened to include all business processes, competitive advantages, performance and strategies (Prasnikar et al 2005)

The Boston Matrix

Like Ansoff's matrix, the Boston Matrix is a well known tool for the marketing manager. It was developed by the large US consulting group and is an approach to product portfolio planning. It has two controlling aspect namely relative market share (meaning relative to your competition) and market growth. You would look at each individual product in your range (or portfolio) and place it onto the matrix. You would do this for every product in the range. You can then plot the products of your rivals to give relative market share.

This is simplistic in many ways and the matrix has some understandable limitations that will be considered later. Each cell has its own name as follows. Dogs. These are products with a low share of a low growth market. These are the canine version of 'real turkeys!'. They do not generate cash for the company, they tend to absorb it. Get rid of these products. Cash Cows. These are products with a high share of a slow growth market. Cash Cows generate more more than is invested in them. So keep them in your portfolio of products for the time being. Problem Children. These are products with a low share of a high growth market. They consume resources and generate little in return. They absorb most money as you attempt to increase market share. Stars. These are products that are in high growth markets with a relatively high share of that market. Stars tend to generate high amounts of income. Keep and build your stars. Look for some kind of balance within your portfolio. Try not to have any Dogs. Cash Cows, Problem Children and Stars need to be kept in a kind of equilibrium. The funds generated by your Cash Cows is used to turn problem children into Stars, which may eventually become Cash

Cows. Some of the Problem Children will become Dogs, and this means that you will need a larger contribution from the successful products to compensate for the failures.

Value Chain Analysis.

The value chain is a systematic approach to examining the development of competitive advantage. It was created by M. E. Porter in his book, Competitive Advantage (1980). The chain consists of a series of activities that create and build value. They culminate in the total value delivered by an organisation. The 'margin' depicted in the diagram is the same as added value. The organisation is split into 'primary activities' and 'support activities.' Also so value curve. Primary Activities. Inbound Logistics. Here goods are received from a company's suppliers. They are stored until they are needed on the production/assembly line. Goods are moved around the organisation. Operations. This is where goods are manufactured or assembled. Individual operations could include room service in an hotel, packing of books/videos/games by an online retailer, or the final tune for a new car's engine.

Outbound Logistics. The goods are now finished, and they need to be sent along the supply chain to wholesalers, retailers or the final consumer. Marketing and Sales.

In true customer orientated fashion, at this stage the organisation prepares the offering to meet the needs of targeted customers. This area focuses strongly upon marketing communications and the promotions mix. Service. This includes all areas of service such as installation, after-sales service, complaints handling, training and so on. Support Activities. Procurement. This function is responsible for all purchasing of goods, services and materials. The aim is to secure the lowest possible price for purchases of the highest possible quality. They will be responsible for outsourcing (components or operations that would normally be done in-house are done by other organisations), and ePurchasing (using IT and web-based technologies to achieve procurement aims). Technology Development. Technology is an important source of competitive advantage. Companies need to innovate to reduce costs and to protect and sustain competitive advantage. This could include production technology, Internet marketing activities, lean manufacturing, Customer Relationship Management (CRM), and many other technological developments. Human Resource Management (HRM). Employees are an expensive and vital resource. An organisation would manage recruitment and s election, training and development, and rewards and remuneration. The mission and objectives of the organisation would be driving force behind the HRM strategy. Firm Infrastructure. This activity includes and is driven by corporate or strategic planning. It includes the Management Information System (MIS), and other mechanisms for planning and control such as the accounting department.

INDUSTRIAL PROFILE

COMPANY PROFILE
Patni Computer Systems Ltd. (Patni) (BSE: 532517, NSE: PATNI, NYSE: PTI) is one of the leading global providers of Information Technology services and business solutions. Over 17,500 professionals service clients across diverse industries, from 30 international offices across the Americas, Europe and Asia-Pacific, and 23 Global Delivery Centers in strategic locations across the world. Patni have serviced more than 400 FORTUNE 1000 companies, for over two decades.

History
India, Narendra K. Patni first came to the US in 1964 on an MIT fellowship and in the early 1970s, he was appointed the president of Forrester Consulting Group, which advised companies and government agencies on technology issues. While there, he became aware of the benefits of outsourcing during a project involving advance level typesetting. The best way to do it is where the labor is cheaper, he said and so was born the first outsourcing companies in India. The Beginning The name of the company was initially Data Conversion Inc in 1972. Narendra Patni and his wife Poonam started this experiment in their house, naming one room as US and the other as India. In one room, they wrote instructions to convert data from paper documents to computers. In another room, a group of MIT students typed out the data into a Flexowriter machine that spat out papered out court documents for LexisNexis, movie summaries for American Film Institute and catalogs for American Mathematical Society. Each week boxes of paper tapes were flown to US for processing through readers and conversion into magnetic tapes that was fed into computers. This was Patni's first step into the realm of software services. By late 1970s the company had garnered enough foreign exchange to take the next step forward. Patni came up with the idea of importing multi user server systems and selling computer time. Eventually, an agreement with US based computer manufacturer Data General to supply computer systems through satellite links helped create Patni Computer Systems in 1978. The company was incorporated in India on 10 February 1978 under the Indian Companies Act, 1956. Around the same time Naren Patni had the idea of software development opportunities from Data General to be delivered from India. And they got the projects! Mr. Patnis dream of exploiting India as a high quality and low cost delivery base became a reality when in 1986 Indias first ODC (Offshore Delivery Centre) for Data General was set up. This was the start as Patni successfully initiated and developed the outsourcing business model which flourished into one

of the largest industries worldwide, connecting the world in ways that was unimaginable some time ago. During the early 1990s the company was too focused on its hardware market and couldnt take advantage of the growth of software opportunities. It was then that Naren Patni roped in consulting group McKinsey to recommend how to scale up their business. The firm recommended massive restructuring of the organization into strategic business units based on market segments and technological expertise supported by horizontal groups. From an 80 crore company in 1996, the companys revenues have grown to 656 million USD till 2009.

Narendra Patni Global Expansion The companys global expansion began when they set up an office in London UK in 1993. It was followed by a surge of expansion in different parts of United States as well as in various European and Asian countries including Japan. Along with offices pan-India, now Patni has 28 offices worldwide. This expansion was not just geographical. Across the years, Patni has added various services to their offerings as well as practices like engineering services, enterprise application solutions, ebusiness solutions, BPO services and so on. They have acquired companies like The Reference Inc, Cymbal Corporation, ZAiQ Technologies, Taratec, Logan Orviss and very recently CHCS. Patni collected various accreditations like ISO 9001:2000, CMM Level 5 and P-CMM Level 3 certifications and integrated Six Sigma techniques.

IPO Soon after implementing McKinseys restructuring, a model that would be adopted later by most competitors, Naren Patni took a very important decision. He decided to invite Merrill Lynch to act as advisor for their Initial Public Offering (IPO). According to their analysis, Patni had all the trappings to attract private investments critical mass, proven track record and stable customer base. By a combination of coincidences General Atlantic, a global leader in private equity investment, was looking for a suitable Indian software player to invest in and invested US $ 100 million in September 2002. Patni underwent an IPO on February 2004 which was oversubscribed 22 times. They are currently listed on Bombay Stock Exchange (BSE), National Stock Exchange (NSE), India and New York Stock Exchange, US. In the same year, Patni acquired Fremont, California based Cymbal Corporation for a sum of US$78 mn. Cymbal's acquisition allowed Patni to enter $60 billion IT services market in the telecom vertical which was previously not available to Patni on their business landscape.[9] This acquisition also allowed Patni to spread its Non-GE Business, and added a development center in Hyderabad, India. In December 2005, Patni listed its ADRs on the New York Stock Exchange (NYSE) under the ticker PTI. The board of directors includes chairman Narendra Patni Patni Knowledge Park

Patni Knowledge Park, Airoli, Navi Mumbai Patnis first foray into a knowledge park was when Patni Knowledge Park opened its gates in September 2006 in Airoli near Mumbai, India. In 2008, Patni launched its first Green IT-BPO knowledge centre in Noida, India. The state-ofthe-art environment-friendly facility complements the organizations green initiatives around efficient utilization and conservation of energy, water and natural resources. The centre is spread over 5 acres (20,000 m2) and has a seating capacity of over 3500. Later the same year, it was awarded the LEED Platinum (Leadership in Energy and Environmental Design) rating for its Green IT-BPO Centre inaugurated earlier this year in Noida. This makes the Patni Knowledge Centre the second largest Platinum rated building in the world, and the largest Platinum rated building outside the United States.

The Patni Logo

The Patni logo is a circle formed by individual spiraling shapes.The circle, a symbol of completeness, represents the holistic solutions that Patni creates. Just as the individual spirals come together to form a circle, so the diverse elements of Patni's global resources work together to deliver a complete solution to clients. The individual spirals are moving together in synchronicity - moving forward to achieve a common goal. The entire image is skewed forward to communicate a multi-dimensional, dynamic perspective. The name Patni is presented in lowercase letters to appear more approachable, contemporary and innovative. Using the full name Patni gives the company a stronger sense of identity while moving away from generic initials that have become indistinguishable from the rest of the industry. The red color in the icon represents the progressive, energetic part of the company while the grey of the Patni word represents its dependability and trustworthiness

Company Vision
To be a trusted partner, powered by passionate minds, creating innovative options to excel.

Company Value
Passion Zeal to exceed expectations by challenging the status quo. Honesty & Integrity Driving all actions based on openness, trust and ethical conduct. Operational Excellence Striving for excellence with an operating discipline, benchmarked with the best globally. Innovation Creating innovative solutions for success. Customer Centricity Ensuring customer delight. Always

Service Offerings
o o o o o o o o o Application Development Verification and Validation Process Consulting BI and DW Business Process Management Web Technology Solutions Open Source Software Services RFID Embedded Systems o Application Management o IT Consulting o Enterprise Application Solutions o Enterprise Integration o IT Governance o Enterprise Mobility Solutions o CIS and BPO o Infrastructure Management o Engineering Services

INDUSTRY THEY SERVE Insurance & Healthcare

Balance Sheet of Patni Computer Systems in Rs. Cr.

Dec '05
12 mths Sources Of Funds

Dec '06
12 mths

Dec '07
12 mths

Dec '08
12 mths

Dec '09
12 mths

Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities

27.56 27.56 0.00 0.00 2,013.57 0.95 2,042.08 3.18 0.00 3.18 2,045.26 Dec '05 12 mths

27.66 27.66 0.27 0.00 2,180.18 0.94 2,209.05 3.06 0.00 3.06 2,212.11 Dec '06 12 mths

27.80 27.80 0.18 0.00 2,530.07 0.14 2,558.19 2.38 0.00 2.38 2,560.57 Dec '07 12 mths

25.62 25.62 0.03 0.00 2,495.42 0.13 2,521.20 1.75 0.00 1.75 2,522.95 Dec '08 12 mths

25.83 25.83 11.88 0.00 3,165.92 0.12 3,203.75 0.94 0.00 0.94 3,204.69 Dec '09 12 mths

Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs)

477.28 209.26 268.02 120.93 804.97 0.00 416.62 570.62 987.24 181.67 0.00 1,168.91 0.00 111.82 205.76 317.58 851.33 0.00 2,045.25 116.08 148.13

614.30 279.35 334.95 211.28 1,387.02 0.00 538.63 36.79 575.42 61.04 0.00 636.46 0.00 225.78 131.82 357.60 278.86 0.00 2,212.11 141.32 159.66

843.99 348.93 495.06 217.41 1,583.17 0.00 489.50 50.32 539.82 135.18 0.00 675.00 0.00 252.58 157.49 410.07 264.93 0.00 2,560.57 131.61 184.01

945.97 419.25 526.72 247.07 1,652.19 0.00 559.38 96.87 656.25 175.35 5.00 836.60 0.00 534.98 204.67 739.65 96.95 0.00 2,522.93 492.51 196.80

1,084.56 477.36 607.20 133.66 2,267.40 0.00 339.58 104.00 443.58 239.05 0.05 682.68 0.00 281.45 204.78 486.23 196.45 0.00 3,204.71 506.81 247.18

PROJECT PROFILE
The project was primarily aimed at studying the marketing of services with special reference to Information Technology Industry. Patni Computer System was the company where I have done this research to find out the strategies they are adopting to promote there services to there targeted customers. And to find out the strategies adopted by different firm for marketing there services. On the project I did survey in different sites of Patni Lucknow on the basis of questionnaire I had prepared. The project was all survey based and the result which came out is all based on the factual information provided by the customers which had filled my questionnaire form. After collecting information I analyzed all data under the process of research methodology and then drawn a result from that. This study will help in know, what kind of strategy Patni and its competitors is making to compete its competitors. As service is intangible and perishable so it is difficult to promote it but with several marketing strategies it could be done . Does this research will focus on that strategies which are adopted by IT Industry to be specific in the cut throat competition.

OBSERVATIONS AND FINDINGS

Life & Annuities | Property & Casualty / General Insurance | Healthcare Banking & Financial Services Asset Management & Securities | Banking | Benefits Administration Manufacturing Consumer Products | Hi-Tech Engineering | Industrial | Products Food & Beverages | Paper & Pulp | Pharmaceuticals Telecom OSS/BSS across | Wireframe | Cable | NextGen Services | VoIP | 3G | MVNO Product Engineering Services Automation & Control | Automotive | Consumer Electronics | Medical Devices | Mobile & Wireless | Office Automation | Storage, Networks & Computing ISVs Core Software Product Engineering | Product Lifecycle Management Sustenance | Engineering & Maintenance Support | Implementation Support Services Life Sciences Regulatory Compliance/Quality Management | Enterprise IT | Drug Safety & Clinical Solutions | LIMS & Lab Informatics Retail B2C | Merchandising Systems | Legacy Maintenance | IT Infrastructure Management | Web Enabling & Legacy Integration | CRM & DWH | B2B | RFID | Legacy Enhancements | Kiosks & Handhelds | Financial & ERP Systems | Supply Chain & Warehouse Logistics & Transportation Goods (Freight) Transportation | Passenger Transportation | Logistics Energy & Utilities Field Services | Customer Information System/CRM | Metering Solutions | Work Force Management | Outage Management | Billing & Tariff Management | Data Acquisition | Usage Measurement | Account Management | Metering System Solutions Media & Entertainment